Update: KaloBios Saved From Shut-Down By Turing Pharma’s Martin Shkreli

California-based KaloBios announced it would be shutting its doors last week, following a number of failed clinical trials. The company had already hired a liquidation consultant when controversial CEO of Turing Pharmaceuticals, Martin Shkreli, swooped in and purchased a controlling stake of KaloBios.

Shkreli was motivated to buy 1.2 million shares of KaloBios for approximately $1.6 million, in an effort to save the company’s lead asset – lenzilumab. The company’s share price rose over 700 percent – as high as $23.76 per share – after Shkreli took control of the company.

Investors read into the acquisition as a sign that Shkreli plans to move Turing Pharmaceuticals into a publically-traded company, without an initial public offering (IPO). According to Shkreli, that wasn’t his intention, saying Turing Pharmaceuticals could go public “whenever I feel like it.”

Shkreli said he believes there is promise in the KaloBios-owned antibody, lenzilumab, which failed to meet its endpoints in a Phase II clinical trial for severe asthma. Before KaloBios started the liquidation process, they intended to conduct a Phase I clinical trial of lenzilumab for chronic myelomonocytic leukemia (CMML) – a rare but often fatal disease with no regulator-approved treatments.

While the clinical trial was cancelled by KaloBios, Shkreli commented that now that he has control over the drug developer the trial will continue as planned, with enrollment expected to commence this year. “I’m happy to save this company from the brink,” said Shkreli. “They announced they were going to shut down, and I came in and said, ‘No, you’re not.’”

While lenzilumab failed in its Phase II asthma clinical trial, Shkreli was encouraged by the experimental drug’s ability to show a clinically relevant effect on its target – a cytokine known as GM-CSF. As hypersensitivity to GM-CSF is involved in the growth of CMML cells, this rare disease is “a home-run indication” for the drug, according to the Turing Pharmaceuticals CEO.

Shkreli isn’t the first to see promise in the ability of a drug to act as a GM-CSF antagonist; in 2013, GlaxoSmithKline attempted to license an antibody similar to lenzilumab from MorphoSys, with the plan of further developing the treatment as a possible therapy for rheumatoid arthritis.

Shkreli became a household name earlier in the year when he acquired a decades-old antiparasitic drug from Impax Pharmaceuticals and immediately hiked the price by 5,000 percent. The move made waves across the industry and renewed the government’s interest in drug pricing in the US.