Martin Shkreli fired from KaloBios, says 'pharma bro' persona led to federal probe

Image via Twitter.

Former Turing Pharmaceutical CEO Martin Shkreli, who was arrested last week on charges of securities fraud and who has been reviled for hiking the price of a life-saving drug by 5,000 percent, has been terminated as CEO of KaloBios, the company announced Monday.

Shkreli owned a majority share of KaloBios after buying its outstanding stock as the company was reportedly about to fold. Shares soared more than 600 percent in November, but after Shkreli's arrest Thursday, KaloBios shares were down by 50 percent before trading was halted.

Shkreli has also resigned from the company's board of directors, KaloBios said.

Turing announced Friday that its founder had resigned.

[Also: Martin Shkreli arrested for securities fraud]

As Turing's chief executive, Shkreli gained infamy and spurred a Congressional investigation into the rising price of prescription drugs, after jacking up the price of the drug Daraprim from $13.50 a pill to $750. Daraprim, on the market for over 50 years, treats toxoplasmosis, a parasitic disease that can be fatal to AIDS patients, pregnant women and others with a weakened immune system.

Shkreli stood by the move as necessary to shore up more money for drug research. He later dropped the price in half for hospitals only.

In his first interview after being arrested, Shkreli told The Wall Street Journal that it was his price increase for Daraprim and his over-the-top persona that led to the charges against him.

"'Trying to find anything we could to stop him,' was the attitude of the government," Shkreli told the WSJ.

[Also: Senate committee targets Martin Shkreli, big pharma, over sky-high drug prices]

He decried the allegation made by Brooklyn U.S. Attorney Robert Capers that he ran his businesses like a Ponzi scheme, raiding funds from one to pay back investors of two other companies he ran. 

Shkreli also said his Twitter account, e-mail and cell phone accounts have been hacked.After a December 17 posting that says, "Glad to be home, thanks for the support, " many of the tweets posted by "Martin the God" are profane. One simply states, "I am now a god." Another refers to Shkreli giving away a Wu-Tang Clan album he reportedly purchased for $2 million.

Turing on Friday cautioned healthcare providers from using alternatives to Daraprim. Other pharma companies are offering an alternative medicine for the treatment of toxoplasmosis, at lower prices.

"Turing assures healthcare providers and patients that Daraprim remains available and is unaffected by these events," Turing said in a release regarding the change in leadership. "Additionally, Turing has started to expand its distribution partnerships in the outpatient setting to ensure optimal patient access."

Ron Tilles, chairman of the Board of Directors for Turing, has been named CEO of the privately-held biopharmaceutical company.

[Also: Daraprim competitor to market $1 pill after Turing chief Martin Shkreli hikes price]

"We wish to thank Martin for helping us build Turing Pharmaceuticals into the dynamic research focused company it is today, and wish him the best in his future endeavors," Tilles said in a release.

Shkreli, 32, faces up to 20 years in prison if convicted on charges of security fraud, security fraud conspiracy and wire fraud conspiracy. He was arrested by the FBI at his Manhattan home Thursday morning, pleaded not guilty, and is free after posting a $5 million bond.

Attorney Evan L. Greebel, 42, was also arrested for his role in the alleged schemes and has pleaded not guilty to wire fraud conspiracy.

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Both men used funds from the company Shkreli founded in 2011, Retrophin, to pay investors of two former hedge funds he managed,  and masked the money as consultant fees for work that was never performed, according to authorities.

Shkreli was Retrophin's president and CEO until September 30, 2014, when he was ousted.

The U.S. Securities and Exchange Commission has been looking into Shkreli since 2012. It became a higher priority in September after Shkreli raised the price of Daraprim, the WSJ earlier reported.

The Securities and Exchange Commission has filed a civil lawsuit against Shkreli. Shkreli told the WSJ that some of his public persona was an act and that he is now refocusing on scaling back some of the behavior.

Often taking to Twitter, the "pharma bro" regularly picked fights with anyone who criticized his business practices. 

Twitter: @SusanJMorse