Wednesday, June 29, 2022

Martin Shkreli’s old pharma company faces shareholder battle

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“Pharma Bro” Martin Shkreli just got out of prison, but the battle over his scandal-scarred company is still raging.

Last June, a group of activist investors seeking to wrest control of Shkreli’s pharmaceutical firm Turing failed – with the 39-year-old fraudster voting his shares from prison.

Since then, Turing has continued to bleed cash and now appears to be on the verge of going under, according to activist investors Jason Aryeh and Ron Tilles, a former Turing chairman and interim CEO, who together are looking to shake up the company’s board at a Friday shareholder meeting.

“They are left with just $ 23 million in cash, down from 50 million last quarter – no idea what they’re doing,” Aryeh told The Post. “They burned through 27 million – where did it go?”

Nevertheless, Aryeh and Tilles admit their proxy battle is still far from a sure bet. Turing’s parent company Phoenixus, now renamed Vyera, has told activist investors that Shkreli can no longer vote his shares as he’s been banned from the industry by the feds. But current directors could still issue themselves new shares and win the battle, according to Aryeh.

Shkreli was released early from prison.

Shkreli previously held 44% of the company. The activist investors say they aren’t sure what percentage of shares the board members have now. Aryeh adds that the board appears to still be packed with Shkreli’s cronies who may do whatever he wants.

“It all comes down to a handful of institutional shareholders,” Aryeh told The Post. “They need to vote out Martin’s cronies, and thus end his embarrassing and massively overstated influence on the perception of the life-saving pharmaceutical industry.”

Officials at Vyera didn’t immediately respond to a request for comment.

Shkreli rose to notoriety after he hiked the price of life-saving AIDS treatment Daraprim to $ 750 a pill from $ 17.50 after obtaining the exclusive rights to it in 2015.

In December, the Federal Trade Commission accused Shkreli in court of using anticompetitive tactics to drive up the price of Daraprim. The feds won, and as a result Shkreli has been banned from the pharmaceutical industry in the US.

Martin Shkreli
Martin Shkreli was sentences to seven years in prison.

However, the parent company is based in Switzerland – and thus falls under Swiss rules and isn’t subject to the FTC ban.

“The plan is to remove Martin from the company, right the price of Daraprim to pre-Shkreli levels, and do what’s right first with patients, physicians then shareholders,” Aryeh said.

Shkreli was released early from prison after being sentenced to a seven-year sentence through 2023 for securities fraud he committed while running two hedge funds.

After getting out of jail in May, Shrkeli has been moved to a so-called halfway house where he is expected to be released on Sept. 14.

Upon his release, Shkreli joked on Facebook, that “Getting out of real prison is easier than getting out of Twitter prison.” Shkreli was banned from Twitter in 2017 for “targeted harassment” of a journalist.

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