(Bloomberg) — KaloBios Pharmaceuticals Inc. plummeted 50 percent Thursday in early trading after the drug companys Chief Executive Officer Martin Shkreli was arrested in New York Thursday morning on securities fraud charges related to one of his prior companies.
Shkreli bought a majority interest in KaloBios last month and named himself CEO. The companys stock was trading at less than $1 before he made the move, and the stock subsequently rose to as high as $39.50, giving the company a market value of more than $100 million.
KaloBios shares fell 50 percent to $11.75 in New York trading before the market opened. Trading in the stock was halted as of 6:48 a.m.
Prosecutors have charged Shkreli with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it pay off debts from unrelated business dealings. He was later ousted from the company, where hed been chief executive officer, and sued by its board. Shkreli has previously denied any wrongdoing related to the matter.
–With assistance from Keri Geiger.
