The 5,000% price hike that made Martin Shkreli infamous is no longer paying off

Martin Shkreli’s former pharmaceutical company lost more than $1 million in the first quarter of 2018 amid waning sales of the drug made famous by Shkreli’s more than 5,000-percent price increase. That’s according to financial documents recently reviewed by Stat.

Vyera Pharmaceuticals, formerly known as Turing Pharmaceuticals, had brazenly maintained Shkreli’s despised price hike of the drug Daraprim, which treats relatively rare parasitic infections that often strike babies and HIV/AIDS patients.

As founder and CEO of Turing, Shkreli bought the rights to the cheap, off-patent drug and—without any generic competitors—abruptly raised its price from $13.50 a pill to $750 a pill in the fall of 2015.

The move was wildly unpopular (to say the least) and attracted intense public scrutiny to the country’s quickly escalating drug costs. But it was a lucrative decision for Turing and later Vyera—at least until recently.

Shkreli claimed that Turing would rake in hundreds of millions of dollars from the price hike and use the money to fund the development of new, better drugs. And financial documents indicate that the pricing did indeed bring a short-term windfall. But the documents also revealed that high expenses began cutting into profits in 2016 and 2017. At the same time, sales of Daraprim began slipping. The company’s revenue, largely driven by Daraprim sales, fell nearly 15 percent between 2016 and 2017, from $78.5 million to $67 million. The figures are projected to slip another seven percent this year.

Former employees who spoke to Stat on the condition of anonymity blamed the losses on the fact that Daraprim treats uncommon infections that are becoming less common—as well as the backlash to the pricing scandal. The result is that the company has had to lay off at least a handful of salespeople and lost $1.2 million in the first quarter of 2018.

Vyera did not immediately respond to Ars’ request for comment or to the question of whether it was considering undoing Daraprim’s unpopular pricing.

Though Vyera has seen Shkreli’s profit-driving plan to its end, Shkreli is long gone from the company. He stepped down from Vyera when it was still called Turing in December of 2015 after being indicted on securities and wire fraud charges related to an alleged Ponzi-like scheme involving two hedge funds he previously managed as well as another pharmaceutical company, Retrophin. He was convicted on three counts in March of this year and was sentenced to seven years in prison, which he is now serving.

Turing, meanwhile changed its name and tried to distance itself from Shkreli—without lowering Daraprim’s price. In light of the dwindling profits, the company is reportedly considering changing its name once again, this time to “Phoenixus.” The name is a mash-up of phoenix, a mythical bird that regenerates and arises from the ashes of its predecessor, and nixus, a Latin word related to struggle or strain.

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