Pubblicato il 20 Novembre 2015 da Veronica Baker
SOUTH SAN FRANCISCO, Calif., Nov. 13, 2015 /PRNewswire/ — KaloBios Pharmaceuticals, Inc. (Nasdaq: KBIO) today announced that it will wind down its operations and that it has engaged the Brenner Group to lead those efforts.“Recent discussions around a number of possible strategic transactions have ended, and as a result, the company believes it is highly unlikely that continuing to explore strategic alternatives could generate a viable transaction within the time frame allowed by our limited cash resources,” said Herb Cross, Chief Financial Officer and Interim Chief Executive Officer.
The company will discontinue its two current development programs, KB004, being studied in Phase 2 for certain hematologic malignancies, and lenzilumab, or KB003, scheduled to initiate Phase 1 development later this year in chronic myelomonocytic leukemia (CMML). KaloBios has engaged the restructuring firm of The Brenner Group to assist in the wind down of operations and liquidation of the company’s assets. The company recently announced a reduction in operations and headcount affecting approximately 60% of the company’s 28 employees. As a part of its wind down and handing over management of the wind down to The Brenner Group, the company expects to phase out the remaining employees over the next thirty to sixty days. As a result of these developments, the company will not be able to file its Form 10-Q for the third quarter, primarily due to resource constraints.
The stock being talked about the most on trading desks today is KaloBios Pharma (NASDAQ: KBIO). After closing at around $2 per share, shares surged to as high as $21.05 (+953%) following a disclosure after the close from Turing Pharmaceuticals’ Martin Shkreli, a man demonized for jacking up drug prices, that he accumulated 1.2 million shares.
$2… $4… $6… $10… $12… shares keep climbing as short sellers were left stunned.
You see, just last week KaloBios Pharma announced that it would wind down its operations. It seemed like a “no brainer” to be short.
What Mr. Shkreli seized on was that, even if fully liquidated, there was a good chance there will be ample cash left over for common shareholders. While the company hasn’t released its third quarter financials, at June 30, 2015, KaloBios had cash, cash equivalents and investments totaling $23.2 million. Our back-of-the-envelope calculation suggests a value of about $2.60 (assuming a similar cash burn in Q3).
Shkreli had nothing to lose. He could buy up the float and worst case scenario make a nice profit on the wind-down.
Taking it a step further, Shkreli formed a group that now controls more than 50% of the outstanding shares with a proposal to continue the company’s operations.
With the possibility of a reverse merger with the most-hated-man-in-pharma, a short squeeze of epic proportion ensued.
Shorts were caught in the headlights, totally powerless. Brokers were forcing buy-ins to limit their exposure. Buying beget buying, beget buying. Even Shkreli, shit eating grin and all, could not have predicated what happened.
This morning, shares traded as high as $21.05. Now nearly $10 off the high they are still up 455% to $11.50. The damage has been done.
Multiple traders are saying they blew up their account on the KBIO trade. One post at profit.ly describes a trader blowing up an account he has steadily grown over time being short KBIO overnight. The trader was hit with a final margin call of $50,809.72. “I am with out words,” he said.
Another trader started a gofundme account claiming losses of $106,000 on a KBIO short gone bad.
Speculation even suggested brokerage firms like E*TRADE (NASDAQ: ETFC) may be holding the bag on millions in losses. An e-mail to E*TRADE about its exposure has not been returned as of the time of this article.
Some are asking if what Mr. Shkreli did was legal. As far as we know we don’t see illegal activity but that is a question for the SEC. As per protocol, the SEC would not comment on if they are investigating the trading in the stock.
Ricordarsi sempre che le penny stocks (con particolare attenzione alle infidissime Pharma e Biotech) sono sempre da trattare con lotti dimezzati e con un occhio particolare di attenzione !
(Penny stocks : titolo con prezzo <5USD e prevalentemente con sede al di fuori degli USA)