Chagas Drug Hope Lifts KaloBios Stock

Shares of KaloBios Pharmctcls (OTC: KBIOQ) climbed as much as 22 percent Thursday after a WSJ report said the embattled pharma company may still get its hand on the drug used to treat Chagas disease.

KaloBios, which filed for bankruptcy in December, was trying to buy the drug when its former chief executive Martin Shkreli was arrested for securities fraud.

In a bankruptcy court filing, Savant Neglected Diseases LLC, which owns the rights for Chagas treatment benznidazole, said the talks are going on and the deal has not been called off.

Chagas disease, also known as American trypanosomiasis, is a potentially life-threatening illness caused by a protozoan parasite. Chagas is mainly vector-borne transmitted to humans by contact with feces of triatomine bugs, known as 'kissing bugs,' and the disease affects the heart, if left untreated.

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It is found mainly in Latin America. However, in the past decades it has been increasingly detected in the U.S., Canada, and many European and some Western Pacific countries. According to World Health Organization (WHO), about 6 million to 7 million people are estimated to be infected worldwide, mostly in Latin America where Chagas disease is endemic.

The cost of treatment for Chagas disease remains substantial. In Colombia alone, the annual cost of medical care for all patients with the disease was estimated to be about $267 million in 2008. Spraying insecticide to control vectors would cost nearly $5 million a year, according to a report from WHO.

Shares of KaloBios were currently up 12 percent at $2.30.