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Retrophin, Inc.: Initiation of Research Coverage

Thursday, April 6, 2017

William Blair & Company initiated research coverage of Retrophin, Inc. (RTRX $17.99), a biopharmaceutical company that markets three therapies for treating rare diseases.

Analyst Tim Lugo estimates sales of Thiola, which accounts for the majority of Retrophin’s top-line growth, at $89.2 million in 2017 and $100.9 million in 2018, driving total year-over-year product sales growth of 15.4% and 15.1%, respectively.

“Retrophin is exiting a period of transition,” Lugo said, “and we see its pipeline as holding significant promise on top of what should remain a stable and profitable base franchise. Retrophin’s base business comprises three approved products—Thiola, Chenodal, and Cholbam—which form a solid foothold in the rare renal disease market. Thiola is an FDA-approved treatment for cystinuria and was licensed by Retrophin in mid-2014, accompanied by a controversial price increase. Chenodal was purchased by Retrophin in 2014; it is an FDA-approved targeted treatment for gallstones. Cholbam is a newly launched treatment for bile acid synthesis disorders due to single-enzyme defects; it is also an adjunctive treatment for peroxisomal disorders in patients with manifestations of liver disease.”

Lugo continued, “We believe the company is transitioning to a pipeline execution story with two late-stage assets, sparsentan and RE-024, entering Phase III trials by the end of the year. Retrophin announced positive results in late 2016 for a Phase II clinical trial with lead development candidate sparsentan for the treatment of FSGS, a rare kidney condition that causes high levels of proteinuria and can progress to end-stage renal failure. Retrophin will initiate a pivotal study for sparsentan in FSGS by the end of the year. The company also is developing RE-024 as a phosphopantothenate replacement therapy for the treatment of pantothenate kinase-associated neurodegeneration, a rare autosomal recessive disorder. Retrophin has received a special protocol assessment from the FDA to conduct a Phase III clinical trial, which should begin enrollment in the near term.”

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