More Trouble for Retrophin Founder
Published: Jan 09, 2015
January 8, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Martin Shkreli, founder and former chief executive officer of Retrophin Inc. , is being investigated by U.S. prosecutors for possible securities violations, claimed Bloomberg News Thursday. Shkreli is also, according to the same source, under investigation by the U.S. Securities and Exchange Commission (SEC) for similar reasons related to distribution of stock without letting shareholders know.
In September 2014 Shkreli was replaced by Retrophin’s board over poor management skills and some bad PR due to his unprofessional use of Twitter. He also sold about $4.5 million in company stock at an average price of $15 per share without informing shareholders.
Shkreli has also been accused by Citizens for Responsibility and Ethics in 2012 of spreading “unfounded and inaccurate rumors about drugs owned by companies he was shorting.” The group requested an investigation by U.S. Attorney Preet Bharara in Manhattan.
Retrophin currently has three products, Thiola, for the prevention of kidney stone formation, Chenodal, for the treatment of gall stones, and Vecamyl, for the treatment of moderately severe to severe essential hypertension and uncomplicated cases of malignant hypertension. It also has several products in various preclinical and Phase I, II and III trials.
In an August analysis, Adam Feuerstein wrote, “All the drugs bought or licensed by Retrophin are under-utilized and under-priced, which the company believes can be reversed by repurposing them to treat rare diseases at much higher prices. To grow Retrophin quickly, Shkreli is borrowing from the commercial roll-up and pricing strategies employed successfully — some would say controversially — by specialty pharmaceutical companies Valeant Pharmaceuticals and Questcor Pharmaceuticals .”
Prior to being chief executive of Retrophin, Shkreli was chief investment officer of MSMB Capital Management, which focuses on healthcare investments. Since October 2014 he had been chief executive officer of Turing Pharmaceuticals, a private drug company focused on orphan, psychiatry and infectious diseases.
On Twitter yesterday Shkreli claimed the reports were “misleading and confused on an old situation that is no longer relevant.” Spokespeople for the SEC, Retrophin and for U.S. Attorney Loretta Lynch in Brooklyn have declined to comment.
In another tweet from Jan. 7, Shkreli wrote, “bberg (Bloomberg) is rehashing my 2012 ‘call for investigation’. Why I am so interesting to the media I will never understand.”
“Martin impressed me with his ambition and his knowledge of drug development, which is why I am invested in the company,” said an anonymous Retrophin shareholder in an August article. “But then you see him selling [Retrophin] stock, missing deadlines and now this unprofessional Twitter stuff and it gets frustrating. You start to question if he’s mature enough to run the company.”