----

----

----

|  | ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--|---------|---------------------------------------------------------------------------------------------------|

|  | ☐ | TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934 |
|--|---------|-----------------------------------------------------------------------------------|

----

----

| Delaware                        |   | 77-0557236          |
|---------------------------------|--------|---------------------|
| (State or other jurisdiction of |   | (IRS Employer       |
| incorporation)                  |   | Identification No.) |

----

| Large accelerated filer  ☐                                             |   | Accelerated filer ☐                    |
|----------------------------------------------------------------------------------------|--------|----------------------------------------------|
|                                                                                   |   |                                         |
| Non-accelerated filer  ☐ (Do not check if a smaller reporting company) |   | Smaller reporting company  ☒ |

----

----

----

|                    |   | KALOBIOS PHARMACEUTICALS, INC. |
|-------------------------|--------|-------------------------------------|
|                    |   |                                |   |
| Date: December 30, 2016 |   | By:                                 |   /s/ Cameron Durrant |
|                    |   |                                | Cameron Durrant |
|                    |   |                                | Chief Executive Officer |
|                    |   |                                | (Principal Executive Officer) |
|                    |   |                                |   |
|                    |   |                                |   |
| Date: December 30, 2016 |   | By:                                 | /s/ David L. Tousley |
|                    |   |                                | David L. Tousley |
|                    |   |                                | Interim Chief Financial Officer |
|                    |   |                                | (Principal Financial and Accounting Officer) |

----

| Exhibit No. |   | Description                                                                                                                                                                                                                                                                                                                                                      |
|------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 2.1              |   | Findings of Fact, Conclusions of Law, and Order Confirming Second Amended Chapter 11 Plan of Reorganization of the Registrant (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on June 22, 2016).                                                                                      |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 3.1              |   | Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on July 6, 2016).                                                                                                                                                 |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 4.1†#      |   | Common Stock Purchase Warrant, dated June 30, 2016, between the Registrant and Savant Neglected Diseases, LLC.                                                                                                                                                                                                                                                   |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 10.1             |   | Debtor in Possession Credit and Security Agreement, dated as of April 1, 2016, by and among the Registrant, Black Horse Capital Master Fund Ltd., Black Horse Capital LP, Cheval Holdings, Ltd. and Nomis Bay LTD (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on April 7, 2016). |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 10.2             |   | Intellectual Property Security Agreement, dated April 1, 2016, by the Registrant in favor of Black Horse Capital Master Fund Ltd., as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on April 7, 2016).                                                        |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 10.3             |   | Debtor In Possession Term Loan Note, dated April 1, 2016, by the Registrant in favor of Black Horse Capital Master Fund Ltd. (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on April 7, 2016).                                                                                      |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 10.4             |   | Debtor In Possession Term Loan Note, dated April 1, 2016, by the Registrant in favor of Black Horse Capital LP (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on April 7, 2016).                                                                                                    |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 10.5             |   | Debtor In Possession Term Loan Note, dated April 1, 2016, by the Registrant in favor of Cheval Holdings, Ltd. (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on April 7, 2016).                                                                                                     |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 10.6             |   | Debtor In Possession Term Loan Note, dated April 1, 2016, by the Registrant in favor of Nomis Bay LTD (incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on April 7, 2016).                                                                                                             |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 10.7             |   | Securities Purchase Agreement, dated as of April 1, 2016, by and among the Registrant, Black Horse Capital Master Fund Ltd., Black Horse Capital LP, Cheval Holdings, Ltd. and Nomis Bay LTD (incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on April 7, 2016).                      |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 10.8             |   | Corporate Governance Agreement, dated as of June 29, 2016, between the Registrant and Martin Shkreli (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-035798) filed on July 6, 2016).                                                                                                               |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 10.9†      |   | Agreement for the Manufacture, Development and Commercialization of Benznidazole for Human Use, dated as of June 30, 2016, between the Registrant and Savant Neglected Diseases, LLC.                                                                                                                                                                            |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 31.1             |   | Certification of Chief Executive Officer of the Registrant, as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                               |
|             |   |                                                                                                                                                                                                                                                                                                                                                             |
| 31.2             |   | Certification of Interim Chief Financial Officer of the Registrant, as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                       |

----

| 32.1**#  |   | Certification by the Chief Executive Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18 of the United States Code (18 U.S.C. §1350).         |
|----------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |   |                                                                                                                                                                                                                        |
| 32.2**#  |   | Certification by the Interim Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18 of the United States Code (18 U.S.C. §1350). |
|     |   |                                                                                                                                                                                                                        |
| 101.INS# |   | XBRL Instance Document                                                                                                                                                                                                      |
|     |   |                                                                                                                                                                                                                        |
| 101.SCH# |   | XBRL Taxonomy Extension Schema Document                                                                                                                                                                                     |
|     |   |                                                                                                                                                                                                                        |
| 101.CAL# |   | XBRL Taxonomy Extension Calculation Linkbase Document                                                                                                                                                                       |
|     |   |                                                                                                                                                                                                                        |
| 101.DEF# |   | XBRL Taxonomy Extension Definition Linkbase Document                                                                                                                                                                        |
|     |   |                                                                                                                                                                                                                        |
| 101.LAB# |   | XBRL Taxonomy Extension Label Linkbase Document                                                                                                                                                                             |
|     |   |                                                                                                                                                                                                                        |
| 101.PRE# |   | XBRL Taxonomy Extension Presentation Linkbase Document                                                                                                                                                                      |

| † |   | Confidential Treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.                                                                                                                                                                                                                                                                                                                                           |
|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| #       |   | Previously filed or furnished, as applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **      |   | The Certifications attached as Exhibits 32.1 and 32.2 that accompanies the Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of KaloBios Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing. |

----