Retrophin raises $25m to fund new deal, advance pipeline
This article was originally published in Scrip
Orphan disease-focused pharmaceutical company Retrophin raised $25 million from a private placement of stock and warrants to fund its obligations under a new licensing agreement and to advance its lead drug candidate RE-021 and other programs.
New York-based Retrophin issued 5.6 million shares and granted warrants to buy 2.8 million shares for $6 each to institutional investors involved in the private placement. The financial transaction was disclosed on 16 August alongside a vague announcement that the firm signed an exclusive agreement with "a major pharmaceutical company" to negotiate a license agreement for the pharma player's product candidate to treat autism and schizophrenia.
Retrophin's stock price soared following the simultaneous disclosures and closed 27% higher at $5.84 per share – close to the $6 value of the warrants issued in the private financing deal. The company's market cap is $70.6 million.
Since it emerged as a public company in December through a reverse merger with Desert Gateway, Retrophin's stock has traded as low as $1.50 and as high as $9.99. The company previously raised $10 million in a private placement in February (scripintelligence.com, 25 February 2013).
Retrophin paid a non-refundable fee in its most recent licensing negotiations in exchange for a 120-day period to work out a royalty-bearing license agreement that gives the company exclusive intellectual property rights to develop and commercialize a therapy that has shown utility in treating autism and schizophrenia.
Retrophin licensed its lead asset RE-021 for the treatment of focal segmental glomerulosclerosis (FSGS) from Ligand Pharmaceuticals and Bristol-Myers Squibb.
RE-021 is an endothelin receptor antagonist (ERA) and angiotensin receptor blocker (ARB) that Retrophin is developing to lower proteinuria in FSGS patients. The company intends to start a Phase II clinical trial in 2013.
Retrophin has three other compounds in preclinical development: the phosphopantothenate replacement therapy RE-024 for pantothenate kinase-associated neurodegeneration (PKAN), RE-001 for Duchenne muscular dystrophy and RE-003 for spinal muscular atrophy.
The company revealed in a third announcement on 16 August that almost all mice with a PKAN-like phenotype who were dosed with RE-024 in a preclinical study survived (37/40) while no mice (0/14) with the phenotype survived without receiving the Retrophin drug candidate (p<>
Retrophin plans to begin human studies with RE-024 in the first quarter of 2014.