Bad-boy ex-pharma CEO Shkreli calls fraud charges 'baseless' - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Bad-boy ex-pharma CEO Shkreli calls fraud charges 'baseless'

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Martin Shkreli, the former hedge fund manager under fire for buying a pharmaceutical company and ratcheting up the price of a life-saving drug, is escorted by law enforcement agents in New York Thursday, Dec. 17, 2015. Martin Shkreli, the former hedge fund manager under fire for buying a pharmaceutical company and ratcheting up the price of a life-saving drug, is escorted by law enforcement agents in New York Thursday, Dec. 17, 2015.

NEW YORK (AP) — Bad-boy ex-pharmaceutical company CEO Martin Shkreli (SHKREL'-ee) says fraud allegations against him are "baseless and without merit."

Shkreli tweeted Saturday: "I am confident I will prevail."

The 32-year-old former hedge fund manager pleaded not guilty Thursday in Brooklyn federal court and was released on $5 million bail.

Shkreli was charged with securities fraud and conspiracy. Prosecutors say from 2009 to 2014, Shkreli lost some of his hedge fund investors' money through bad trades, then looted a pharmaceutical company where he was CEO for $11 million to pay back his disgruntled clients.

Shkreli was already widely reviled because a drug company he founded raised the price of a life-saving drug from $13.50 to $750 per pill. He resigned as the company's CEO on Friday.


Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[This is an update to previous story below]

TRENTON, N.J. (AP) — The pharmaceutical executive reviled for price-gouging resigned Friday as head of the drugmaker Turing Pharmaceuticals, a day after being arrested on charges of securities fraud related to a company he previously ran.

Martin Shkreli, whose arrest delighted countless people appalled by his unapologetic stance after hiking the price of a life-saving drug by 5,000 percent, is being replaced on an interim basis by Ron Tilles, according to a statement issued Friday by Turing, which is privately held.

Tilles has been chairman of Turing's board of directors since the company was founded late last year. Turing said that Tilles will continue to hold the board chairman position as well. He has worked at numerous private equity and venture capital firms in the pharmaceutical and medical device industries over the last two decades.

Turing also issued a statement that business would continue as usual and that no patient would be denied access to Daraprim, the drug whose price hike made Shkreli a pariah to both patients and other pharmaceutical companies.

Turing also said it was sending a similarly worded letter to doctors stressing that it will continue to offer financial assistance to eligible patients needing Daraprim who are either uninsured or have commercial insurance. Medicare patients are being referred to a charity for help.

Shkreli, a 32-year-old former hedge fund manager, has become the "most hated man in America," according to some headline writers, for jacking up the price of Daraprim, the only approved drug for toxoplasmosis, a life-threatening parasitic infection that mainly strikes pregnant women, cancer patients and AIDS patients, from $13.50 to $750 per pill. He did so this fall, shortly after Turing acquired rights to sell the pill in the U.S., paying another company $55 million for it.

READ RELATED: San Diego-based drug company offers low-cost version of price-hiked Turing drug

Amid a deluge of criticism from patients and politicians, Shkreli pledged to lower Daraprim's price, but later reneged and instead offered hospitals a 50 percent discount — still amounting to a 2,500 percent increase. Patients normally take most of the weeks' long treatment after returning home, so they and their insurer still face the $750-a-pill price.

On Thursday, federal prosecutors said that between 2009 and 2014, Shkreli lost some of his hedge fund investors' money through bad trades, then looted Retrophin, a pharmaceutical company where he was CEO, for $11 million to pay back his disgruntled clients. Shkreli founded the company early in 2011 and was sued by Retrophin and fired last fall after his alleged misappropriations were revealed.

Shkreli, a flagrant self-promoter who recently said he should have hiked the price of Daraprim even more, was paraded in handcuffs by the FBI after his arrest. Photos of him, wearing a gray hoodie as he was escorted by authorities, spread on the Internet like wildfire, generating social media posts celebrating his apparent fall. The news — unrelated to his actions at Turing — delighted patients, advocacy groups and average Joes who found his price-gouging despicable.

Shkreli pleaded not guilty to charges of securities fraud and conspiracy, which carry a sentence of up to 20 years in prison if he's convicted. He was released on $5 million bail.

He later posted on his Twitter account: "Glad to be home. Thanks for the support."

Turing, which has offices in New York and Zug, Switzerland, said Tilles has worked with several securities firms, starting with Merrill Lynch in 1985.

In the company's statement, Tilles said he's excited by the chance to guide Turing and that it's "committed to ensuring that all patients have ready and affordable access to Daraprim" and a second drug, Vecamyl, a pill for treating high blood pressure.

Tilles also thanked Shkreli "for helping us build Turing Pharmaceuticals into the dynamic research-focused company it is today," a reference to Shkreli's after-the-fact claim that he needed to raise Daraprim's price so much to fund research on other drugs.

Shkreli recently became the CEO of a second company, KaloBios Pharmaceuticals, Inc., based in South San Francisco, California. There's no word yet on whether he'll remain at the helm there.

KaloBios had announced plans to stop research programs on two drugs and shut down the company shortly before Shkreli and an invested group swooped in on Nov. 19, bought 70 percent of its shares and promised a $3 million stock investment and $10 million in financing. Shkreli was named CEO and board chairman the same day, and KaloBios shares zoomed from $2.07 to $39.50 within days.

Trading in KaloBios shares was halted early Thursday,after Shkreli's arrest, and hasn't resumed. Their price fell to $23.59 .

Copyright 2015 The Associated Press.

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