June 2, 2016
By Alex Keown, BioSpace.com Breaking News Staff
BRISBANE, Calif. – The once-left-for-dead KaloBios could emerge from bankruptcy protection this summer and the three investors who stepped in to save the company could see a combined $700,000 in equity payments, the San Francisco Business Times reported this morning.
Citing a regulatory filing, the Times said KaloBios could award one-time equity payments of $300,000 to directors Ronald Barliant and David Moradi, and approximately $100,000 to company chairman and chief executive officer Cameron Durrant. The awards are scheduled to be heard in a U.S. Bankruptcy Court on June 14 and if approved, will be subject to a one-year holding period before they can be sold.
At the end of December, following the indictment of former CEO Martin Shkreli for securities fraud, KaloBios filed for bankruptcy protection in U.S. Bankruptcy Court in Delaware, estimating assets of $8.37 million and debts of $1.94 million. By filing Chapter 11 bankruptcy, KaloBios has time to reorganize its shaky leadership structure, restructure its debt.
In March, Durrant, who has a long history as a pharmaceutical executive, stepped in as the new CEO of KaloBios faced with the monumental task of bringing the company back to sustainability following not only the Shkreli period, but also the company’s near shutting down of operations in late 2015. It was shortly after the company announced it was close to selling off its assets that Shkreli and other investors swooped in and acquired a majority of the stock and infused the company with financing. One thing KaloBios has been able to salvage since Shkreli was terminated after his indictment, was the $2 million acquisition of a benznidazole program for the treatment of Chagas Disease from Savant Neglected Diseases, LLC. The deal was initially struck by Shkreli, but left in doubt after his indictment and termination from his CEO spot at KaloBios. Durrant and his team salvaged the deal and could bring it to market and bring a new revenue driver for the company.
Durrant’s seasoned hand could guide KaloBios back to sustainability. The company has a promising leukemia treatment in its pipeline. Lenzilumab, or KB003, a treatment of chronic monomyelocytic leukemia, is an anti-GM-CSF mAb originally tested for asthma, but was not effective in clinical trials. The company’s IND in CMML, an orphan oncology indication, has been cleared by the FDA.
Since KaloBios was rocked by the scandals of its former CEO, the disgraced pharma entrepreneur Martin Shkreli, the company also shifted its headquarters from South San Francisco to the less costly area of Brisbane, Calif.
