[Corrected, 8/23/19, see below] Retrophin, the drug developer founded by jailed former biotech executive Martin Shkreli, has failed its first big test.
The San Diego-based company’s experimental drug fosmetpantotenate failed a Phase 3 trial, FORT, in patients with a rare and deadly neurological disorder called pantothenate kinase-associated neurodegeneration, or PKAN. The Retrophin (NASDAQ: RTRX) drug flunked all of its main and secondary goals in the study, which tested fosmetpantotenate against a placebo in PKAN patients.
Retrophin didn’t provide specifics; it’ll present the results at a future medical meeting. Shares fell about 30 percent in pre-market trading Thursday morning.
PKAN is a lethal rare genetic disease that affects about 5,000 people worldwide. A buildup of iron in the brain leads to progressive movement problems—issues with balance, speech, involuntary muscle contractions and more—and an early death. The disease is caused by a mutation to the PanK2 gene. That causes the body to make insufficient amounts of a compound called Coenzyme A in cells, which in turn may lead to the accumulation of potentially harmful substances in the brain, like iron. Fosmetpantotenate was meant to restore levels of Coenzyme A. [A previous version of this story referred to iron as a molecule. We regret the error.]
The FORT study is the first of three Phase 3 trials to produce results for Retrophin, the company once founded by Shkreli, who is now serving a jail sentence for financial crimes. Shkreli was ousted from Retrophin in late 2014—shortly after he raised the price of tiopronin, an old drug used to treat conditions related to kidney stones, from $1.50 to $30 apiece.
That would prove to be a harbinger of things to come. Shkreli then led Turing Pharmaceuticals, and hiked the price of pyrimethamine (Daraprim), an off-patent drug often used by people with HIV to ward off parasitic infections, from $13.50 to $750 a pill. He gained national infamy for staunchly defending the price hike, cultivating a “pharma bro” persona and showboating on social media. In 2017, Turing changed its named to Vyera Pharmaceuticals.
Shkreli was later charged with conspiracy for bilking investors in his New York-based hedge funds, MSMB Capital Management and MSMB Healthcare, and looting Retrophin to cover investments gone wrong at MSMB. In 2018 he was given a seven-year sentence. CNBC reported last week that Retrophin paid Shkreli to settle legal claims between the two and certain board members, officially severing ties between him and the company.
Yet Shkreli’s Retrophin legacy lives on. The company’s pipeline is largely due to his efforts. Court papers filed by Shkreli’s attorneys in the legal tussle in May said the company was “continuing to feed off the assets created and acquired by Shkreli.” Among them was fosmetpantotenate, formerly known as RE-024. “The therapeutic concept” of the drug was “uniquely [Shkreli],” court papers read. Shkreli’s name is on the patents for fosmetpantotenate, and the drug’s development led Retrophin to raise cash and move forward. It went public via a reverse merger in 2012.
Still, the PKAN drug was seen as a long-shot, wrote SVB Leerink analyst Joseph Schwartz. Retrophin pushed it into Phase 3 testing after encouraging signs from just four compassionate use cases. “Not surprisingly, investors have been largely cautious on PKAN,” he wrote.
Retrophin has two more chances on the way, however. Sparsentan, which Shkreli licensed from Ligand Pharmaceuticals in 2012, is in the middle of two Phase 3 studies for the rare kidney diseases focal segmental glomerulosclerosis (FSGS) and IgA nephropathy. The first of those studies should produce results in 2021—Retrophin previously expected data next year, but the trial has taken longer to enroll than the company previously thought.
Indeed, fosmetpantotenate’s failure is the latest development in a “volatile” summer for Retrophin, wrote SVB Leerink analyst Schwartz. In July, the company launched tiopronin (Thiola) without a patent, which leaves it vulnerable to generic competition. Earlier this month, the company declined to exercise its option to acquire Censa Pharmaceuticals and ended a collaboration developing that company’s experimental phenylketonuria drug.