Former Retrophin CEO Nabs $90 Million for Startup Turing Pharma
Published: Aug 10, 2015
August 10, 2015
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Martin Shkreli’s Turing Pharmaceuticals AG netted $90 million in Series A financing for use in advancing the company’s pipeline as well as possible M&A activity, the company announced this morning.
New York-based Turing Pharmaceuticals is not sitting on the newly acquired funds. Today the company also announced that Turing acquired the U.S. rights to IMPAX Laboratories, Inc. ’ Daraprim for $55 million. Daraprim is an antiparasitic used in the treatment of toxoplasmosis when combined with a sulfonamide.
The Centers for Disease Control and Prevention (CDC) has classified toxoplasmosis as one of the five neglected parasitic infections in the United States. It is the second leading cause of death from foodborne illness in the country. The CDC estimates that more than 60 million people in the U.S. carry the toxoplasma parasite. Shkreli said in addition to providing treatments for toxoplasmosis, Turing Pharmaceuticals also plans to launch “an educational effort to help raise awareness and improve diagnosis for patients with toxoplasmosis.”
Daraprim is also used to treat acute malaria and for the treatment of chemoprophylaxis of malaria due to susceptible strains of plasmodia, the company said this morning.
Shkreli said Turing’s new funds will allow the company to develop breakthrough treatments and maximize shareholder value. This round of financing is the privately-held company’s first since it was formed in February, Shkreli said in a statement.
“We are very happy with the institutional interest in our first capital raise. It's a great reflection on our business model and the collective track record of our leadership team developing breakthrough treatments for serious diseases,” Shkreli said
Shkreli is the former chief executive officer of Retrophin , who was ousted by the board of directors over poor management skills and bad public relations from what was called unprofessional use of a social media account. Shkreli also sold about $4.5 million in company stock at an average price of $15 per share without informing shareholders, the company said.
Turing launched in February with three products in its pipeline that were acquired from Retrophin, Shkreli’s former company. The medications in Turing’s pipeline include an intranasal formulation of ketamine, a compound used to treat severe depression but which currently requires IV-infusion therapy. Turing is developing this medication for psychiatric use. Additionally the company acquired Syntocinon (oxytocin nasal solution) and Vecamyl (mecamylamine HCl tablets). Vecamyl will provide Turing with its first FDA-approved product and revenue stream. The company also announced it had acquired two early-stage compounds to be developed for various orphan drug indications.
In January, Shkreli came under investigation y U.S. prosecutors for possible securities violations and from the U.S. Securities and Exchange Commission for the distribution of stock without letting shareholders know.
An internal probe conducted by Retrophin and filed with the Securities and Exchange Commission on Feb. 19 alleged Shkreli used corporate funds to pay off personal legal debts and was hiding company legal matters from public disclosure. Additionally the probe said Shkreli used corporate funds to resolve legal matters with MSMB Capital Management, a hedge fund he managed, as well as disguised legal settlements as consulting agreements with Retrophin, both of which cost the company million of dollars and a transfer of thousands of shares of stock.
Shkreli has denied any wrongdoing while at the head of Retrophin. He said the accusations noted in the Retrophin internal investigation are “false, untrue at best and defamatory at worst,” he posted on the website Investorshub.
“Every transaction I've ever made at Retrophin was done with outside counsel's blessing (I have the bills to prove it), board approval and made good corporate sense. I took Retrophin from an idea to a $500 million public company in 3 years—and I had a lot of help along the way," he said in his post.