The trial of Martin Shkreli, the pharmaceutical executive charged with securities fraud, starts on June 26. He infamously raised the price of a life-saving drug for AIDS and cancer patients from $13.50 to $750, bought an exclusive Wu-Tang Clan record for $2m, and then publicly feuded with a member of the rap group.
Just in time for his trial, a theatre in New York has started showing PharmaBro: An American Douchical!. FT Alphaville correspondent Alexandra Scaggs attended the play’s opening last week and discusses it on the blog. We review the facts of the case below, with the help of the lyrics — as a warning, they do contain a notable amount of profanity.
He founded two multimillion-dollar companies?
Shkreli founded Retrophin in 2011 and took it public a year later. Its market cap is around $674m, and revenues last year were $138m. That checks out! (He eventually got the boot from its board, though.)
It is tough to figure out what his second company, Turing Pharmaceuticals, is worth right now. It is private and has not released results since September 2015, when it had a net loss of $14.6m.
He took a really small hedge fund and turned it into a slightly bigger hedge fund.
Not exactly. Complaints from the SEC and DoJ say he started a really small hedge fund, very briefly turned it into a slightly bigger hedge fund, and then turned it into a nonexistent hedge fund by losing all of his investors’ money.
Then, the complaints say, he started a second hedge fund, and used that money to pay investors in his first hedge fund. He also allegedly compensated his hedge fund investors through phony consulting agreements with Retrophin LLC. It is complicated.
He's 32 and worth $100mil, he's living the American Dream!
He might have been worth that much when he bought the Wu-Tang album, but probably not anymore. After his arrest, Shkreli posted bail with $45m in an E*Trade account, via Fortune. But it was mostly invested in KaloBios Pharmaceuticals, and he lost $40m when it went bankrupt, Reuters later reported.
He jacked the price of that cancer pill. He's . . . oh, that's who Martin Shkreli is.
The pill in question is Daraprim, which helps treat a parasitic infection that is especially risky in cancer and AIDS patients. It is still owned by Turing Pharmaceuticals.
I'll buy that album by the Wu-Tang Clan... I'm filthy rich. I do whatever the f--- I want to do.
Shortly before his 2015 arrest, Shkreli spent $2m on the only known copy of the Wu-Tang Clan’s album “The Wu — Once Upon a Time in Shaolin”. He’s banned from releasing it to the public for 88 years. Still, he played a few tracks on his YouTube livestream after Donald Trump was elected president, as he had previously promised.
You really thought you could outsmart me? No one can outsmart me! Do you know how many investors I’ve f----- over through securities fraud?
There were at least 22, according to the complaints: Nine at the first hedge fund, and 13 at the second. You can add the total number of Retrophin shareholders to that figure, if you really want. The investors who had consulting agreements with Retrophin did allegedly get paid, but it seems sensible to conclude that being dragged into FBI and SEC investigations counts as getting screwed over, too.
Fabricated portfolio statements
The SEC and DoJ say Shkreli told investors he was outperforming, when in reality he had lost almost all of their money. He also allegedly lied to potential investors about his assets under management and about hiring an auditor.
Backdated investment records . . . Manufactured a phony loan agreement — and bam! Millions! This is nothing compared to that!
Shkreli is accused of taking his second hedge fund’s $900,000 equity investment in Retrophin and changing it into a loan using a backdated promissory note.
I'm the richest damn Albanian to walk this earth!
He might have been the richest Albanian at one point, according to a 2015 report from Fortune. Albanian-American Ferid Murad won a Nobel, but apparently his net worth is not as high as Shkreli’s was. After that $40m loss, however, it is anyone’s guess.
I'm Martin f***in' Shkreli!
This is only partially correct. The actor is playing Martin Shkreli, but he is not actually Martin Shkreli.