It took just a few days, and becoming America's most hated man in the process, for Turing Pharma CEO Martin Shkreli to fold.
The 32 year old "hedge fund manager", who started his career on Wall Street working under Jim Cramer, and who subsequently ended up owing now-defunct Lehman Brothers $2.3 million for a Put option gone bad (only to see Lehman collapse before the now defunct bank could collect), was the object of nationwide scorn, derision and outrage after a NYT profile of his decision to boost the price of a drug by over 5000%. Even Hillary Clinton got involved in the public outrage, first tweeting and then making it a matter of her public policy how as a result of his actions she would implement a $250 price cap on drugs to prevent such price gouging. Earlier today, the Taiwanese Animators took "Big Pharma Douchebag" Shkreli to task with the following clip:
Not surprisingly, following the biggest plunge in biotech stocks in 2015 - many have speculated that the real goal of Shkreli's actions was to profit by shorting the biotech sector ahead of the selling which his action would have unleashed - and an epic public outcry against the diminutive "hedge fund" manager (his prior company Retrophin recently filed a federal lawsuit against Shkreli alleging that he created the biotech and took it public solely to provide stock to MSMB investors when his hedge fund became insolvent; the suit seeks $65 million in damages) NBC reported moments ago that "the pharmaceutical company boss under fire for increasing the price of the drug Daraprim by more than 5,000 percent said Tuesday he will lower the cost of the life-saving medication."
Martin Shkreli did not say what the new price would be, but expected a determination to be made over the next few weeks.
He told NBC News that the decision to lower the price was a reaction to outrage over the increase in the price of the drug from $13.50 to $750 per pill.
Turing Pharmaceuticals of New York bought the drug from Impax Laboratories in August for $55 million and raised the price. Shkreli said Tuesday the price would be lowered to allow the company to break even or make a smaller profit.
He added that his action was "absolutely a reaction — there were mistakes made with respect to helping people understand why we took this action, I think that it makes sense to lower the price in response to the anger that was felt by people." One would not have gotten that impression from reading his tweets over the past 4 days.
In a phone interview with NBC Shkreli said the money from the increase would be used to develop better treatment for toxoplasmosis that have fewer side effects. "It's very easy to see a large drug price increase and say 'Gosh, those people must be gouging.' But when you find out that the company is not really making any money, what does that mean?"
Well, it means it is like 90% of "eyeball" and "biotech" companies out there, that's what it means.
His conclusion: "I think in the society we live in today it's easy to want to villainize people, and obviously we're in an election cycle where this is very, very tough topic for people and it's very sensitive. And I understand the outrage," Shkreli said.
It's even easier to villainize those who deserve it.
But now that Shkreli's 15 minutes of fame are over and his Twitter profile is now in "private" mode (we doubt the SEC will investigate his shorting activity of biotech indices - we are confident the young "hedge funder" will have bigger headaches to deal with soon enough) the attention should shift to the real villains - those truly big pharma companies, who do what Shkreli did but on a far vaster and grander, if less obvious, scale taking advantage of the price cushioning effects that Obamacare provides.
We also are curious to see how Hillary's populist outrage at Shkreli will be explained when the public realizes that it is only thanks to the benefits of socialized insurance programs such as Obamacare, of which Hillary is a staunch supporter, that such price gouging was possible in the first place.