KaloBios Limits Martin Shkreli's Role

KaloBios Pharmaceuticals Inc., the small drug company caught in the glare of publicity surrounding Martin Shkreli, has reached a deal that limits the price-hiking former executive's role in its future.

Mr. Shkreli was chief executive of KaloBios in December when he was arrested for securities fraud unrelated to KaloBios. He denies the fraud charges and has said he was targeted unfairly for prosecution due to the publicity surrounding his move, while at another drug company, to raise the price of a vital drug drastically overnight.

KaloBios ousted him as chief executive, but the continued attention garnered by Mr. Shkreli has taken a toll on the pharmaceutical company's efforts to get back on its feet in bankruptcy protection.

On Tuesday, KaloBios detailed a settlement with Mr. Shkreli that ends the threat of litigation over his brief tenure at the company, which lasted less than a month, and sets the stage for "a cleaner break from weight and burden of the past," as KaloBios's lawyers put it in a court filing.

KaloBios wasn't involved in the events leading to the criminal charges, which date back to Mr. Shkreli's days as a hedge-fund manager and involve activities at another drug company, but KaloBios's name continued to be associated with its former CEO. For example, the brokerage account Mr. Shkreli pledged as security to stay out of jail on the fraud charges is packed with KaloBios shares.

Write to Peg Brickley at [e-mail]

(END) Dow Jones Newswires

June 14, 2016 16:05 ET (20:05 GMT)

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