Martin Shkreli will not be able to delay paying nearly $25 million he owes from a civil lawsuit that he and his company employed on Daraprim.
Martin Shkreli will not be able to delay paying out nearly $25 million that he owes from a civil lawsuit related to the anticompetitive tactics he and his drug company employed to prevent generic challenges to Daraprim, a toxoplasmosis drug that he acquired and immediately increased the price by 5,000%.
On Thursday, U.S. District Court Judge Denise Cotes denied his request to postpone paying the judgment. Cotes is the same judge who banned Shkreli from future involvement in the pharmaceutical industry in January. Part of that ban included an order to return $64.6 million in profits he and his former company, Vyera Pharmaceuticals, earned from Daraprim profits. In December 2021, Vyera agreed to pay a $40 million fine to settle its part of that judgment, leaving the remaining $24.6 million to be paid by Shkreli.
The civil fine was levied following a complaint filed by the Federal Trade Commission and several states against Vyera in 2020. The judgment settled the allegations of the company’s attempts to prevent generic competition for Daraprim. According to the complaint, the company created an “elaborate anticompetitive scheme to preserve a monopoly” on the toxoplasmosis drug.
The question remains whether or not Shkreli has the funds to pay that fine. According to CNBC, Shkreli noted in a filing with the court that he was willing to put up the remaining interest he owns in stock shares of Phoenixus AG, the parent company of Vyera Pharmaceuticals. He told the judge that there were no other assets he could put up as a bond against the decision. In its report, CNBC noted that Shkreli’s shares in Phoenixus are currently being held in order to satisfy a $2.6 million judgment against Shkreli in an unrelated civil case.
In Thursday’s ruling, Cote denied that request. She said that it is unclear what the market value of Phoenixus AG is, or “even when that value will be determined,” CNBC said. Additionally, the judge raises the question of whether or not the shares of Phoenixus will be sufficient to satisfy the $2.6 million ruling they are currently being held in receivership for.
“Shkreli’s proposed bond is insufficient to ensure that” the plaintiffs will recover all of the judgment they are owed, " Cote wrote.
Shkreli sought to delay the nearly $25 million payment until an appeal could be heard, but the judge denied that.
Shkreli is currently serving the final months of a federal sentence on two charges of securities fraud and one charge of conspiracy to commit conspiracy fraud. He was found guilty of orchestrating three related fraudulent schemes to defraud investors in hedge funds he managed and the pharmaceutical company Retrophin, which he founded. Shkreli is due to be released from prison in November.
One month after Cotes handed down her judgment, Shkreli received a second lifetime ban from the industry. In February, U.S. District Judge Kiyo Matsumoto issued a ban related to the securities fraud charges when he was in charge of Retrophin. Matsumoto called Shkreli a “chaotic, dishonest, and untrustworthy corporate leader” who was likely to violate the law again if he was allowed to return to the industry and run a public company.
