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Life After Martin Shkreli For KaloBios Pharmaceuticals Inc (OTCMKTS:KBIO)

Life After Martin Shkreli For KaloBios Pharmaceuticals Inc (OTCMKTS:KBIO)
Written by
Jarrod Wesson
Published on
August 5, 2017
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KaloBios Pharmaceuticals Inc (OTCMKTS:KBIO), which became famous because of its controversial ex-CEO, Martin Shkreli, seems to be doing great after Mr Shkreli got fired. The new drug application submission associated with benznidazole in Chagas disease and a submission for rare pediatric designation and orphan drug designation for lenzilumab in Juvenile Myelomonocytic Leukemia (JMML) should be appreciated by the market. Additionally, new commitments from investors up to $5 million were announced. We will give you all the details in this piece, but first of all have a look at the recent share price action:BusinessKaloBios Pharmaceuticals Inc. focuses primarily on making advanced medicines for patients with the rarest and most neglected diseases. KaloBios Pharmaceuticals recently heralded that it is going to continue doing business as Humanigen, Inc. From August 7, the company will operate as Humanigen. Shares related to the company will be traded using the symbol, “HGEN” on the OTCQB market. Cameron Durrant, the CEO, Chairman, and Managing Director of Humanigen said:

Moving forward as Humanigen will give us a new platform to continue our significant progress, to focus on the future, and to deliver value for patients, investors and all our other stakeholders."

Within a year, the company has improved in its clinical sector and accomplished various milestones. Humanigen’s achievements include benznidazole in Chagas disease and lenzilumab in CMML. The company’s name change is a fresh start for the company to move beyond Martin Shkreli.On July 11, 2017, the company announced that the U.S. Food and Drug Administration had granted orphan drug designation to benznidazole being used in the treatment of rescuing patients from a Chagas disease, which is a rare and neglected tropical disease. The good news is that the FDA has given explicit permission and concession to the developers of benznidazole including tax benefits and certain application fee reduction for the benefit of finding immediate solutions to deadly diseases, such as Chagas. The company is looking to submit its New Drug Application (NDA) in the first quarters of 2018. FDA has given clearance to most of the applications the company has submitted. In fact, the FDA is supporting the great cause of the firm in some ways, including the company’s proposal 505 (b)(2) for the regulatory pathway of benznidazole.On July 12, 2017, the company announced that it had received an additional commitment from investors up to $5 million. The motive is to provide the capital necessary to treat rare and neglected diseases in patients with advanced medicines. The advent of benznidazole in the treatment of rare leukemia was the reason behind the additional funds. Cameron Durrant, the CEO, Chairman, and Managing Director of Humanigen said:

We appreciate the ongoing support of our key investors as we execute our strategic priorities and remain on track in our development of benznidazole and lenzilumab."

Market Participants Another interesting fact that the market may have overlooked is the amount of market participants that disclosed a stake in the firm. Here is the list:NameSharesDate ReportedNOMIS BAY LTD.3,719,006Jun 29, 2016ANTHION PARTNERS II LLC378,210Dec 15, 2015BIESTEK MAREK250,000Dec 15, 2015DURRANT CAMERON135,583Jun 29, 2016BARLIANT RONALD93,786Jun 29, 2016FERNANDEZ THOMAS EDWARD6,821Dec 15, 2015HARRISON MICHAEL WAYNE1,705Dec 15, 2015SourceThe following share statistics can help comprehend the size of those stakes:Shares Outstanding 514.98MFloat6.29M% Held by Insiders 10.10%% Held by Institutions 127.80%Shares Short 3290.38kSourceConclusionIn our opinion, the image of KaloBios Pharmaceuticals was damaged by the association with Mr Shkreli. He was responsible for 5,000% price increase on a drug for a rare infection. That move made him "the most hated man in America". After the company fired him, we believe that a new era has commenced. The company is releasing very good news about new candidates and FDA submissions. Thus, it is again focusing on its business without any distractions. Additionally, the new commitment from investors for up to $5 million proves that the firm's recognition has been restored. Finally, the amount of market participants that have disclosed stakes in the company shows that a lot of people in the marketplace still believe in the company's future drug candidates. To sum up, we should be alert on this name, it is making a comeback.We will be updating our subscribers as soon as we know more. For the latest updates on KBIO, sign up below!Image courtesy of Esposado via FlickrDisclosure: We have no position in KBIO and have not been compensated for this article.

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