Three months after Turing Pharmaceuticals entered the spotlight by buying the rights to a generic drug used to save lives and dramatically increased the price from $13.50 to $750, the company’s CEO has been arrested in a securities-fraud investigation. However, the charges are related to another company the man once led.
Bloomberg reports that Martin Shkreli was arrested Thursday morning in connection with a securities-fraud investigation into his actions as CEO for biotech company Retrophin.
The 32-year-old founded Retrophin in 2011 and served as CEO until he was ousted from the company in 2014.
Retrophin replaced Shkreli because of “serious concerns about his conduct,” the company said in a statement.
Shkreli has reportedly been charged with illegally taking stock from Retrophin, a company he started in 2011, and using it to pay off debts from unrelated business dealings, Bloomberg reports.
This isn’t Shkreli’s first issue stemming from his tenure with Retrophin. From September 2014 to December 2014, he was named in four lawsuits filed by the company’s investors.
Bloomberg reports that these cases accused him of having profited through insider trading and making “materially false and misleading statements” that “artificially inflated” the company’s stock price.
Two of the suit remain ongoing, while one was dismissed and another is in private mediation.
In a related case, Shkreli is being sued for $65 million in damages by Retrophin. The suit accuses Shkreli of engaging in multiple “self-dealing schemes” while he was at the company, Bloomberg reports.
U.S. Attorney Robert Capers is expected to talk more about the case during a press conference on Thursday.
Shkreli gained national attention back in September when the company he leads, Turing, bought the rights to Daraprim — an anti-parasitic used to treat malaria and toxoplasmosis. Shortly afterwards, the per-pill price skyrocketed from $13.50 to more than $750.
Turing defended the price hike by saying it was going to use the money to invest in research for a better drug to treat the same diseases. But some physicians countered that Daraprim has been used for 60 years and there is no urgent need for a replacement.
A Senate committee announced it had opened an investigation into the pricing increase, sending letters requesting documents from four pharmaceutical companies regarding their sky-high price increases on certain prescription drugs.
Shkreli, CEO Reviled for Drug Price Gouging, Arrested on Securities Fraud Charges [Bloomber]
by Ashlee Kieler via Consumerist
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