Martin Shkreli-founded drug company files for bankruptcy
10/05/2023 21:16
By Dietrich Knauth
NEW YORK, May 10 (Reuters) - Vyera Pharmaceuticals,
which previously settled price-fixing charges that resulted in
founder Martin Shkreli being banned from the pharmaceutical
industry, filed for bankruptcy late Tuesday to sell its assets.
Vyera said its bankruptcy was the result of declining
profits, increased competition for generic drugs, and litigation
alleging that Vyera suppressed competition for its most valuable
drug, Daraprim.
Daraprim is a life-saving anti-parasitic medicine that
Shkreli infamously raised the price on by more than 4000% and
worked to choke off generic competition for after the company
acquired the drug in 2015. Shkreli even directed Vyera to
continue anticompetitive actions while he was serving a prison
sentence on securities fraud charges, Vyera said in court papers
filed Wednesday.
Vyera, formerly known as Turing Pharmaceuticals, has between
$10 million and $50 million in assets and between $1 million and
$10 million in liabilities, according to a Chapter 11 petition
filed in Delaware bankruptcy court.
Vyera filed a Chapter 11 plan in court on Wednesday, laying
out it its intent to repay creditors through asset sales.
Besides Daraprim, Vyera's assets include a priority review
voucher that could be resold to other companies seeking
expedited drug approvals in the U.S. and about $5.6 million in
shares of Regnum Corp RGMP.PK . Vyera said that recently-sold
vouchers have fetched prices between $95 million and $120
million in sales that have occurred since 2020.
Vyera is facing multiple lawsuits related to its Daraprim
price hike, including a shareholder action, an antitrust
complaint filed by a generic drugmaker, and a demand for legal
fees from Duane Morris, the law firm that defended Shkreli in an
antitrust action brought by the U.S. Federal Trade Commission.
Vyera listed Duane Morris as its largest unsecured creditor in
its bankruptcy filing, with a $2.1 million asserted debt.
While Vyera settled the FTC charges related to the Daraprim
price hike, Shkreli refused to settle. He was hit with a $64.9
million judgment for anticompetitive conduct, which he has
appealed to the 2nd U.S. Circuit Court of Appeals.
A federal court in New York court later appointed a receiver
to seize Shkreli shares in Vyera's parent company and used them
to pay the FTC judgment.
Shkreli was convicted in August 2017 of defrauding investors
in two hedge funds he ran, and scheming to defraud investors in
drugmaker Retrophin Inc, where he had been chief executive.
(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and
Daniel Wallis)
((Dietrich.Knauth@thomsonreuters.com;))