Bid to Wrest Phoenixus Away from Jailed ‘Pharma Bro’ Fails
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Former Shkreli confidant Kevin Mulleady and hedge fund manager Jason Aryeh attempted to back a slate of candidates for the Phoenixus Board of Directors during the Swiss biotech’s annual shareholder meeting. However, that appears to have failed as shareholders overwhelmingly supported the current board, re-electing four of the five current members. Averill Powers, the Phoenixus chief executive officer and chairman of the board, was not re-elected.
In an interview with Endpoints, Mulleady, who formerly helmed Vyera but was forced out by Shkreli supporters, expressed his disappointment at the vote, which gave the current board overwhelming support. Lamenting Shkreli’s negative reputation on the pharmaceutical industry, Mulleady said he would continue efforts to reduce Shkreli's influence on the company despite currently serving a federal prison sentence for wire fraud.
Vyera, formerly known as Turing Pharmaceuticals, was founded by Shkreli and Mulleady in 2015 after Shkreli was ousted from his role as chief executive officer at Retrophin. Turing quickly gained infamy after acquiring the decades-old toxoplasmosis drug Daraprim and raising the price by 5,000%.
When Turing acquired Daraprim, the cost of a single pill was about $13.50. Turing increased the price to $750 per tablet, which drastically raises the cost of treatment for patients. Shkreli defended the price increase of the drug and at one point lamented not raising the price even higher.
Despite his incarceration following a conviction for investment fraud, Shkreli was able to vote in the election as a shareholder. Shkreli owns approximately 44% of Phoenixus. He has maintained those shares despite judicial orders to forfeit millions of dollars following his guilty verdict.
Throughout his time behind bars, Shkreli has been accused of calling the shots at Phoenixus and Vyera through the use of an illegal cell phone, as well as intermediaries who have worked with him for years.
Prior to this week’s vote, the current Phoenixus board of directors issued a letter to shareholders last month urging them to support the current board. In the letter, the board insisted that the jailed Shkreli was not directing the company from behind bars. The board said it was making decisions “independently from instructions from Martin Shkreli.”
In the board’s letter, the long relationship between the two men was highlighted. Mulleady was once a close confidant of Shkreli’s, and the two are listed as co-defendants in a federal anti-trust lawsuit. In that complaint, the Federal Trade Commission accused Shkreli and Mulleady of conspiring to block generic competition to Daraprim.
According to the FTC complaint, Turing “illegally restrained trade through restrictive distribution agreements that ensured that would-be generic entrants could not buy samples of Daraprim” that could be used in the process of trying to develop a generic. Turing also prevented competitors from accessing a critical ingredient used to manufacture Daraprim. A generic version to Daraprim was approved by the U.S. Food and Drug Administration in 2020.