Soldier with a contraband phone, an prison Martin Shkreli is planning a comeback with its famous pharmaceutical company, according to a report by Wall Street Journal. So, however, the company is still losing millions of dollars.
Shkreli is just 16 months into a seven-year prison sentence on securities fraud charges. He was jailed last year for running what federal prosecutors described as a Ponzi-like scheme that defrauded investors of his hedge funds. According to prosecutors, the fund received millions from a pharmaceutical company he founded, called Retrophin.
But Ponzi-siphoning isn’t what made Shkreli famous. He gained notoriety in 2015 when giant The pharmaceutical company he founded, Turing Pharmaceuticals, bought the rights to a decade-old anti-parasitic drug, Daraprim, and unexpectedly increased its price from $13.50 a pill to $750 a pill. The increase brought a collapse in profits for Turing, as well as widespread condemnation and increased scrutiny over the drug-pricing practices of the pharmaceutical industry as a whole.
Amid federal charges and conviction, Shkreli stepped down as Turing’s CEO, and the company tried to distance itself from the disgraced executive. He changed his name twice—first to Vyera, then to Phoenixus, his current name.
Although Phoenixus does not reduce the price of Daraprim, it does not pay off. Daraprim sales began to slip amid public reaction and competition. Last year, the company lost $1.2 million in the first quarter. And apparently things have not been good since then, according to them WSJ. The company’s quarterly financial statement indicated a net loss of $10.3 million a year, leaving $37.7 million in cash.
This doesn’t seem to have stopped Shkreli. He is reportedly working hard on making a pharmaceutical comeback once he is released from prison in 2023. According to his calculations, Phoenixus could be worth $3.7 billion by that time, up from his generous 2017 estimate of $500 million. With a contraband phone and access to scientific research on prison computers, Shkreli is said to be calling the shots. He is (allegedly) advising Phoenixus agents and making deals to get the company more money marketers like Daraprim.
In September, Shkreli negotiated a $20 million deal with Orphan Star Therapeutics LLC, which will go toward developing drugs for rare diseases. In January, Phoenixus licensed a drug to a company called Seelos for $1.5 million and 250,000 Seelos shares.
Phoenixus investors—including French businessman Bertrand des Pallieres—are wary of the deals, and are pushing for more transparency. “We suspect a lot of personal dealings,” des Pallieres told WSJ.
Doing business from prison is prohibited. According to company partners, the Federal Bureau of Investigation is reportedly looking into Shkreli’s involvement in Phoenixus.