After recording gains of more than 430% in a matter of four trading sessions, the stock price of KaloBios Pharmaceuticals Inc (OTCMKTS:KBIOQ) closed in red in yesterday’s trading session. As of March 29, 2015 the stock closed at $9.80 per share with a market cap of 55.67 million. The 52-week price range is $0.44 to $45.82 while EPS is -$8.11.
KaloBios stock has witnessed heavy volatility in the last few months, and the reason being a group of investors headed by Martin Shkreli bought a majority stake in the firm in last November. Within six trading sessions, the stock posted gains of over 4000%. By December 2015, Mr. Shkreli was terminated from his CEO role following the allegations of securities fraud.
Bankruptcy
In December 2015, KaloBios filed for bankruptcy, and now is functioning under ‘Chapter 11’ bankruptcy protection. It intends to restructure its finances and attract additional funds. So far, the company has sourced $14,000,000 in finances, in part from Black Horse Capital LP and Nomis Bay Ltd.
Using these loans, the company is in the process of finalizing an agreement with Savant Neglected Diseases LLC to purchase benznidazole. The proposed agreement, led by CEO Dr. Cameron Durrant, can probably pull the struggling firm out of bankruptcy. The finances from Nomis Bay and Black Horse Capital have been finalized with the assertion that former-CEO Mr. Shrekli will not hold over 20% of stake following the bankruptcy procedure. Judge Laurie Selber Silverstein intends to permit the company to advance with these loans.
The agreement
Nomis Bay and Black Horse Capital have approved to terms on an Amended Stalking Horse LOI which offers KaloBios with a $3,000,000 DIP financing facility. The funds were approved on March 24. The new CEO expects the additional funds to enable the firm to commence the revival of its drug advancement programs, and a clinical testing program planned for ‘KB003’.
