Martin Shkreli

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Martin Shkreli
Born (1983-04-02) April 2, 1983 (age 32)
Brooklyn, New York, United States
Nationality American
Alma mater Baruch College
Occupation Corporate executive, hedge fund manager, entrepreneur
Organization Turing Pharmaceuticals

Martin Shkreli (born April 1, 1983)[1] is an American hedge fund manager and entrepreneur, specializing in healthcare businesses, and is a co-founder of MSMB Capital Management and the founder of Turing Pharmaceuticals AG. He is a co-founder and was the chief executive officer of Retrophin LLC, a biotechnology firm founded in 2011.[2][3] In September 2015, Shkreli was criticized when Turing Pharmaceuticals obtained the manufacturing license for Daraprim, and raised its price by 5,455 percent (from $13.50 to $750 per tablet). After initially defending the price increase, Shkreli said an unspecified lower price would be established. Turing Pharmaceuticals announced on November 24, 2015 "that it would not reduce the list price of that drug after all" but they will offer various patient assistance programs.[4]

Early life[edit]

Shkreli, the son of Albanian and Croatian immigrants, was born in Brooklyn, New York.[1] Shkreli has two sisters and one brother. He grew up in a working-class community in Brooklyn. Shkreli skipped several grades in school and received a degree in business from New York's Baruch College in 2004.[1]

Career[edit]

In 2000, Shkreli was a college intern and then clerk at Jim Cramer's Cramer, Berkowitz, & Co. After four years at Cramer Berkowitz, he held jobs at UBS and Intrepid Capital Management before starting his first hedge fund, Elea Capital Management, in 2006. Shkreli launched MSMB Capital Management (named after the two founding Portfolio Managers, Martin Shkreli and Marek Biestek) in 2009.[5][6] In 2011, Shkreli filed requests with the U.S. Food and Drug Administration (FDA) to reject a new type of cancer diagnostic from the manufacturers Navidea Biopharmaceuticals and an inhalable insulin therapy for diabetes from MannKind Corporation, while publicly short-selling the companies' stocks. Both companies' stock values immediately dropped following Shkreli's interventions, and the companies had difficulty launching the products as a result. The FDA subsequently approved both therapies.[6][7]

Retrophin[edit]

Retrophin Inc. was created in 2011[6] and run from the offices of MSMB Capital as a portfolio company with an emphasis on biotechnology, to create treatments for orphan diseases.[3] In September 2014 Retrophin acquired the rights to Thiola, a drug used to treat the rare disease cystinuria. Shkreli resigned from the company in October 2014 after Retrophin's Board decided to replace him that September[8] with Stephen Aselage.[9] Shkreli then left Retrophin and started Turing Pharmaceuticals. Retrophin filed a $65 million lawsuit against Shkreli in August 2015,[8] claiming he breached his duty of loyalty to the biopharmaceutical company in a long-running dispute over his use of company funds,[10][11] and alleging that he "committed stock-trading irregularities and other violations of securities rules".[12] The lawsuit includes the claim that Shkreli threatened and harassed a former MSMB employee and his family.[12] Shkreli and some of his business associates have been under criminal investigation by the U.S. Attorney for the Eastern District of New York since January 2015 with respect to their Retrophin activities, and Shkreli has invoked his Fifth Amendment right against self-incrimination in order to avoid testifying during civil depositions.[13][14]

Turing Pharmaceuticals[edit]

In February 2015, Shkreli launched Turing Pharmaceuticals with three drugs in development, acquired from Retrophin: an intranasal version of ketamine for depression, an intranasal version of oxytocin, and Vecamyl for hypertension.[15]

As executive chairman of Turing Pharmaceuticals, in August 2015 Shkreli raised the price of Daraprim from $13.50 per pill to $750 per pill—a 5,455% increase[16]—shortly after purchasing the marketing rights to the drug for $55 million from Impax Laboratories.[17] While the pharmaceutical patent for the 1953 drug has long expired, no company in the US is currently manufacturing generic pyrimethamine.[18] The deal between Turing and Impax was made on the condition that Impax first remove the drug from regular wholesalers and pharmacies, making it more difficult for generic drug manufacturers to develop generic copies.[16] In June, two months before the sale to Turing was announced, Impax switched to tightly controlled distribution.[19](subscription required) Since the market for Daraprim is small, most manufacturers won't go through the expensive and time-consuming process of obtaining regulatory approval for manufacture. Turing therefore maintains a closed distribution model for Daraprim, and can set the price extremely high without fear of price competition.[20]

Price hike controversy[edit]

In September 2015, Shkreli was criticized by several health organizations[21] for obtaining manufacturing licenses on old, out-of-patent[22] life-saving medicines including pyrimethamine (brand name Daraprim), which is used to treat patients with toxoplasmosis, malaria, some cancers, and AIDS,[23] and then increasing the price of the drug in the US from $13.50 to $750 per pill, a 5,455% increase.[13][16][24] In an interview with Bloomberg News, Shkreli claimed that despite the price increase patient co-pays would actually be lower, that many patients would get the drug at no cost, that the company has expanded its free drug program, and that it sells half of the drugs for one dollar.[25] Shkreli defended the price hike by saying, "If there was a company that was selling an Aston Martin at the price of a bicycle, and we buy that company and we ask to charge Toyota prices, I don't think that that should be a crime."[26][27]

The price increase[28] has been criticized by Hillary Clinton,[23] the HIV[29] Medicine Association,[30] the Infectious Diseases Society of America,[16] the lobbying group Pharmaceutical Research and Manufacturers of America,[31] Donald Trump,[32] and Bernie Sanders.[33] The record label Collect Records publicly ended its business relationship with Shkreli, who had invested in the company.[34]

A few days later, Shkreli[35][36] announced that he plans to lower the price by an unspecified amount, "in response to the anger that was felt by people".[13][36][37] As of October 8, the price has not been reduced.[38] Following a request by U.S. Senators Bernie Sanders and Elijah Cummings for details of Turing Pharmaceuticals' finances and price-setting practices in September 2015,[39] the company hired four lobbyists from Buchanan, Ingersoll & Rooney with backgrounds in health care legislation and pharmaceutical pricing.[40][41] In addition to the lobbyists, Shkreli hired a crisis public relations firm to help explain the pricing decision.[42]

On October 22, 2015, Imprimis Pharmaceuticals said it would begin selling a very similar, but not identical drug, for $1 per pill.[43]

On November 23, 2015, Turing announced that the company would not reduce the list price of Daraprim, but that they planned instead to negotiate volume discounts for hospitals of up to 50%.[44] Turing said it was not as important to cut the list price as to reduce the cost to hospitals, where most patients get their initial treatment. The company pledged no patient needing Daraprim would ever be denied access.[4]

Some patient advocates and infectious disease doctors, e.g., Tim Horn, project director for AIDS research and the Treatment Action Group, Dr. Carlos del Rio, a professor at Emory University and chairman of the HIV Medicine Association, etc., said these actions were not enough. While most patients are initially treated in the hospital, typically for several days, they then have to take the drug for weeks or months after they leave. [45]

KaloBios Pharmaceuticals[edit]

In November 2015, an investor group led by Shkreli acquired a majority stake in KaloBios Pharmaceuticals, Inc. (NASDAQ: KBIO), a biopharmaceutical company based in South San Francisco, California. Shkreli was named as the new CEO of the company, and also planned to continue in the role of CEO of Turing Pharmaceuticals.[46][47]

Gaming and eSports involvement[edit]

Shkreli is a League of Legends player who goes by the name "Imagine Cerebral" and began expressing interest in purchasing an eSports team in 2014.[48] In May, Enemy eSports announced that they had rejected a $1.2 million offer from Shkreli.[49] Eventually he founded his own team, Odyssey eSports, and aimed to qualify for the 2015 North American League of Legends Challenger Series. The team lost to Cloud9 Tempest in the qualifying tournament and failed to qualify. In August, Odyssey merged with Imagine, with Shkreli becoming Chairman of the team. During the merger the team also acquired the Dota 2 team Leviathan.[50][51]

In November 2015 Shkreli began posting archived live streams on YouTube, showing him playing games such as League of Legends and chess, as well as offering financial advice. Shkreli had previously streamed on the website Twitch but switched to YouTube after his account was banned for unknown reasons.[52][53]

References[edit]

  1. ^ a b c "Who is Martin Shkreli - 'the most hated man in America'?". BBC. September 23, 2015. 
  2. ^ Nussbaum, Alex (Aug 3, 2011). "MSMB Capital Makes Unsolicited $378M Bid For AMAG Pharmaceuticals". Bloomberg. 
  3. ^ a b "Retrophin: About Us". Archived from the original on 2011-12-30. 
  4. ^ a b Pollack, Andrew (24 November 2015). "Turing Refuses to Lower List Price of Toxoplasmosis Drug". New York Times. Retrieved 25 November 2015. 
  5. ^ "Pfizer Board comes under fire". Financial Times. Dec 8, 2010. 
  6. ^ a b c Barrett, Paul (April 17, 2014). "Retrophin's Martin Shkreli, the Biotech Short Seller Who Went Long ("Once a Notorious Short Seller, Martin Shkreli Now Sees a Future in Biotech")". Bloomberg Business (Bloomberg.Com). Retrieved September 22, 2015. 
  7. ^ "Biotech exec Martin Shkreli has history of tough tactics". Stat (Boston Globe). September 26, 2015. Retrieved September 28, 2015. (registration required (help)). 
  8. ^ a b United States District Court for the Southern District of New York (August 17, 2015). "EX-99.1, Retrophin, Inc. v. Martin Shkreli". SEC.gov (EDGAR). United States Securities and Exchange Commission. Retrieved September 22, 2015. 
  9. ^ "Stephen J. Aselage bio". Bloomberg.Com. Bloomberg News. Retrieved September 22, 2015. 
  10. ^ "Retrophin Sues Founder in Latest Fight Over Use of Funds". Bloomberg Business News. 2015-08-17. Retrieved 2015-09-22. 
  11. ^ "Retrophin Sues Founder Martin Shkreli For $65M. His Reply: 'Preposterous'". Forbes.com. August 15, 2015. Retrieved September 22, 2015. 
  12. ^ a b "Price-Gouging Pharma CEO Under Investigation for Insider Trading and Fraud". US Uncut. September 22, 2015. Retrieved September 28, 2015. 
  13. ^ a b c "Federal Prosecutors Target Martin Shkreli in a Criminal Investigation". Newsweek. September 23, 2015. Retrieved September 27, 2015. (subscription required (help)). 
  14. ^ "Biotech's 'Boy Genius' Faces New Allegations of Wrongdoing". Bloomberg News. February 23, 2015. Retrieved September 28, 2015. 
  15. ^ Weintraub, Arlene (February 27, 2015). "Gadfly Pharma Investor Shkreli Starts Anew After Ousting From Retrophin". Forbes. Retrieved September 24, 2015. 
  16. ^ a b c d "Drug Goes From $13.50 a Tablet to $750, Overnight". The New York Times. Sep 20, 2015. 
  17. ^ James Woods. "Company Hikes Price 5,000% For Life-Saving Cancer and AIDS Drug". U.S. Uncut. 
  18. ^ "Company Acquires Rights To Drug Used By AIDS/Cancer Patients; Immediately Raises Per Pill Price From Under $14 To $750". Techdirt. 2015-09-19. 
  19. ^ "Martin Shkreli, the Mercurial Man Behind the Drug Price Increase That Went Viral". New York Times. September 22, 2015. Retrieved October 10, 2015. 
  20. ^ James Surowiecki (12 October 2015). "Martin Shkreli Is Not the Problem". The New Yorker. 
  21. ^ "Daraprim Price Hike Controversy". snopes.com. 
  22. ^ "Martin Shkreli Has One Idea, And It’s a Bad One". sciencemag.org. 
  23. ^ a b Long, Heather; Egan, Matt; Dodley, Dominique (September 22, 2015). "Meet the guy behind the $750 AIDS drug". Money.CNN.com. Retrieved September 23, 2015. 
  24. ^ "Martin Shkreli Will No Longer Price-Gouge AIDS Patients — What To Read". digg.com. 
  25. ^ "Drug Goes From $13.50 to $750 Overnight" Bloomberg News, 2:30, retrieved September 23, 2015]
  26. ^ Ramsey, Lydia (22 Sep 2015). "A pharma CEO tried to defend his decision to jack up the price of a critical drug by 5,000% — and it backfired". Business Insider. 
  27. ^ Reuters (22 Sep 2015). "Company hikes price of popular drug". Reuters. 
  28. ^ Carolyn Johnson (21 September 2015). "How an obscure drug’s 4,000% price increase might finally spur action on soaring health-care costs". Washington Post. 
  29. ^ "Mad Men Actor Talks to Expert About Meds Whose Price Was Raised Nearly 5000 Percent Overnight". HIVPlusMag.com. 
  30. ^ "Letter from the Infectious Diseases Society of America (IDSA) and the HIV Medicine Association (HIVMA)" (PDF). hivma. Infectious Diseases Society of America. Retrieved September 23, 2015. 
  31. ^ Bloomfield, Doni (September 22, 2015). "Drug CEO Targeted by Clinton Is Criticized by Drug Lobby". Bloomberg.com. Retrieved September 23, 2015. 
  32. ^ LoGiurato, Brett. "Donald Trump trashes former hedge-fund guy who jacked up drug price: 'He looks like a spoiled brat'". Business Insider. Retrieved September 23, 2015. 
  33. ^ Eunjung Cha, Ariana (September 22, 2015). "CEO who raised price of old pill more than $700 calls journalist a ‘moron’ for asking why". The Washington Post. Retrieved September 23, 2015. 
  34. ^ "Label cuts ties with hedge fund man who boosted Aids drug price 5,000%". The Guardian. September 25, 2015. Retrieved September 28, 2015. 
  35. ^ "Tweets with replies by Martin Shkreli (@MartinShkreli) - Twitter". twitter.com. 
  36. ^ a b Let's Get in the Middle Of It: "Martin Shkreli". YouTube. 21 September 2015. 
  37. ^ Mitchell, Andrea; Helsel, Phil (September 23, 2015). "Drug CEO Will Lower Price of Daraprim After Hike Sparked Outrage". NBC News. Retrieved September 23, 2015. 
  38. ^ "Martin Shkreli update on Daraprim price". Tech Insider. 8 October 2015. 
  39. ^ Bernie Sanders (September 21, 2015). "2015-09-01 EEC Sanders to Turing Pharmaceuticals" (PDF). United States House Committee on Oversight and Government Reform (Democratic Party). Retrieved October 9, 2015. 
  40. ^ "Drug firm maligned for 5,000 percent price hike turns to K Street for help". The Hill. 
  41. ^ Catherine Ho (7 October 2015). "Working for ‘the most hated man in America’". Washington Post. 
  42. ^ Tannahill, Jason (9 Oct 2015). "PR Man Allan Ripp Representing The "Most Hated Man in America"". EverythingPR. 
  43. ^ Competitor to Offer $1 Pill After Turing Price Hike Outrage, NBC News, October 22, 2015
  44. ^ "Drugmaker Turing Suggests It Won't Cut List Price of Daraprim". Bloomberg News. November 24, 2015. 
  45. ^ "Turing reneges on drug price cut, rival’s version sells well". Washington Post. Associated Press. Retrieved 27 November 2015. 
  46. ^ "KaloBios Pharmaceuticals, Inc. Appoints Martin Shkreli CEO and Announces New Financing". Kalobios. 
  47. ^ Arlene Weintraub. "Here's Why Shkreli Is Going To Have His Hands Full Trying To Save KaloBios". Forbes. 
  48. ^ Wolf, Jacob (May 6, 2015). "Millionaire pharmaceutical CEO set to shake up Challenger scene with new team". The Daily Dot. Retrieved August 27, 2015. 
  49. ^ WEBER, ALEXANDRE "DRPUPPET" (May 4, 2015). "Enemy Esports Turned Down $1.2 Million For Their League of Legends Team". eSports Go. Retrieved September 24, 2015. 
  50. ^ Wolf, Jacob (August 7, 2015). "Imagine and Odyssey merge, add Leviathan Dota 2 squad". The Daily Dot. Retrieved August 27, 2015. 
  51. ^ Ciubotaru, Andra (August 18, 2015). "Recently merged League of Legends organization adds Team Leviathan Dota 2 squad". DotaBlast. Retrieved August 27, 2015. 
  52. ^ "Martin Shkreli, widely scorned CEO, livestreams his life". STAT. 
  53. ^ Martin Shkreli. YouTube. 
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