The internet has reacted with joy to the news of Shkreli's arrest:
I love a little karma with my coffee in the morning. Martin Shkreli has been arrested for securities fraud. https://t.co/Pzdd5rvgHG— Capt. Brooks Solo (@byobrooks) December 17, 2015
Martin Shkreli's bail was going to be set at $500,000 but they raised it to $27,500,000 just for him.— Kelsey D. Atherton (@AthertonKD) December 17, 2015
Shkreli said the company would cut the drug's price. Last month, however, Turing reneged on its pledge. Instead, the company is reducing what it charges hospitals for Daraprim by as much as 50 percent. Most patients' copayments will be capped at US$10 or less a month. But insurance companies will be stuck with the bulk of the tab, potentially driving up future treatment and insurance costs.
Turing, with offices in New York and Switzerland, spent US$55 million in August for the US rights to sell Daraprim.
The uproar over price hikes at Turing and by other companies like Valeant Pharmaceuticals led to government investigations, proposals by politicians to fight "price gouging," heavy media scrutiny and a drop in stock prices for biotech companies.
However, the price of KaloBios Pharmaceuticals shares surged from around US$2 to above US$40 after the struggling cancer drug developer named Shkreli chairman and CEO in November. The South San Francisco, California, company had been winding down operations when Shkreli and the group swooped in to take control and committed to a US$10 million equity financing facility.
Shares of KaloBios Pharmaceuticals Inc. shed more than half their value, or US$12.56, to US$11.03 in early trading Thursday.
In an August civil lawsuit in Manhattan federal court, Retrophin sued its founder, Shkreli, seeking $65 million in damages and disgorgement of Shkreli's compensation from the company.
It said Shkreli repeatedly breached his duty of loyalty to Retrophin, which was formed in March 2011, by using his control of the company to enrich himself and to pay off the claims of financial fund investors he had defrauded.
The lawsuit said he obtained over $5.6 million in cash or Retrophin shares through his schemes and obtained the use of over two million shares of Retrophin, which were worth over $59 million last summer.