KalosBios Pharmaceuticals, Inc. (NASDAQ: KBIO) , the pharmaceutical company taken over by Martin Shkreli last month, is seeking bankruptcy protection less than two weeks after his arrest for securities fraud.
According to a statement on the website of the U.S. Bankruptcy Court, KaloBios filed for Chapter 11 reorganization on Tuesday. The South San Francisco, California-based company plans to use the bankruptcy to buy some time to re-structure their company.
According to the court paper, the petition lists $8.37 million in assets and $1.94 million in debt. KaloBios’s largest unsecured creditors include the University of Miami and Ernst & Young LLP. The aim of the restructuring is to allow company to focus limited resources on the development of the experimental drug.
The company has just announced that NASDAQ was planning to delist the stock on Wednesday. What’s more, KaloBios has failed to file a quarterly financial report. Shkreli was fired by KaloBios after the arrest for securities fraud and has denied any of the charges.
Turing Pharmaceuticals Inc., the other company which Shkreli is in charge of, is cutting jobs and seeking a new CEO after Shkreli resigned the position because of his arrest.
Turing, under Shkreli’s management, acquired the rights to a treatment for a rare parasitic infection that mainly strikes pregnant women and raised the price from $13.50 to $750 per pill. The huge price increase has drawn mainstream attention and criticism.
Shkreli took over KaloBios last month, when shares of the company were trading at less than $1. After the announcement that he had taken a controlling stake and named himself chief executive officer, they surged to a closing high of $39.50 on Nov 23.