December 4, 2015
By Alex Keown, BioSpace.com Breaking News Staff
SOUTH SAN FRANCISCO – Martin Shkreli’s KaloBios Pharmaceuticals has had a busy week with the naming of new executives and the acquisition of a benznidazole program for the treatment of Chagas Disease from Savant Neglected Diseases, LLC, for $2 million in upfront payments.
KaloBios shot up more than 8 percent after the acquisition was announced. Since Shkreli took over KaloBios, company stock has soared from $2.01 per share less than two weeks ago. Currently the stock is trading at $31.78 per share, down from a high of $40.50 on Nov. 27.
KaloBios said it intends to file for Orphan Drug Designation and Fast Track Designation for benznidazole in Chagas Disease. Currently, there are only two treatments for Chagas disease available—niffurtimox and benznidazole.
“We are pleased to execute this agreement with Savant as it is consistent with our mission to improve the lives of patients by developing therapies for neglected diseases of high unmet medical need. An estimated 300,000 patients in the United States are afflicted with Chagas Disease and this number is growing at an alarming rate,” Shkreli said in a statement. “Benznidazole is an extremely important medicine that is currently unavailable in the United States or Europe. KaloBios will work to bring this vital therapy to help patients avoid progression to Chagas’ cardiomyopathy by offering early disease intervention.”
Chagas disease is a parasitic disease transmitted to animals and people by insect bites. Chagas disease is common in South America, Central America and Mexico, but sometimes appears in the United States, according to the Mayo Clinic. Symptoms of Chagas disease include fever, fatigue, rash, aches, swelling of the eyelids, headache, nausea or diarrhea and an enlargement of the liver or spleen.
Under terms of the acquisition, KaloBios will pay Savant $2 million in upfront payments, plus regulatory milestones and a royalty based on product sales. The transaction is expected to close in the coming weeks. The company was able to make the acquisition of the compound after receiving $8.2 million in a financing deal, also announced Thursday. Less than a month ago KaloBios was on the verge of shutting its doors until Shkreli, a former hedge fund manager, acquired 70 percent of KaloBios stock and was named the new chairman and chief executive officer of KaloBios.
Since the compound has yet to be approved for the treatment of Chagas disease, Shkreli and KaloBios are unlikely to face the same backlash over drug pricing like he did when his other company acquired Daraprim, a treatment for another parasitic disease, toxoplasmosis. After acquiring the drug for $55 million in August, Turing increased the price of the drug 5,000 percent—an increase he now says was too low.
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). Following the acquisition, Shkreli has tweeted about lenzilumab multiple times, most recently a reading list of the drug’s efficacy.
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.
