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Martin Shkreli Turing Pharmaceuticals said the company would sell a drug to treat serious infections for less than $750 a tablet, though he did not specify what the new price would be.Credit CNBC

Martin Shkreli is either the boy genius or the bad boy of pharmaceuticals, depending on one’s point of view.

Mr. Shkreli, the boyish-looking 32-year-old founder of two drug companies, has proved to have a sharp eye for finding obscure drugs that might be turned into lucrative moneymakers, rewarding some of his investors.

But after years of attacking drug company executives, he was vilified on social media and became the symbol for price gouging after his company, Turing Pharmaceuticals, raised the price of a 62-year-old drug it had acquired to $750 a pill from $13.50.

While not the first huge overnight price increase for a drug, this one touched a public nerve and intensified calls, including from presidential candidate Hillary Rodham Clinton and lawmakers, for measures to control the rising cost of medicines.

After fiercely defending the price increase in various interviews and on Twitter for two days, Mr. Shkreli backed down a bit late Tuesday. He told television news networks that the price of the drug, Daraprim, would be lowered, though he did not specify what the new price would be.

“I think that it makes sense to lower the price in response to the anger that was felt by people,” he told NBC News. He declined to comment for The New York Times on the pricing announcement, and did not reply to an email request for comment on other matters mentioned in this article. “I think our relationship is over,” he wrote in response to an email seeking comment on Tuesday.

This is not the first time that Mr. Shkreli, a former hedge fund manager with a reputation for outspokenness, has been at the center of a controversy.

While in his 20s, he drew negative attention for urging the Food and Drug Administration not to approve drugs made by companies whose stock he was selling short.

He was among a group of investors ordered by a New York judge to pay $2.3 million to Lehman Brothers to cover a losing bet on the markets in 2007.

Two former employees sued him for not paying their wages, while another former employee accused Mr. Shkreli of taking over his personal email and Facebook accounts and harassing his family through social media.

The board of his first pharmaceutical company accused him of using the company as his personal piggy bank to pay back angry investors in his hedge fund.

While controversial, Mr. Shkreli is also charismatic and whip smart, according to those who know him, able to talk science without having any formal training.

“You give him a science textbook on chemistry, he’d give it back to you in nine months and he’d have it memorized,” said one early investor in Mr. Shkreli’s first drug company, Retrophin. “He’s a sponge for information.”

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Mr. Shkreli has also continued to bet against, or short, biotechnology stocks, even as he has run Retrophin and Turing. He is said to have made millions shorting the stocks of Celladon and Vital Therapies after correctly predicting their products would fail in clinical trials.

But this investor, who spoke on the condition of anonymity because he wanted to retain relations in the industry, added, “There’s nobody there in Martin’s life to tell him what the right thing is.”

Raised in Sheepshead Bay, Brooklyn, the child of immigrants from Albania and Croatia, Mr. Shkreli hit Wall Street at the age of 17.

While attending Baruch College, Mr. Shkreli started working as a clerk at a hedge fund, Cramer, Berkowitz & Company, in 2000. (Jim Cramer, the hedge fund manager and host of CNBC’s Mad Money, retired from his namesake firm that same year.) At one point, Mr. Shkreli recommended the fund short the stock of a biotechnology company, according to an interview last year with Bloomberg Businessweek. The stock fell and the hedge fund made money, prompting an inquiry from regulators about the fund’s well-timed bet. Regulators ultimately found no wrongdoing.

Mr. Shkreli set off to start his own hedge fund, Elea Capital Management, in about 2006, but it soon ran into trouble. In July 2007, Elea, Mr. Shkreli and others were sued by Wall Street investment bank Lehman Brothers for failing to pay for a put option, essentially a bet that the market would fall. When the stock market instead climbed, the fund didn’t pay. A judge issued a $2.3 million default judgment against Mr. Shkreli and the fund.

Still, the hiccup did not slow Mr. Shkreli down. He soon started a new hedge fund, MSMB Capital Management, using his initials and those of his business partner, Marek Biestek. At MSMB, a fund focused on health care, Mr. Shkreli once again plied his trade in short-selling. But rather than simply sell short a company’s shares and hope that eventually the stock would fall, Mr. Shkreli actively campaigned to make things difficult for the drug companies.

In 2011, Mr. Shkreli decided to enter the pharmaceutical industry, raising money from MSMB investors to start Retrophin.

The company looked for older, somewhat obscure drugs that it could acquire and turn into so-called specialty drugs for rare diseases, with substantially higher prices. Retrophin now sells three drugs, and total sales reached $24.1 million in the second quarter of this year.

A former portfolio manager at MSMB who was asked by Mr. Shkreli to focus on investment opportunities for Retrophin said in an affidavit early last year that he and his family were repeatedly harassed on social media by Mr. Shkreli in 2013. The emails and texts were published on Tuesday by the website Gawker.

Mr. Shkreli had terminated the manager, Timothy Pierotti, and accused him in a lawsuit in New York State Supreme Court of buying shares in a company for his own account that netted $3 million in profits that should have been for the fund. In an affidavit, Mr. Pierotti said his Facebook, LinkedIn and personal email accounts had been taken over.

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Mr. Pierotti also accused Mr. Shkreli of sending messages via social media to his wife and his 16-year-old son. When his son asked why Mr. Shkreli had sent him a Facebook friend request, Mr. Shkreli responded, “because I want you to know about your dad ... he betrayed me. He stole $3 million from me.”

The lawsuit was discontinued by both sides a few months later. Mr. Pierotti could not be reached for comment.

The board of Retrophin fired Mr. Shkreli a year ago. In August Retrophin filed a federal lawsuit in New York accusing its former chief executive of breaching his duty of loyalty to the company. It accused Mr. Shkreli of arranging to pay off some angry investors in his hedge fund by having Retrophin enter into consulting agreements with them.

In court filings, Mr. Shkreli’s lawyers asked for an extension in time to respond to the suit. Retrophin has disclosed in regulatory filings that it is cooperating with a federal criminal investigation involving Mr. Shkreli and investors in his previous funds.

After being fired from Retrophin, Mr. Shkreli founded Turing, bringing with him many employees and investors from his former company.

“After being kicked out of my own company, I’ve built a bigger and better one,” he said in an interview last week. He said the lawsuit against him by Retrophin was “a sad attempt to avoid paying a very large severance amount” that he said Retrophin owed him.

Turing announced in August that it had raised $90 million in equity and debt from investors, led by Mr. Shkreli.

An early Retrophin investor, who saw the prospectus for the Turing offering, said it outlined Turing’s plan to acquire Daraprim, a 62-year-old drug used to treat toxoplasmosis, a parasitic infection that can be life-threatening to some babies and people with AIDS and cancer.

As an old drug, Daraprim has no patent protection, but until now sales have been so small that no generic companies have been interested in making it.

Turing paid $55 million to acquire the drug from Impax Laboratories, a deal that made sense only if Turing planned to raise the price of the drug substantially.

A condition of the deal, according to this potential investor, was that Impax remove the drug from regular wholesalers and drugstores, which would make it harder for generic companies to obtain samples needed to develop generic copies. In June, two months before the sale to Turing was announced, Impax switched to tightly controlled distribution.

Once Turing obtained the drug, it quickly raised the price to $750 a tablet from $13.50, drawing protests from infectious disease doctors that ignited the firestorm.

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