Orphan drug biotech Retrophin ($RTRX) is the new owner of an FDA-approved rare disease treatment and a potentially lucrative voucher for a future speedy review thanks to a $75 million buyout agreement.
Baltimore's Asklepion Pharmaceuticals won approval for Cholbam, a treatment for a rare group of bile acid synthesis and peroxisomal disorders. And, under a January agreement, Retrophin has exercised its rights to acquire the company, handing over $27 million in cash and 661,278 shares with the promise of $37 million more tied to sales milestones. The news sent Retrophin's stock price up about 30% on Wednesday, so those shares, valued at $9 million when the deal was signed, are now worth north of $12.5 million, boosting the overall deal value above $75 million in total.
Alongside Cholbam, Retrophin also gets a Rare Pediatric Disease Priority Review Voucher, which the FDA granted Askelpion in tandem with the approval. The voucher guarantees its user a 6-month agency review, cutting short the standard 10-month process, and can be sold to the highest bidder. Gilead Sciences ($GILD) paid $125 million for one last year, and Sanofi ($SNY) and Regeneron ($REGN) owe their first-mover status in a new field of cholesterol drugs to the $67.5 million they spent on a voucher months earlier. Retrophin hasn't disclosed its plans for the one it just picked up.
For Retrophin, the acquisition adds a third marketable asset to its stable of treatments for orphan diseases, following through on its strategy of buying up drugs it believes are underutilized. Cholbam is cleared to treat children and adults who lack the enzymes they need to manufacture its main ingredient, cholic acid. Without it, bile flow stagnates, leading to dangerous accumulation that can damage the liver.
"With FDA approval, Cholbam will be available to patients suffering from several life-threatening diseases that until now, had no approved treatment," Retrophin CEO Stephen Aselage said in a statement.
Meanwhile, the biotech is moving on from a public squabble with Martin Shkreli, its founder and former CEO. Retrophin's board ousted Shkreli last year, quietly moving on and selling a few assets to the 31-year-old former hedge fund manager and his new venture, Turing Pharmaceuticals.
- read the FDA's release
- here's Retrophin's statement