Health and Healthcare
KaloBios Continues to Rally on Private Placement
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KaloBios Pharmaceuticals Inc. (NASDAQ: KBIO) continues to vastly outperform the broad markets through December after Martin Shkreli took the helm. The company announced it has entered definitive agreements with a private placement, or PIPE financing. Upon closing of the transaction, KaloBios will receive gross proceeds of approximately $8.2 million in exchange for the issuance to investors of 280,170 shares of common stock of the company.
The company may increase the number of shares sold based on additional definitive agreements that may be received. Closing of the transaction is anticipated to occur the week of December 7 and is subject to customary closing conditions.
KaloBios intends to use the proceeds from the PIPE financing for an acquisition and to advance its pipeline of drug candidates, including its lead compound, lenzilumab for the treatment of myelomonocytic leukemia.
The company saw its shares skyrocket in mid-November. Over the course of about a week, Shkreli, CEO of Turing Pharma, took a major stake in this small biopharma company, causing shares to shoot up over 3,000%.
Shkreli is known for recently buying the rights to Daraprim, a drug used in AIDS treatment for toxoplasmosis, or blood parasites. After this purchase, he hiked the drug price by about 5,500%, which ultimately caused a great upheaval in the health care sector. Many began to question how to properly value drugs and treatments.
At the moment, it appears that Shkreli wants to keep this business in operation. There are reports that Turing’s CEO is in talks with KaloBios about continuing operations considering its development of cancer drugs. According to the release, “the company is in discussions with Mr. Shkreli regarding possible direction for the company to continue in operation.”
Shares of KaloBios were last seen trading up 6.8% at $31.33, with a consensus analyst price target of just $5.00 (from one analyst) and a 52-week trading range of $0.44 to $45.82.
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