Turing replaces CEO Martin Shkreli

Martin Shkreli has resigned as CEO of Turing Pharmaceuticals, a day after he was arrested by the FBI on seven counts of securities fraud and conspiracy, the drugmaker confirmed Friday. The position of interim chief executive will be filled by board chairman Ron Tilles, who thanked Shkreli "for helping us build Turing Pharmaceuticals into the dynamic research-focused company it is today."

The former Turing CEO is accused by US authorities of illegally taking stock from Retrophin, a biopharmaceutical company he founded, and using it to cover losses incurred in business dealings from his time as manager of a hedge fund. A prior report indicated that Shkreli, who pleaded not guilty to the charges, has been under criminal investigation in the US since at least January.

Retrophin replaced Shkreli as CEO in October 2014, and later filed a $65-million lawsuit alleging he took the company public in order to funnel stock to his hedge-fund investors when the hedge fund became insolvent.

Shkreli also came under heavy criticism recently for his decision as CEO of Turing to increase the price of the toxoplasmosis drug Daraprim (pyrimethamine) from $13.50 a tablet to $750 a tablet. He later suggested the cost would be reduced to make Daraprim "more affordable," but has since said Turing will retain the current list price, while offering a discount to hospitals (for related analysis, see Spotlight On: Shkreli's Turing risks ceding ground in public policy debate on drug pricing).

Shkreli was recently named CEO of KaloBios after acquiring a 70-percent stake in the company as part of an investor group. Earlier this month, a report said the CEO was planning to dramatically raise the price of the Chagas disease therapy benznidazole, which KaloBios had recently acquired. For further analysis, see ViewPoints: KaloBios investors unlikely to find much sympathy.

Meanwhile, Turing's chief commercial officer Nancy Retzlaff stated that the company's "priority continues to be supporting our healthcare providers and their patients to ensure that patients who need Daraprim have ready and affordable access to it." She added that "we pledge that no patient needing Daraprim will be denied access."

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