KaloBios (KBIO) CFO and Accounting Firm Resign, Stock Could be Delisted

Shares of KaloBios Pharmaceutical Inc. (KBIO) have been halted from trading since the arrest of Chief Executive Martin Shkreli on December 17th on securities fraud charges. News that the company had fired Shkreli shortly after his arrest came out on December 21st, and was followed by his resignation from the board along with a close associate, Tony Chase. Shkreli was also ousted from his Chief Executive position at Turing Pharmaceuticals the week before. KaloBios stock closed at $23.59, down -1.26 or -5.09 percent after having lost over half its value in December 17th’s premarket trading.

South San Francisco, California based KaloBios Pharmaceutical Inc. is a biopharmaceutical company focused primarily on the development of monoclonal antibody therapeutics for the treatment of a variety of diseases.

KaloBios pharmaceutical pipeline is comprised of their proprietary Humaneered antibodies, which are customized antibodies used in the treatment of cancer patients. The company’s pipeline includes, KBOO4, a treatment for patients with hematological malignancies, and KBOO3, an antibody intended to evaluate where the granulocyte-macrophage colony-stimulating factor (GM-CSF) may play a role in indications of chronic myelomonocytic leukemia.

In an 8-K filing with the Securities and Exchange Commission, the company yesterday announced that its interim Chief Financial Officer, Christopher Thorn and the company’s independent registered accounting firm, Marcum LLP had resigned. In addition, the filing said that the company had received a letter from the NASDAQ Stock Market LLC stating that the Nasdaq Listing Qualification Staff had decided to delist the company’s securities pursuant its discretionary authority under Listing Rule 5101.

In addition to the criminal indictment of Shkreli, the company’s controlling stockholder and former Chief Executive, the Nasdaq Staff cited a number of other reasons for their decision to delist the stock including the indictment of the company’s outside legal counsel, Evan Greebel on similar charges. Besides the criminal charges, the SEC has filed a civil complaint against Shkreli and Greebel on similar allegations.

KaloBios has not yet filed a Form 10-Q with the SEC for the period ended on September 30th, which was disclosed on November 17th and in violation of Nasdaq Listing Rule 5250(c)(1) constituting an additional basis for the stock’s delisting. KaloBios has not yet determined whether to appeal the Nasdaq Staff’s delisting decision, which has a deadline of December 28th. If the company does not appeal the Nasdaq Staff’s decision, KaloBios stock will be delisted on December 30th.

Shkreli was released soon after being arrested on $5 million bail. He and Greebel have both pleaded not guilty to the charges of securities fraud. According to federal prosecutors, Shkreli made a number of losing trades for the customer’s of his hedge fund, MSMB Capital Management between 2009 and 2014. He then allegedly looted $11 million from Retrophin, a pharmaceutical company which he also ran to pay back his losing clients.

KaloBios has not yet announced who will serve as Chief Executive or Chief Financial officers. With the latest news, KaloBios stock could begin the year trading significantly lower and out of the pink sheets if the company does not appeal its Nasdaq delisting by Monday.

Other News About KBIO

Saxena White P.A. Files Securities Fraud Class Action Against KaloBios Pharmaceuticals, Inc.

Lawsuit on behalf of investors was filed in the Northern District of California yesterday.

Martin Shkreli Removed as KaloBios CEO

Shkreli was also removed from his position at Turing Pharmaceuticals.
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Published on Dec 24, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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