Two KaloBios directors quit following Shkreli's indictment

By Nate Raymond

NEW YORK (Reuters) - KaloBios Pharmaceuticals Inc said on Monday that two directors had resigned in the wake of the arrest of former CEO Martin Shkreli on securities fraud charges earlier this month.

Tom Fernandez and Marek Biestek resigned from the KaloBios board on Sunday, the company said a regulatory filing. The departures came more than a week after the company fired Shkreli, who had also been CEO of Turing Pharmaceuticals Inc prior to his indictment.

Both men had previously worked with Shkreli, initially at his hedge fund MSMB Capital, which he co-founded with Biestek. Fernandez also worked at drugmaker Retrophin Inc, a drug company Shkreli previously headed before running Turing.

Both MSMB and Retrophin are at the center of an indictment in federal court in Brooklyn, New York unveiled on Dec. 17 against Shkreli.

Prosecutors said Shkreli engaged in a Ponzi-like scheme, defrauding hedge fund investors and then misappropriating $11 million in assets from Retrophin to repay them.

Shkreli, 32, has pleaded not guilty, and on Twitter has called the allegations "baseless and without merit."

He had previously gained notoriety when, as Turing's CEO, he raised the price of a drug used to treat a dangerous parasitic infection to $750 from $13.50.

Neither Fernandez nor Biestek have been charged.

Biestek did not respond to an email seeking comment, and attempts to reach Ferndandez were not successful. KaloBios did not respond to calls seeking comment.

KaloBios named Shkreli as its CEO on Nov. 20, after Shkreli and a consortium of investors bought about 70 percent of the company's shares.

Following his arrest, KaloBios announced on Dec. 21 that it fired Shkreli, who had already stepped down as Turing's CEO.

KaloBios that day also announced the resignation of another director, Tony Chase, who was appointed to the company's board along with Shkreli.

KaloBios on last Wednesday said it had been notified by Nasdaq that its stock would be delisted.