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'Pharma bro' Martin Shkreli settles all cases with Retrophin weeks after suing drug company's directors from prison

Key Points
  • Notorious "pharma bro" Martin Shkreli has reached a settlement with his former biopharmaceutical company Retrophin to resolve "all outstanding disputes" just weeks after he sued two company directors and its ex-general counsel from prison.
  • Shkreli's suit, now dismissed, accused Retrophin's chairman of the board of directors, Gary Lyons, former company CEO Stephen Aselage, who currently is a director, and the firm's former top lawyer, Margaret Valeur-Jensen, of using fraud to oust him as head of the company in 2014.
  • Shkreli became infamous in 2015 after the company he founded following his ouster from Retrophin – Turing Pharmaceuticals — hiked the price of its drug Daraprim by more than 5,000%.
Martin Shkreli
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Notorious "pharma bro" Martin Shkreli has reached a settlement that "covers all outstanding disputes" with his former biopharmaceutical company Retrophin just weeks after he sued two company directors and its ex-general counsel from prison, Retrophin said Thursday.

Terms of the settlement were not disclosed. But Retrophin issued a statement to CNBC on Thursday when asked about Shkreli having filed a notice to dismiss on Tuesday of his recent lawsuit alleging fraud by the directors and ex-counsel.

"Retrophin and Martin Shkreli have reached a settlement resolving all outstanding disputes between them," a Retrophin spokeswoman said.

"We are pleased with this outcome and remain focused on delivering life-changing therapies to people living with rare diseases. Additional information about the settlement will be provided in Retrophin's forthcoming quarterly filing."

The spokeswoman confirmed that the settlement resolves not only Shkreli's latest suit, but also a legal action that Retrophin filed against him in August 2016 alleging that he had "breached his fiduciary duty of loyalty during his tenure as the Company's Chief Executive Officer and a member of its Board of Directors."

That action was pending in arbitration after Shkreli claimed it should be handled there instead of with a federal lawsuit, as Retrophin initially had called for. 

Shkreli's latest suit had accused Retrophin's chairman of the board of directors, Gary Lyons; former company CEO Stephen Aselage, who currently is a director; and the firm's former top lawyer, Margaret Valeur-Jensen, of using fraud to oust him as head of the company in 2014.

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Shkreli's lawsuit, which was filed in federal court in Manhattan on May 31, had sought damages of more than $30 million.

"After starting a biopharmaceutical company from scratch and turning it into a successful enterprise worth hundreds of millions of dollars, Mr. Shkreli was unceremoniously and illegally ousted from the company at the hands of Defendants," his suit had claimed.

On Tuesday, his lawyer filed notice that Shkreli's complaint was "voluntarily dismissed, with prejudice."

That means that Shkreli would be barred from refiling a suit of the same nature against the same defendants.

Shkreli's lawyer, Edward Kang, did not immediately respond to a request for comment.

The suit had been filed within days of Shkreli, 36, being transferred to a new prison in Pennsylvania.

He is serving a seven-year sentence for securities fraud related to his two defunct hedge funds and to Retrophin, which he founded after the funds financially collapsed.

Shkreli was convicted by a jury after a trial in August 2017 of three of eight criminal counts related to his hedge funds and to Retrophin. His release bond was revoked a month later when a judge said he was a danger to the public because of his offer on Facebook of a $5,000 bounty for samples of Hillary Clinton's hair.

Shkreli became infamous in 2015 after the company he founded after his ouster from Retrophin – Turing Pharmaceuticals — hiked the price of its drug Daraprim by more than 5,000%.

The medication is used to treat a parasitic infection found in pregnant women, babies and HIV patients. Turing is now known as Phoenixus.

He had served his sentence at a low-security prison in Fort Dix, New Jersey. He was transferred to a federal jail in Brooklyn, New York, and then to Pennsylvania after The Wall Street Journal reported in March that he was still helping to "call the shots" at Phoenixus with the help of a contraband cellphone at Fort Dix.