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In a bizarre collision between the world of punk music and the pharmaceutical industry, Collect Records, a small Brooklyn label, has decided to sever ties with a silent investor, Martin Shkreli, after an uproar over a drug company he founded.

Mr. Shkreli’s Turing Pharmaceuticals faced a sizable backlash this week on social media and beyond after The New York Times reported that the company had raised the price of Daraprim, a 62-year-old drug used to treat infections in some AIDS and cancer patients, to $750 a pill from $13.50 after acquiring the drug.

Mr. Shkreli was accused of price gouging, and drew rebukes from the presidential candidates Hillary Rodham Clinton and Senator Bernie Sanders. On Tuesday, Mr. Shkreli agreed to lower the price of the medication, though he did not confirm a new price.

Geoff Rickly, the founder of Collect Records, said in a statement on Wednesday that the label and its artists “have agreed to fully sever our relationship with Martin Shkreli, effective immediately.” He added, “Never in a million years did any of us expect to wake up to the news of the scandal that he is now involved in. It blindsided and upset us on every level.”

In an interview from a concert in Germany, Mr. Rickly, who is best known as the former frontman for the emo band Thursday, said he met Mr. Shkreli, a fan and former hedge fund manager, when the businessman paid $10,000 for a guitar he had used to write the Thursday album “Full Collapse,” from 2001.

Mr. Shkreli offered to be a “patron,” Mr. Rickly said. At the time, “I was just a mess,” he added. “He picked me up and gave me a purpose. He changed my life.”

Mr. Rickly said Mr. Shkreli offered to fund his fledgling label, agreeing to a minority ownership stake just under 50 percent. Mr. Shkreli invested “somewhere around a million dollars — $600,000 last time I checked,” according to Mr. Rickly. “He always just said take it as an endowment for the arts.”

Mr. Shkreli said in an interview that he did not make any profit from his investment in Collect. “All I did was put money in,” he said. “I want to be a patron for musicians I really respect and that have a hard time making ends meet.”

Of the choice to remove him from the business, Mr. Shkreli said, “I don’t like it — I want to be involved in all this — but I respect their decision.” He added, “They can move forward from here. I kickstarted the company. I’m not the kind of guy that takes back a — if they can find a new investor, great, if they go out of business then it is what it is.”

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Mr. Rickly said he was aware of Mr. Shkreli’s past business dealings, which included controversial investments and lawsuits from former employees, at the time of their partnership. “Of course I Googled him,” Mr. Rickly said. “I had apprehensions and I talked to him about it. He has a cavalier attitude about things. At the time, one on one, it was soothing, but in public now it comes across as borderline sociopathic.”

“You take any capitalist money and you never know. It’s a dirty system and usually people do something questionable things,” Mr. Rickly added.

Mr. Rickly said he had hoped to use the money to fund struggling artists. “At the very worst, if Martin was a bad guy, then you’re taking his terrible money and giving it to artists who never get any,” he said. “I wanted to make something great out of it — the stupid Robin Hood narrative that everybody knows.”

But as the controversy surrounding Mr. Shkreli grew, egged on by his combative responses online, acts signed to Collect said they were unaware of the investments and urged Mr. Rickly to cut ties. At least three Collect bands — Nothing, Wax Idols and Sick Feeling — released statements saying that while they supported Mr. Rickly, they would not continue to work with the label if Mr. Shkreli was involved.

Mr. Rickly said losing Mr. Shkreli’s financial support might result in the label’s closing. “This is going to end the career of the record label, no doubt,” he said. “If I were a band on the label I would be having a serious crisis of faith right now. The amount of money I have in the bank doesn’t cover my outstanding invoices. It’s devastating.”