Legal Battle Over Between 'Pharma Bro' Martin Shkreli and Retrophin
JStone / Shutterstock
Two weeks after filing a lawsuit against his former company from prison, Martin Shkreli has reached a settlement with Retrophin.
A Retrophin spokesperson told CNBC that the parties came to a quick agreement and resolved all outstanding disputes. Shkreli and Retrophin have had an ongoing legal battle since the company dismissed him as chief executive officer several years ago. Terms of the settlement have not been disclosed but CNBC said the agreement between the two parties covers Shkreli’s claim against the company, as well as a 2016 lawsuit that Retrophin filed against the pharma bro over an alleged breach of fiduciary responsibility during his tenure as CEO.
“Retrophin and Martin Shkreli have reached a settlement resolving all outstanding disputes between them,” Retrophin said in its statement to CNBC. “We are pleased with this outcome and remain focused on delivering life-changing therapies to people living with rare diseases. Additional information about the settlement will be provided in Retrophin’s forthcoming quarterly filing.”
When Shkreli filed his lawsuit two weeks ago, he accused several of the company’s leadership team members of “using fraud” to oust him as CEO. Shkreli claimed that Retrophin’s chairman of the board of directors, Gary Lyons, former company CEO Stephen Aselage, who currently is a director, and Retrophin’s general counsel Margaret Valeur-Jensen used fraud to remove him as head of the company in 2014, CNBC said. Shkreli sought more than $30 million in damages. That lawsuit had been “voluntarily dismissed, with prejudice,” CNBC reported, which means that Shkreli cannot file a similar lawsuit in the future against the defendants.
In 2015, Retrophin sued Shkreli for $65 million over his use of company funds while he served as CEO. In its lawsuit, Retrophin said Shkreli used company funds for personal use, enriched himself through false consulting contracts and referred to Shkreli as “the paradigm faithless servant” who “is not entitled to compensation or post-separation benefits.” Shkreli came under investigation by 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. The company alleged Shkreli used corporate funds to pay off personal legal debts and was hiding company legal matters from public disclosure.
Shkreli is currently serving seven years in prison related to those allegations, as well as issues related to hedge funds he managed prior to his tenure at Retrophin. In 2017, Shkreli was found guilty on two charges of securities fraud and one charge of conspiracy to commit conspiracy fraud.
Shkreli rose to levels of infamy not for his financial issues but due to the 5,000% percent price increase on a drug acquired by another pharma company he founded following his ouster from Retrophin. He had been serving his sentence at Fort Dix in New Jersey but was recently transferred to a federal prison in Pennsylvania.
While in prison, Shkreli continued to provide his insights on the pharmaceutical industry through letters to a friend on the outside who posted them on a website. Also while in prison, Shkreli reportedly used a contraband cell phone to call the shots at Turing Pharmaceuticals, the company that he founded following Retrophin that has since been redubbed Phoenixus AG. According to reports, Shkreli used the phone to terminate the CEO who had been running the company in his absence.
Newsletter Sign Up
Sign up to get the latest life sciences news and updates delivered straight to your inbox.