kbioKaloBios Pharmaceuticals Inc (OTCMKTS:KBIOQ), a developmental stage biopharmaceutical company focused on advancing medicines for patients with neglected and rare diseases, announced today that it has signed a definitive Governance Agreement with Martin Shkreli, regarding his ownership of the company’s common stock, including an option for the company to repurchase his shares as well as provisions significantly restricting his actions as a shareholder.

“This agreement is another step in the company’s pursuit of revitalizing its reputation,” said Cameron Durrant, MD, KaloBios chairman and CEO. “KaloBios is building a company committed to transformational ideas, like transparent and responsible pricing, to drive change. This agreement combined with our recent emergence from bankruptcy helps to hit the ‘re-set’ button and move forward.”

The agreement contains provisions regarding the acquisition, disposition, holding and voting of securities of the company by Mr. Shkreli. The agreement applies to all common stock owned by him or affiliates he controls.

Under the terms of the agreement, for 180 days following June 30 – the company’s effective emergence from its Chapter 11 bankruptcy proceedings – Mr. Shkreli may not sell his shares to any third party at a price per share that is less than the greater of (x) $2.50 and (y) a 10% discount to the prior two-week volume-weighted average price (the “Market Discount Price”).

In addition, for 180 days following the 61st day after June 30, KaloBios will have a right to purchase any or all of Mr. Shkreli’s shares at a purchase price per share equal to the Market Discount Price. For a limited time, the company will also have a right of first refusal to purchase shares thatMr. Shkreli proposes to sell. Mr. Shkreli is also prohibited from transferring any shares to his affiliates or associates unless such transferee agrees to be subject to the terms of the agreement. Transfers of shares by Mr. Shkreli not made in compliance with the agreement will be null and void.

Mr. Shkreli will not have any right to nominate directors to the board of directors of the company and agrees in connection with any shareholder vote to vote his shares in proportion to the votes of the company’s public stockholders. The agreement also prohibits Mr. Shkreli or his affiliates for a period of 24 months after the date of signing, from:

  • Purchasing any stock or assets of the company;
  • Participating in any proposal for any merger, tender offer or other business combination, or similar extraordinary transaction involving the company or any of its subsidiaries;
  • Seeking to control or influence the management, the company’s Board or the policies of the company; or
  • Submitting any proposal to be considered by the stockholders of the company. ?

In a separate agreement, KaloBios also settled class action litigation associated with Mr. Shkreli’s tenure with the company. The company reserved for issuance 300,000 shares of the company’s common stock to the plaintiffs in class action litigation related to the events surrounding the company’s former chairman and chief executive officer. ?

KaloBios announced July 1 that it emerged from Chapter 11 bankruptcy effective June 30 with $14 million in equity financing and also acquired the rights from Savant Neglected Diseases LLC to develop benznidazole for the treatment of Chagas disease. (Original Source)

Shares of KaloBios Pharmaceuticals closed yesterday at $4.01, down $0.30 or -6.96%. KBIOQ has a 1-year high of $45.82 and a 1-year low of $0.44. The stock’s 50-day moving average is $3.89 and its 200-day moving average is $3.93.

KaloBios Pharmaceuticals, Inc. engages as a biopharmaceutical company, which focuses on the development of monoclonal antibody therapeutics. It develops a portfolio of proprietary and patient-targeted monoclonal antibodies designed to treat severe life-threatening or debilitating diseases for which there is an unmet medical need, with a clinical focus on severe respiratory diseases and cancer. Its antibody technology, Humaneered, treats serious medical conditions with a primary clinical focus on respiratory diseases and cancer.