Retrophin slips on liver woes in rare disease drug's first trial

Retrophin ($RTRX), the biotech venture of former hedge fund manager Martin Shkreli, startled investors Friday morning when it revealed that elevated levels of liver enzymes briefly derailed a study of its rare disease candidate, sending the company's shares down more than 8%.

Last month, the company dosed its first patient with RE-024, a treatment for a neurodegenerative disorder that affects between 1 and 3 per million people. After two weeks, that patient developed "a modest elevation of liver enzymes," Retrophin said, leading the company to discontinue treatment. Six days later, however, the patient had trended back toward liver health, and Retrophin re-started treatment at a reduced dose, keeping up treatment through this week with no meaningful elevation in liver enzymes, the company said.

The drug, designed to treat pantothenate kinase-associated neurodegeneration (PKAN), is among the biotech's fleet of rare disease treatments it believes can bring in between $60 million and $70 million in 2015. Retrophin has watched its share price soar since jumping onto the Nasdaq in January, buoyed by a constant stream of acquisitions for rare ailments like cerebrotendinous xanthomatosis, cystinuria and infantile spasms.

The brief pause in RE-024's clinical development is Retrophin's first blemish of 2014, and the swift Wall Street reaction could signal a fair amount of skepticism among investors. The biotech, naturally, was quick to downplay any fears.

"The company does not believe data on a single patient can be interpreted in a meaningful fashion and is releasing this data to accommodate investor requests," Retrophin said in its disclosure. "Further, the results are inconclusive at this time with regard to RE-024's ability to treat patients that suffer from PKAN. Potential investors should not place undue reliance on this single-patient data."

- read the filing