Sanofi splurges $245M on Retrophin's speedy-review voucher

Orphan drug outfit Retrophin ($RTRX) pulled off a quite a quick return on its latest investment. In March, the company paid about $75 million to pick up a small drugmaker, a just-approved product and a voucher promising its holder a quick trip through the FDA review process. Now the San Diego-headquartered biotech is selling that coupon to Sanofi ($SNY) in a $245 million deal, affirming the escalating value of a speedy approval.

Under the agreement, Sanofi will pay Retrophin $150 million up front in exchange for the biotech's Rare Pediatric Disease Priority Review Voucher, handing over installments of $47.5 million in 2016 and 2017. The voucher, awarded to developers of treatments for rare childhood disorders, guarantees its user a 6-month FDA review, cutting short the standard 10-month process.

The voucher program is designed to incentivize R&D in rare and neglected diseases by giving companies a desirable asset that can be sold to the highest bidder. And Retrophin's sale, the third in the program's history, fetched by far the highest price tag. Gilead Sciences ($GILD) bought a voucher for $125 million last year, and Sanofi and Regeneron ($REGN) owe their first-mover status in a new field of cholesterol drugs to the $67.5 million they spent on one months earlier.

Sanofi hasn't disclosed just what it plans to do with the Retrophin voucher, saying in statement that "with 13 medicines in our late-stage development portfolio, this voucher can help us more quickly deliver a new medicine or treatment to those who need it most."

Retrophin, founded and formerly run by hedge fund manager Martin Shkreli, picked up the voucher in its acquisition of Asklepion Pharmaceuticals in March. At the center of that deal was Cholbam, a treatment for a rare group of bile acid synthesis and peroxisomal disorders that won approval the same month. The drug 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.

The company is moving on from a public spat with Shkreli that ended in his ouster last year. Retrophin's business is devoted to buying up marketable assets it believes are undervalued or underutilized, and the biotech markets three treatments for rare or catastrophic diseases.

- read the announcement