[U] Continuing Carnage Dept.: Of Mr. Shkreli’s 2015 Frauds, On KaloBios — Now Called Humanigen…
August 7, 2017

UPDATED: 4:30 PM EDT — The company has just now been granted a TRO! Next hearing against Savant occurs August 17, 2017 — to consider a preliminary injunction. Woot! [End, updated portion.]

This morning, the company Mr. Shkreli helmed for only about 42 days — before being arrested — is changing its name. That is in no small part to further distance itself from. . . the stain of his name.

Along with the new name and ticker this morning, we will refresh our coverage of this now recovering public company. For his part, Mr. Shkreli’s a convicted felon now, and will likely be sentenced around Christmas, of this year. Poetically perfect, that. Just about two years after he was arrested, and this company was forced to declare bankruptcy as a result of his then accelerating fraud schemes.

But today’s news (almost completely ignored by the “regular” media, save one small West Coast behind pay-walls story) is that KaloBios/Humanigen has had to go seek an emergency TRO against Savant (its partner in the Chagas program), over the latter’s failure to pay its share of the cost overruns, on the Chagas development project. The cost overruns are due, in Humanigen’s view, to the fact that Savant did not have all the rights it needed to develop the project, when it signed with the then Shkreli-led company — something Savant represented and warranted last year — in the bankruptcy proceedings. Something any competent CEO (i.e., one other than Mr. Shkreli) would have been able to discern with due diligence. But now, almost two years later, it is the subject of a TRO motion in federal bankruptcy court in Delaware.

Here’s a bit from the company’s TRO brief (30 page PDF filed Friday, in Delaware):

. . . .Savant had represented that the assets it was selling were all that was needed to develop benznidazole for regulatory approval. Savant also agreed to assume responsibility for costs incurred in the development effort that exceeded the parties’ agreed-upon $8 million joint development budget by more thanr $500,000. KaloBios has made great strides over the last year in developing benznidazole for regulatory approval, in spite of the fact that Savant’s representations about the adequacy of its assets were not accurate. In doing so, KaloBios has incurred costs that Savant is obligated by contract to pay, an obligation Savant has refused to honor.

Instead, Savant has unleashed a campaign of harassment against KaloBios, manufacturing defaults and threatening to seize KaloBios’ assets. Late on the night of August 2, 2017, Savant made good on its threats by issuing a foreclosure notice, stating that, on August 9, 2017, KaloBios is to assemble and present to Savant for seizure the materials, contracts, inventory, records and information necessary to develop and commercialize benznidazole, and informing KaloBios that it intends to auction those assets at a public auction on September 1, 2017. . . .

To be fair, here is Savant’s counterclaim filing, in the same suit — and Savant’s Monday morning brief in response to the motion for a TRO. It has reached a full-rolling boiling point, in Delaware federal bankruptcy court — starting in an hour — by telephonic hearing.

Stay tuned — we will update you, here. [Postings here and on the other properties may be intermittent — as I have a series of leisure trips scheduled for mid-August to late September. . . . Smile.] Updated: Fixed the link to TRO brief — H/T to PathoPhilia!

नमस्ते

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