Turing Pharmaceuticals on Friday appointed a new interim chief executive to replace the controversial Martin Shkreli, who resigned a day after he was arrested by the FBI amid a federal investigation involving his former hedge fund and a pharmaceutical company he previously headed.
Shkreli, who is still CEO of KaloBios Pharmaceuticals, was charged Thursday in a federal indictment related to his time managing hedge fund MSMB Capital Management and as CEO of biopharmaceutical company Retrophin. The 32-year-old entrepreneur this year became a lightning rod for controversy over soaring drug prices at Turing.
Ron Tilles will take over as Turing's interim CEO, and will remain chairman of the company's board, a position he has held since its founding last year. In a statement, Turing said that leadership changes would not affect its business, and "no patient needing Daraprim" — the drug hiked to $750 a tablet from $13.50 this year — would be denied access.
On Thursday, the U.S. attorney's office in Brooklyn, New York, unsealed an indictment against Shkreli, charging him with seven counts including conspiracy to commit securities fraud and conspiracy to commit wire fraud. U.S. Attorney Robert Capers alleged Shkreli used Retrophin to cover personal debts.
"As alleged in the indictment, Shkreli essentially ran his companies like a Ponzi scheme, where he used each subsequent company to pay off the defrauded investors in the prior company," Capers said.
Shkreli was released on a $5 million bond after a Thursday hearing, and had his travel restricted to parts of New York. He surrendered his passport and cannot contact MSMB or Retrophin employees.
He will next appear in court on Jan. 20.
Evan Greebel, whom the SEC said was Shkreli's lawyer, also faces a count of wire fraud conspiracy. He was arrested Thursday and released on a $1 million bail. Greebel's travel will also be restricted.
"We are deeply concerned that these charges have been made against Mr. Greebel. He has been with us for a relatively short period of time, and all the alleged activities occurred before he joined the firm," a spokeswoman for Greebel's firm Kaye Scholer said in a statement. "We are conducting our own internal investigation, and based on our findings we will take appropriate action."