Retrophin Soars on FDA Approval of Bile Acid Disorder Drug - Analyst Blog

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Retrophin, Inc.'sRTRX shares shot up 36.65% following the FDA approval of Cholbam (cholic acid) capsules. The company said that Cholbam is the first FDA approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects, and for patients with peroxisomal disorders (including Zellweger spectrum disorders).

Cholam is eligible for seven years market exclusivity in the U.S. as it enjoys orphan drug status. The drug is currently approved in Europe for the treatment of inborn errors in primary bile acid synthesis.

With Cholbam getting approved in the U.S., Retrophin intends to exercise its right to acquire all global rights, titles, and ownership of Cholbam and related assets from Asklepion Pharmaceuticals.

Under the terms of its agreement with Asklepion, Retrophin will make a one-time cash payment of $27 million in addition to approximately 661,278 shares of its common stock (initially valued at $9 million at the time of the agreement), under the assumption that Cholbam will also receive approval for cerebrotendinous xanthomatosis (CTX) indication. Asklepion is also entitled to receive sales milestone payments of up to $37 million, plus tiered royalties on net sales of Cholbam.

According to the company press release, bile acid synthesis disorders due to single enzyme defects affect an estimated 1 in 9 per million live births and peroxisomal disorders are estimated to affect approximately 1 in 50,000 live births.

Meanwhile, Asklepion also received a Rare Pediatric Disease Priority Review Voucher (PPRV) from the FDA. The voucher can be used to obtain priority review for a new drug application or biologics license application submitted later. The voucher can also be sold or transferred. As per the original terms of the above mentioned agreement, Retrophin will gain rights to the PPRV voucher.

Apart from Asklepion, quite a few other health care companies have recently received PPRV vouchers including United Therapeutics Corp. UTHR for the treatment of neuroblastoma.

Investors interested in the health care sector could consider companies like Cytokinetics Inc. CYTK and Lannett Company, Inc. LCI , both carrying a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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