Things really boiled over here last fall when I wrote about Retrophin, their business strategy, and their CEO, Martin Shkreli. That one ended up with a bizarre encounter with Shkreli in real time on Reddit, and to me getting briefly thrown off of that site entirely. Not long afterwards, Shkreli himself was ousted by his own board at Retrophin, and went on to form a new company, Turing Pharmaceuticals.
But the noise has not died down at Retrophin. Two days ago, the company filed suit against Shkreli, alleging financial improprieties. It’s quite a story, and if any of it is true, then Shkreli himself is in for a hard time of it. The suit claims that he and his investment fund made a “disastrous” investment in Orexigen in 2011 (there have been opportunities since then to do that), and that he did not disclose this to investors, but instead engaged in a bunch of complex maneuvers to try to (1) pay off his investors in Retrophin stock and (2) use Retrophin in general as a personal piggy bank.
None of this has been proven in court, of course, and we’ll have to wait and see what becomes of this case. I for one am laying in a stock of popcorn and cold beverages against the time it actually goes to trial. Meanwhile, Turing (the new Shkreli company) just completed a financing round last week, under somewhat unusual conditions. The company seems to have the same (dishonorable) business model as Retrophin – identify obscure drugs from small suppliers, take them over and ram up the price – but Shkreli himself took to his Twitter account recently (where he’s had some adventures before) to promote Turing’s plan to pay its inventors direct royalties.
That’s a tricky topic in itself (see here for a discussion, with many interesting comments). In general, this is one of those ideas that sounds good (and could perhaps be good in practice), but has many unintended consequences. The biggest one is that idea-generation tends to shut down amount colleagues, because everyone is closely guarding their own inventorship status, and can become fearful of giving someone else a chance to get on the patent and dilute the revenue stream. That’s not a recipe for scientific progress, overall, and if you’re going to institute direct patent-based rewards, you’re going to have to look out for this effect.
But we don’t even know what Turing is up to yet. And whatever it is may be infuriating, or incomprehensible, or land everyone in court again (who knows), but at least it won’t be dull.