Arrested biotech CEO about to lose $27M

Matt Krantz | USA TODAY

Show Caption Hide Caption Martin Shkreli charged with securities fraud Martin Shkreli, a pharmaceutical industry entrepreneur previously criticized for raising the price of life-saving drugs, was arrested early Thursday in New York City.

Martin Shkreli, the just-arrested CEO of KaloBios Pharmaceuticals (KBIO) as well as Turing Pharmaceuticals, is about to suffer the worst insult: Losing millions.

The 32-year-old biotech CEO, who sparked outrage by jacking up the prices on life-saving drugs, was arrested Thursday on securities fraud charges. But the stock market is about to deliver the ultimate justice - a massive decline in the value of his stock to the tune of $27 million.

Shares of KaloBios, which trade on the Nasdaq by the symbol KBIO, lost half their value to $11.03 a share just before being halted, according to trading data from TD Ameritrade. That's a massive blow to Shkreli, who owns more than 2 million shares, or about half of the company, says S&P Capital IQ. If shares reopen at the price they were trading prior to the halt, Shkreli is looking at a $26.1 million loss on just that investment. Shkreli actually was buying additional shares of the company in the weeks leading up to his arrest.

But that's not all. Shkreli also owns 1.8 million shares of Retrophin (RTRX), the publicly traded biotech which is at the center of the allegations of fraud. Shares are down 2% - adding another $723,719 in losses. Shkreli had been CEO and president of Retrophin starting in 2012 through 2014.

It will certainly take time for legal justice to be served. But on Wall Street - justice is swift and exacting.

SHKRELI'S POSITIONS IN PUBLIC COMPANIES

Company, Symbol, Shares held, Thursday $ loss

KaloBios Pharmaceuticals, KBIO, 2,075,200, -$26,064,512*

Retrophin, RTRX, 1,765,168, -$723,719

Source: S&P Capital IQ, USA TODAY, TD Ameritrade

* Based on price before halt

Follow Matt Krantz on Twitter @mattkrantz