More Turing Executives Take Top Spots at Floundering KaloBios

December 3, 2015
By Alex Keown, Breaking News Staff

SOUTH SAN FRANCISCO—Shortly after placing Turing Pharmaceuticals Chief Executive Officer Martin Shkreli at the helm of KaloBios Pharmaceuticals, Inc. , the company tapped three new executives also associated with Turing to right the company that was on the verge of shutting down less than a month ago.

Patrick Crutcher, an executive at Turing, has been appointed head of business development for KaloBios. Crutcher followed Shkreli from his former position as head of Retrophin to Turing and has now taken a key position with the California-based company. Before his stint with Turing and KaloBios, Crutcher served as a healthcare consultant focused on private and publicly traded biotechnology companies.

KaloBios tapped Chris Thorn as its interim chief financial officer. Thorn is also another close confidant of Shkreli. He currently also serves as controller of Turing Pharmaceuticals. Previously Thorn, a certified public accountant, served as controller of Kamdon Corp and audit manager with KPMG LLP.

Another Turing executive, Edward Painter has assumed the responsibilities of head of communications for KaloBios. Painter also serves as head of communications and investor relations at Turing.

In a statement Shkreli said the company is moving quickly to “build a very high quality team focused on optimizing the growth opportunities at KaloBios Pharmaceuticals.”

In November, Shkreli, who has faced scrutiny over Turing’s 5,000 percent price increase of a 65-year-old drug, acquired 70 percent of KaloBios stock after the company announced it would shut down its operations and liquidate its assets. Shortly after taking over majority shares, Shkreli was named CEO of KaloBios. Shkreli said he believes in the company’s lead product, lenzilumab.

Lenzilumab is a monoclonal antibody that neutralizes soluble granulocyte-macrophage colony stimulating factor (GM-CSF), a central actor in leukocyte differentiation, autoimmunity and inflammation. The drug has shown promise in treating chronic monomyelocytic leukemia (CMML). Company officials believe lenzilumab may also have clinical utility in other rare autoimmune and inflammatory disorders. KaloBios said it plans to enroll a 31-patient Phase I/II clinical trial of lenzilumab by the end of 2015 and expect interim results in the first half of 2016.

Following the acquisition, Shkreli has tweeted about lenzilumab multiple times, most recently a reading list of the drug’s efficacy.

Since Shkreli took over KaloBios, company has soared from $2.01 per share less than two weeks ago. Currently the stock is trading at $29.10 per share, down from a high of $40.50 on Nov. 27.

KaloBios was on the verge of shutting down and had laid off a large number of its employees. On Twitter, Shkreli said he was happy to rescue KaloBios from having to discontinue the blood cancer drug lenzilumab. He also said he wanted to see about hiring back some of the employees who had been terminated since KaloBios announced its plans to shutter.

KaloBios and Turing will remain independent of each other, the company said in a statement.

KaloBios was founded in 2000 and over the course of the first decade had several equity rounds and deals with Novartis and Sanofi . In July 2014, Sanofi walked away from their deal. Citing low single digit royalties on net sales of KB001-A, subject to a $40 million cap on the aggregate royalties. Sanofi was also entitled up to 10 percent of certain sub-license payments or other milestone payments.

While Shkreli may be receiving praise for saving KaloBios, its employees and potential research, he is still being lambasted for Turing’s decision to acquire the toxoplasmosis drug Daraprim for $55 million in August and promptly increase the price by 5,000 percent. Recently U.S. Rep. Elijah Cummings, a critic of high drug prices, renewed his call for Shkreli to lower prices of the medication. Shkreli has insisted on Twitter that most bottles of Daraprim are sold for “$1 or less.” He also tweeted that no patient requiring the drug would be denied access.