KaloBios Pharmaceuticals (KBIO) Soars 4,000 Percent in Just Six Days

KaloBios KB004

The stock price of KaloBios Pharmaceuticals Inc (NASDAQ:KBIO, the biopharmaceutical company that previously decided to wind down its operations, surprisingly went up 4,000% over the past six trading days.

Today alone, the shares of KaloBios Pharmaceuticals climbed more than 116.44% to $39.50 per share. The stock rose 75% on Friday, 402% on Thursday, and more than 700% during the extended trading on Wednesday, last week.

The primary reason for the sudden surge on the stock price of KaloBios Pharmaceuticals was Martin Shkreli’s investment in the company.

Shkreli’s move was odd given the fact that the management of KaloBios Pharmaceuticals already announced that its discussions to explore strategic alternatives will unlikely result to a viable deal. The company also decided to discontinue its two current development programs—the KB004 for certain hematologic malignancies (Phase 2) and KB003 for chronic myelomonocytic leukemia (Phase 1).

The shares of the company closed $0.90 per share after the company announcement on November 13. The company’s stock opened as low as $0.44 per share and closed to $1.72 per share on November 16—the date when Shkreli started acquiring shares of KaloBios Pharmaceuticals.

Based on a regulatory filing with the Securities and Exchange Commission (SEC), Shkreli acquired more than 1.21 million Shares of KaloBios Pharmaceuticals for approximately $5.16 million.

KaloBios appoints Shkreli as chairman and CEO

Another reason behind the continued surge in the stock price of KaloBios Pharmaceuticals was the appointment of Shkreli as chairman and CEO of the company.  The investor group led by Shkreli owns 70% of the outstanding shares of the company.

According to the biopharmaceutical company, Shkreli and other investors committed $3 million in equity investment in addition to the $10 million in equity financing facility, subject to shareholders’ approval.

Shkreli believes that KaloBios’ Lenzilumab is “very promising”

In a statement, Shkreli said, “We believe that the KaloBios’ Lenzilumab is a very promising candidate for the treatment of various rare and orphan diseases. This monoclonal antibody neutralizes soluble granulocyte-macrophage colony stimulating factor (GM-CSF), a central actor in leukocyte differentiation, autoimmunity and inflammation. Lenzilumab has particular promise in Chronic Myelomonocytic Leukemia.”

Shkreli attracted media attention and criticisms because of the pricing practices of his other company Turing Pharmaceuticals, which raised the price of Daraprim by 5,000% from $15.50 to $750.  Daraprim is an antibiotic used to trear a deadly parasitic infection called toxoplasmosis.

In a previous interview with ABC News, Shkreli said the management of Turing Pharmaceuticals agreed to lower the price of Daraprim to a point that it is more affordable and allows the company to make a very small profit.