Retrophin moves a step closer to becoming the new Questcor


Retrophin has managed to pack a lot into its short life as a public company, so it was only a matter of time before it found an acquisition target like Manchester Pharmaceuticals, which will bring it a revenue line and the possibility of near-term profits.

The $29.5m takeover fits perfectly with Retrophin’s strategy of buying rights to forgotten products and moving to reposition them for treating rare disorders – upsetting at least one major competitor, and risking the wrath of patient groups and payers along the way.

That competitor is Questcor Pharmaceuticals, the controversial maker of Acthar, a drug that despite being decades off patent was turned into a potential blockbuster drug on the strength of orphan exclusivity and a steep price hike. Questcor and Retrophin have locked horns in a legal action.

The blueprint

The Questcor model actually forms the blueprint for Retrophin, a company founded in 2011 and run by the former fund manager Martin Shkreli. Manchester’s key asset is Chenodal (chenodeoxycholic acid), a drug that used to be sold for treating gallstones before being withdrawn owing to poor sales.

Crucially, off-label chenodeoxycholic acid is also the standard of care for the rare disease cerebrotendinous xanthomatosis (CTX) – for which it got orphan designation in 2010. On a call today Mr Shkreli confirmed that Retrophin would “initiate price increases” to raise Chenodal's US cost above the current $110,000 a year.

While this might seem cynical, it has so far worked well for Questcor, despite considerable pressure from healthcare insurers (Questcor’s Acthar fairy tale goes sour, September 20, 2012).

For K-V Pharmaceutical, a company that had been accused of price gouging in pursuit of a not dissimilar strategy with the premature birth drug Makena, it ended in administration, though of course no two situations are identical.

Retrophin will seek to reintroduce Chenodal formally for CTX in the US, benefiting from seven years’ orphan exclusivity, though to carry out a placebo-controlled study would be “unethical”, said Mr Shkreli. He added that in time a once-daily chenodeoxycolic acid would be developed, with Chenodal being removed from distribution.

The Chenodal plan broadly reflects the rest of Retrophin’s pipeline. Synctocinon, for instance, is a drug approved in the 1960s for assisting lactation but withdrawn in 1997, also owing to poor sales; Retrophin licensed it from Novartis, and intends to develop it for schizophrenia and autism.

Sparsentan, a Bristol-Myers Squibb/Ligand project in phase II for hypertension, was licensed in by Retrophin specifically for development for focal segmental glomerulosclerosis, another rare disorder. Retrophin raised $40m last month, which will no doubt help fund studies as well as the Manchester acquisition.

Copycat strategy?

Anyone still in doubt about the similarity with Questcor need look no further than that company’s acquisition from Novartis of US rights to Synacthen, a synthetic version of Acthar (Questcor gives the bulls another short-term reason to cheer, June 12, 2013).

Mr Shkreli was understood also to be interested in this asset, and after Questor's deal Retrophin gained rights to another synthetic version of this product, cosyntropin, which it aims to develop under the lab code RE-034. To complicate matters further, Gregg LaPointe, a former Questcor executive, holds orphan designation for the synthetic molecule, though Retrophin insists that this is irrelevant since orphan status has not yet been issued.

Interestingly, Questcor had paid Novartis $60m for Synacthen, while the terms of Retrophin’s cosyntropin deal were apparently too insignificant even to disclose. Retrophin filed an antitrust lawsuit against Questcor last month.

Imitation might be the sincerest form of flattery, though this probably cuts little ice with Questcor executives.

To contact the writer of this story email Jacob Plieth in London at or follow @JacobEPVantage on Twitter

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