Corporate History
Martin Shkreli incorporated Turing Pharmaceuticals LLC in February 2015 and named it after mathematician Alan Turing. Retrophin's board had fired Shkreli as CEO the previous September after finding that he used company funds and stock to settle debts with defrauded hedge fund investors.
Turing raised $90 million in first-round financing and bought three products from Retrophin for its initial portfolio. The Federal Trade Commission later said that from its creation in fall 2014, the company had looked for "a sole-source drug with a small patient population that it could place into restricted distribution."
The company operated under the Turing name for less than three years. During that time, it drew congressional scrutiny over drug pricing, faced a federal antitrust complaint, and saw its founder barred from the pharmaceutical industry for life.
Business Model
Turing repeated the approach Shkreli had used at Retrophin: buy older drugs with small, captive patient populations, then raise prices. At Retrophin, Thiola, a treatment for the rare kidney condition cystinuria, went from $1.50 per pill to $30. Chenodal, another niche drug, rose about five-fold.
Turing acquired Daraprim (pyrimethamine), a 62-year-old drug used to treat toxoplasmosis, when it bought the US marketing rights from Impax Laboratories on August 10, 2015, for $55 million. In an internal email, Shkreli wrote: "Very good. Nice work as usual. $1bn here we come."
Weeks later, Turing raised the price from $13.50 to $750 per tablet.
Leadership
Shkreli served as CEO from the company's founding until December 17, 2015, when FBI agents arrested him at his Manhattan apartment. The charges were securities fraud and conspiracy tied to his hedge funds, MSMB Capital and MSMB Healthcare, not to Daraprim pricing.
Ron Tilles, the board chairman and an original investor, became interim CEO and stayed in the role through April 2017. Dr. Eliseo Salinas followed for several months. Kevin Mulleady, a longtime Shkreli associate and co-founder of both Retrophin and the rebranded Vyera, became CEO in September 2017.
Shkreli resigned from the board in February 2016 but remained the largest shareholder of the parent company, Phoenixus AG. In June 2017, he placed five close supporters on the Vyera board. The FTC later cited that continued influence in its antitrust complaint.
Rebrand to Vyera Pharmaceuticals
In September 2017, Turing rebranded as Vyera Pharmaceuticals for all US operations under the Swiss-registered parent Phoenixus AG. The move came one month after Shkreli's August 4, 2017, securities fraud conviction, as he reasserted control through board proxies.
The Daraprim price and the closed distribution system stayed in place under the new name.
Regulatory Action and End
On January 27, 2020, the FTC and seven state attorneys general filed an antitrust complaint against Vyera, Phoenixus, Shkreli, and Mulleady. The complaint said Vyera preserved its Daraprim monopoly through restricted distribution and exclusive supply agreements for the raw ingredient. It also said Vyera blocked data that generic manufacturers needed for bioequivalence studies.
Vyera settled in December 2021. Under the settlement, Vyera had to provide Daraprim at no more than $1 per tablet to certain buyers, pay up to $40 million over 10 years, and license the drug to any qualified generic manufacturer. Shkreli was ordered to pay $64.6 million in disgorgement and received a lifetime ban from the pharmaceutical industry. Mulleady received a seven-year industry ban.
In May 2023, Vyera Pharmaceuticals and Phoenixus AG filed for Chapter 11 bankruptcy.
Key Facts
| Item | Detail |
|---|---|
| Founded | February 2015 |
| Founder | Martin Shkreli |
| Named after | Alan Turing |
| Initial financing | $90 million |
| Daraprim acquired | August 10, 2015, for $55 million |
| Shkreli arrested | December 17, 2015 |
| Rebranded | September 2017 as Vyera Pharmaceuticals |
| Parent company | Phoenixus AG (Switzerland) |
| FTC complaint | January 27, 2020 |
| Settlement | December 2021 |
| Bankruptcy | May 2023, Chapter 11 |