Page 8 - Martin Shkreli Teaching Guide

in the financial crash of 2008 thereby avoiding paying

$2.3m. Even if the action had gone ahead it is still

questionable whether he would or could have paid or

filed for bankruptcy.

In late 2012, Shkreli took Retrophin public through a

“reverse merger,” This entailed merging into an existing

publicly traded shell company. Costs of attaining a public

quotation are avoided but access to the investing public

is obtained. Such deals are so notoriously sleazy that the

S.E.C. has issued a bulletin warning investors to stay

away from them.

Syprine, which, he tells me, had about $200,000 in sales

per month in the fall of 2012, but now has sales of $10

million a month, an increase that is due purely to price

increases by Valeant. Cuprimine is a similar story. In

other words, Valeant did exactly what Shkreli was hoping

to do.

Introduction

1: Shkreli’s actions are the main focus of the case

study. Shkreli’s actions of acquiring pharmaceutical

companies and the means by which he did this

provide the context of the discussion. Raising the

price of Daraprim by over 5000% is on the face of it