What Will Retrophin Inc (RTRX) Get For Its Money On A Raptor Pharmaceutical Corp. (RPTP) Deal?

The rumor mill is working hard right now in the biotech space, and the latest word is that Retrophin Inc (NASDAQ:RTRX), the company founded by Martin Shkreli, is pitching to buy Raptor Pharmaceutical Corp. (NASDAQ:RPTP). The latter is up nearly 15% on the rumor. There’s no confirmation as yet, of course, but if the deal does come to fruition, what might it mean for Retrophin? Let’s take a look.

After parting ways with Shkreli, Retrophin restated its mission as going after devatstating diseases – specifically those that don’t have any (or have few effective) available treatment options. Its pipeline supports this mission, with its current lead focuses being primary biliary cholangitis (PBC), a degenerative liver disease for which there is no currently available cure, and focal segmental glomerulosclerosis (FSGS), a scar tissue related condition that causes nephrotic syndrome in kids.

Raptor’s product portfolio somewhat fits in to this mission statement. It’s two lead products are Procysbi, a nephropathic cystinosis drug, and Quinsair, a lung infection target. These two drugs account for the majority of Raptor’s revenues, which came in at a little over $32 million at last count (second quarter 2016).

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We believe that this isn’t the driving force behind the rumored acquisition, however.

We think its rooted in Raptor Pharmaceutical Corp. (NASDAQ:RPTP)’s pipeline, and specifically, its lead development candidate, the above mentioned Procysbi in a Huntington’s disease target indication. For development purposes it’s referred to as its non commercial name RP103, and ts currently in a phase 2/3 clinical trial investigating efficacy in just short of 100 adults.

Huntington’s disease is pretty rare, it has a prevalence of 5.70 per 100,000 people in North America, Europe, and Australia, but its currently incurable and almost totally debilitating. It’s a neurodegenerative, so patient’s start off with small symptoms but (over a period of about 15-20 years, in this instance) get worse. Symptoms include loss of motor function, chorea (which is a type of jerk action) and loss of brain function/dementia. It’s not a nice disease, it’s devastating at late stage, and there is no currently available cure. Patients have access to a variety of drugs that target symptoms, but these have variable efficacy across the patient population and don’t do much in the latter stages. In other words, the drug would fit perfectly into Retrophin’s development pipeline.