Martin Shkreli Probed for Allegedly Running His Company from Prison

Christian Fiksdal

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While Martin “Pharma Bro” Shkreli has been imprisoned for securities fraud since September 2017, it appears he’s still running his business behind bars. From a top bunk in a 12-person prison cell in Fort Dix, N.J., the disgraced pharmaceutical executive is at work on a big second act.

Wielding little more than a contraband smartphone, Martin Shkreli remains the invisible hand at Phoenixus AG. His drug company, renamed from Turing Pharmaceuticals, became a national lightning rod for jacking up the prices of an extremely rare drug named Daraprim back in 2015. 

At the end of this past September, Phoenixus had $37.7 million of cash. According to the company’s private third-quarter financial statement, it reported $48.3 million of sales for the year to date, with a $10.3 million net loss after operating expenses. It included $9.4 million spent on unspecified “research and development,”. It’s unclear as to who is the chief executive of the firm, as Shkreli is now incommunicado.  

While in detention, Shkreli reads about research into fatty acids and the prevention of cardiovascular disease in the inmate computer lab or on his phone. According to sources, he has made prison friends, including “Krispy” and “D-Block,” some of whom affectionately call him “Asshole”. 

Shkreli’s continued involvement with Phoenixus AG has proven to be riskier than originally thought. The prison inmate handbook says: “Conducting a business, in any way, is a prohibited act.” There have been official investigations by the FBI, and Shkreli has been placed in a “Special Housing Unit”, otherwise known as solitary confinement, as of April 2nd.  

However, he plans to emerge from jail richer than he entered. Rough calculations indicate that Phoenixus could be worth $3.7 billion by his liberation in 2023. Just like with his previous company Retrophin, his plan involves acquiring more rare drugs in various stages of development and allocating resources into research-and-development. Shkreli has abandoned the strategy that led to his explosion into the limelight in 2015 when Turing raised the cost of an HIV drug from $13.50 to $750 per pill.

Overnight, he became a sensation, fueled by colorful and what even he later admitted were inappropriate, public comments. The public attention encouraged authorities to prioritize a closer look at his broader business history, and that resulted in Shkreli’s December 2015 arrest for securities fraud and conspiracy. He resigned as Turing’s chief executive a few days after the arrest.

Shkreli repeatedly said he would avoid incarceration altogether on his YouTube streaming sessions. Before the trial, he wrote out a spreadsheet of comparable white-collar offenses that drew limited sentences. A judge remanded him immediately in September 2017 after Shkreli, then out on bail after his conviction, offered $5,000 to any stranger who would grab a strand of Hillary Clinton’s hair to disrupt her book tour. According to the Wall Street Journal, the judge called it a “solicitation to assault in exchange for money.” The same judge in March 2018 sentenced him to seven years in prison on the conspiracy and securities-fraud conviction.

From prison, Shkreli phoned in advice to company officials when he could. However, he hasn’t always been plugged in. According to Christie Smythe, an author writing a book about the convict, he has gained weight and plans to begin a weightlifting program, He can now do 15 push-ups in a row.