The notorious pharmaceutical company responsible for Martin Shkreli’s outrageous 4,000 percent price hike, now known as Vyera Pharmaceuticals, has filed for bankruptcy. The company plans to sell its assets to pay off millions in debts. In court documents filed this week, Vyera’s chief restructuring officer, Lawrence Perkins, largely blamed Shkreli for the company’s downfall. Perkins wrote in an affidavit that “Shkreli’s actions have caused serious reputational harm to [the companies] and have hampered [their] ability to, among other things, open certain bank accounts, successfully commercialize new products, and either raise capital or consummate the sale of various [company] assets.”
Shkreli founded Vyera in 2014 under the name Turing Pharmaceuticals, with the goal of acquiring sole-source drugs that treat life-threatening conditions in small populations of patients and then dramatically increasing the price. In August 2015, he did just that, buying the rights to the decades-old anti-parasitic drug Daraprim for $55 million and abruptly raising the price from $17.60 per tablet to $750, a more than 4,000 percent increase. He protected the price hike with several allegedly anti-competitive measures, including blocking generic competitors from obtaining the active ingredient, pyrimethamine, which they needed to obtain regulatory certification and enter the market.
Shkreli’s scheme was only somewhat disrupted when he was indicted on securities fraud charges in December 2015. He was convicted in 2017 and sentenced to seven years in prison but kept directing the Daraprim work at Turing from behind bars using a contraband cell phone. Shkreli’s influence wasn’t shaken until January 2020, when the Federal Trade Commission and several state attorneys general sued Shkreli and the company—then called Vyera—for allegedly violating antitrust laws. Soon after, Vyera appointed a new board and management to purge ties to Shkreli. Vyera later settled the FTC’s lawsuit, while Shkreli insisted on going to trial, where he lost, was banned from the pharmaceutical industry for life, and ordered to pay roughly $65 million in disgorgement. He is appealing the ruling.
Meanwhile, Vyera never reversed Shkreli’s price hike. From 2016 to 2019, the company grossed between $55 million and $74 million from Daraprim, which brought in average net prices of between $228.00 and $305.00 per tablet after rebates and coupons. Starting in 2020, several generics hit the market—which still go for hundreds of dollars a tablet after coupons—cutting into Vyera’s profits. The company’s net sales reached just $21.2 million in 2021 and $9.5 million in 2022. So far in 2023, the net sales reached just $1.35 million, and Vyera reports a net income loss of $6.3 million.
The company’s “current cash balances are insufficient to fund the operations of [the companies] and pay liquidated and unliquidated claims against them,” Perkins told the bankruptcy court. On top of that, the company also faces several lawsuits. It’s a sad end for a company that was built on greed and unethical practices.
On October 4th, 2020, the pharmaceutical company Vyera, founded in 2014 by notorious pharmaceutical executive and investor Martin Shkreli, filed for bankruptcy.
Vyera, formerly known as Turing Pharmaceuticals, has been mired in controversy since Shkreli substantially raised the price of a drug, Daraprim, to treat a rare but life-threatening infection. The move, which was seen as a blatant attempt to exploit ill patients in order to maximize profits, drew widespread condemnation from the public and federal regulators.
Now, just six years later, Vyera has gone bankrupt due to mounting debt, claiming that Shkreli’s “erratic behavior” is to blame. The company is estimated to have nearly $40 million in debt due to legal costs and fines incurred by Shkreli’s previous activities. Despite this, Vyera is still hoping to raise capital as part of its bankruptcy proceedings.
Despite the bankruptcy filing, Shkreli maintains that his activities at Vyera did not contribute to the company’s current state. He claims that his investment “has led to an increase in potential value of the company,” and denies any liability, saying that he was awaiting the resolution of a previous Federal Trade Commission (FTC) investigation into his pricing practices.
With the bankruptcy filing, the future of Vyera is uncertain. Many observers hope that Vyera will use the opportunity to make amends to those it has wronged in the past and to start anew. In the meantime, the company has been forced to let go of numerous employees, and will need to figure out how to proceed without the financial support of its former leader.
All eyes are now on the FTC to decide how to proceed, and to determine whether Shkreli himself will be held accountable for the company’s downfall. Regardless of what happens, Vyera’s bankruptcy filing stands as a stark reminder of the consequences of corporate greed.
