Interim U.S. Trustee Andrew Vara said in court papers yesterday that the outlook is so bleak for a bankrupt biotechnology company briefly led by controversial investor Martin Shkreli that its management should be replaced by an independent trustee, Reuters reported. KaloBios Pharmaceuticals Inc., based in South San Francisco, Calif., filed for chapter 11 protection in December just weeks after Shkreli was arrested for engaging in what U.S. prosecutors said was a Ponzi-like scheme at his former hedge fund. Vara yesterday asked the U.S. Bankruptcy Court in Delaware to consider putting KaloBios under a trustee or having the company's case converted to a chapter 7 bankruptcy. KaloBios is down to nine employees, has no ongoing trials and has no significant ongoing operations, Vara said. Additionally, a potentially pivotal deal to acquire a drug made by privately held Savant Neglected Diseases LLC is now off the table and KaloBios has only $2.9 million in unencumbered cash, Vara said. Read more.
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