UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 17, 2015

 

KaloBios Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

 

 

442 Littlefield Avenue

South San Francisco, CA 94080

(Address of principal executive offices, including zip code)

 

(650) 243-3100

(Registrant’s telephone number, including area code)

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

 

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

The NASDAQ Stock Market (“Nasdaq”) notified KaloBios Pharmaceuticals, Inc. (Nasdaq: KBIO) (the “Company”), by letter dated November 17, 2015, that the Company is not currently in compliance with Nasdaq’s continued listing requirement set forth in Rule 5250(c)(1) of the Nasdaq Listing Rules (the “Rules”), due to its failure to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (the “2015 Third Quarter 10-Q”) with the Securities and Exchange Commission (the “SEC”).

 

Under the Rules, the Company has 60 calendar days from November 17, 2015 to submit a plan to Nasdaq to regain compliance with the Rules.  The Company intends to file the 2015 Third Quarter 10-Q prior to such date and will submit a compliance plan to Nasdaq on or prior to January 16, 2016, if necessary.

 

If Nasdaq accepts the plan, it can grant an exception of up to 180 days from the due date of the filing of the 2015 Third Quarter 10-Q, or until May 16, 2016, for the Company to regain compliance with Rule 5250(c)(1). The Company may regain compliance at any time during this 180-day period upon filing its 2015 Third Quarter 10-Q, as well as all subsequent required periodic reports that are due within that period, with the SEC. If Nasdaq does not accept the Company’s compliance plan, the Company will have the opportunity to appeal that decision.

 

The Company intends to file its 2015 Third Quarter 10-Q with the SEC as soon as practicable. No assurance can be given that the 2015 Third Quarter 10-Q will be filed on or before January 16, 2016, or that Nasdaq will grant an exception to extend the period in which to bring the Company into compliance with Rule 5250(c)(1) beyond that date.

 

Forward Looking Statements:

 

The foregoing information includes forward-looking statements that are subject to risks and uncertainties. Additional considerations and other important risk factors affecting the Company’s business are described in the Company’s reports on Forms 10-K and 10-Q and other filings with the SEC. The forward-looking statements in this report speak only as of the date hereof.

 

Item 5.01 Change of Control of Registrant

 

On November 17, 2015, Martin Shkreli, David Moradi (through Anthion Partners II LLC (“Anthion”), a private investment vehicle of which Mr. Moradi is the Managing Member) and Marek Biestek (collectively, the “Control Group”) acquired over 50.1% of the Company’s outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), in the aggregate, through open market purchases. The Control Group are members of a “group” within the meaning of Rule 13d-5 and/or Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

 

As of the date of this Current Report, the Control Group owns an aggregate of 2,885,000 shares of the Common Stock or approximately 70.0% of the outstanding shares of the Common Stock. The aggregate purchase price for all securities purchased by the Control Group as of the date hereof is approximately $4,363,853. The source of funding for the purchase of these shares of Common Stock were the personal funds of Messrs. Shkreli and Biestek and the general working capital of Anthion.

 

As these purchases were made in the open market, control of the Company was not assumed from a particular person or group of persons. There are no arrangements known to the Company, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.

 

 

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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On November 19, 2015, the Company terminated Mr. Herb Cross from his position as Interim President, Chief Executive Officer and Chief Financial Officer of the Company, effective immediately, and Martin Shkreli was appointed as Chief Executive Officer of the Company and elected as Chairman of the Board.

 

Martin Shkreli, age 32, is currently the Chief Executive Officer and is founder of Turing Pharmaceuticals AG (“Turing”). Turing is considered an affiliate of the Company based on Mr. Shkreli’s control of Turing and his ownership interests in the Company. From December 17, 2012 until October 13, 2014, Mr. Shkreli served as the Chief Executive Officer and as a director of Retrophin, Inc. (Nasdaq: RTRX), a biotechnology company that develops treatments for rare and catastrophic diseases. In March 2011, Mr. Shkreli founded Retrophin, LLC (the predecessor to Retrophin, Inc.) and served as the President of Retrophin, LLC from the date of its formation. Mr. Shkreli was also the founder and managing partner of MSMB Capital Management, a New York hedge fund firm founded in 2006 that ceased to operate in 2013 that managed a variety of partnerships. Mr. Shkreli is an experienced biotechnology and pharmaceutical industry investor, particularly in businesses with orphan drugs. Mr. Shkreli received his Bachelors of Business Administration from Baruch College. The Company believes that Mr. Shkreli’s prior experience, attributes and skills are indicators of his professional competence for the role as Chief Executive Officer of the Company.

 

There are no family relationships between Mr. Shkreli and any director or executive officer of the Company, or any person nominated or chosen by the Company to become a director or executive officer. There are no relationships or related transactions between Mr. Shkreli and the Company that would be required to be reported under Item 404(a) of Regulation S-K.  There are no material plans (including compensatory plans), contracts or arrangements (whether or not written) with the Company to which Mr. Shkreli is a party.

 

On November 19, 2015, the board of directors of the Company (the “Board”) appointed Martin Shkreli as Chairman of the Board and Marek Biestek, Tony Chase and David Moradi as members of the Board. The then current directors of the Board, Ted W. Love, Denise Gilbert, Laurie Smaldone Alsup, Gary Lyons, Robert A. Baffi and Raymond M. Withy (collectively, the “Resigning Directors”), resigned, effective immediately after such appointments. The Resigning Directors had no disagreement with the Company that led to their respective resignations.  On November 22, 2015, the Board appointed Tom Fernandez and Michael Harrison as members of the Board and members of the Board’s Audit Committee, with Mr. Harrison appointed as chairman of such committee.

 

There are no arrangements or understandings between Messrs. Biestek, Chase, Fernandez, Harrison, Moradi, and Shkreli  (collectively, the “Newly Appointed Directors”) and any other persons pursuant to which each such director was selected as a director and there are no material plans, contracts or arrangements (whether or not written) with the Company to which the Newly Appointed Directors are a party. There are no relationships or related transactions between the Newly Appointed Directors and the Company that would be required to be reported under Item 404(a) of Regulation S-K.

 

The press release announcing the foregoing is attached as Exhibit 99.1 to this Current Report.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Number		Description
99.1		Press release dated November 19, 2015

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	KaloBios Pharmaceuticals, Inc.
	By:	/s/ Martin Shkreli
		Martin Shkreli Chief Executive Officer

 

 

Dated: November 23, 2015

 

 

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Exhibit 99.1

 

November 19, 2015

 

KaloBios Pharmaceuticals, Inc. Appoints Martin Shkreli CEO and Announces New Financing

 

Martin Shkreli, David Moradi, Tony Chase and Marek Biestek to join the Board of Directors

 

SOUTH SAN FRANCISCO, Calif., Nov. 19, 2015 /PRNewswire/ — KaloBios Pharmaceuticals, Inc. (Nasdaq: KBIO), today announced that an investor group led by Martin Shkreli, the Founder and Chief Executive Officer of Turing Pharmaceuticals AG, has acquired 70% of its outstanding shares. KaloBios also announced the appointment of Martin Shkreli to the position of Chief Executive Officer and his election as Chairman of the Board. In his new role, Mr. Shkreli will work with the company’s senior management team to ensure the Company’s continued operations. KaloBios further announced that David Moradi,Tony Chase and Marek Biestek have been elected to the Board of Directors. In connection with these developments, the former directors have resigned, effective immediately.

 

 

KaloBios has received a commitment from Mr. Shkreli and other investors for an equity investment of at least $3.0 million. In addition, Mr. Shkreli and the group of investors have committed to a $10 million equity financing facility, subject to applicable shareholder approval.

 

Martin Shkreli, Chief Executive Officer, said, “We believe that the KaloBios’ lenzilumab is a very promising candidate for the treatment of various rare and orphan diseases. This monoclonal antibody neutralizes soluble granulocyte-macrophage colony stimulating factor (GM-CSF), a central actor in leukocyte differentiation, autoimmunity and inflammation. Lenzilumab has particular promise in Chronic Myelomonocytic Leukemia (CMML), a disease with no FDA-approved treatment options and a 3-year overall survival rate of 20%.”

 

An IND for a Phase I/II CMML monotherapy study of lenzilumab has been cleared by the Food and Drug Administration(NCT02546284). Preclinical studies have shown lenzilumab can be used to cause apoptosis in CMML cells by depriving them of GM-CSF. Lenzilumab may also have clinical utility in other rare autoimmune and inflammatory disorders. A 31-patient Phase I/II clinical trial of lenzilumab will begin enrollment at eight leading oncology clinical trial sites by year end 2015 with interim results possible as soon as the first half of 2016.

 

The company has approximately $5 million in cash and will endeavor to file its quarterly results on Form 10-Q as soon as possible. Mr. Shkreli will continue as Chief Executive Officer of Turing Pharmaceuticals AG and the two companies will operate independently.

 

About KaloBios

 

KaloBios Pharmaceuticals, Inc. is seeking to improve the lives of patients by developing innovative therapies to treat diseases of high unmet medical need, with a current focus on oncology. KaloBios

 

 

 

has focused on advancing lenzilumab, an anti-GM-CSF mAb that KaloBios is evaluating in oncology indications where GM-CSF may play a key role, such as chronic myelomonocytic leukemia (CMML). The IND for lenzilumab in CMML, an orphan oncology indication, has been cleared by theFDA.

 

For more information on KaloBios Pharmaceuticals, please visit our web site at http://www.kalobios.com.

 

Forward-Looking Statements

 

This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and statements regarding the company’s clinical development of lenzilumab. Forward-looking statements reflect management’s current knowledge, assumptions, judgment and expectations regarding future performance or events. Although management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will prove to be correct and you should be aware that actual results could differ materially from those contained in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties including, but not limited to, the company’s limited cash reserves and its ability to obtain additional capital on acceptable terms, or at all, including the additional capital which will be necessary to complete the clinical trials that the company has initiated or plans to initiate; the potential timing and outcomes of clinical studies of lenzilumab undertaken now or in the future; the ability of the company to timely source adequate supply of its development products from third party manufacturers on whom the company depends; the potential, if any, for future development of any of its present or future products; the company’s ability to successfully progress, partner or complete further development of its programs; the uncertainties inherent in clinical testing; the timing, cost and uncertainty of obtaining regulatory approvals; the company’s ability to protect the company’s intellectual property; competition; changes in the regulatory landscape or the imposition of regulations that affect the company’s products; and other factors listed under “Risk Factors” in the company’s most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 10, 2015, the Annual Report on Form 10-K filed on March 16, 2015, and the company’s other filings with the Securities and Exchange Commission.

 

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this release. The company has no obligation, and expressly disclaims any obligation to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise.

 

For more information, visit http://www.kalobios.com.

 

Contact:

 

Martin Shkreli
KaloBios CEO
1-646-356-5590