Martin Shkreli's Former Firm Retrophin Considering Acquisition of Bay Area's Raptor, Deal Could be Worth $589 Million+

Martin Shkreli's Former Firm Retrophin May Acquire Bay Area's Raptor, for up to $589 Million
August 18, 2016

By Alex Keown, BioSpace.com Breaking News Staff

NOVATA, Calif. – Shares of Raptor Pharmaceuticals are up more than 17 percent in pre-market trading on rumors that Retrophin Inc. , the firm founded by Martin Shkreli, is looking to acquire the company to expand its treatments for rare diseases, Bloomberg reported this morning.

The report cites unnamed people familiar with the matter. Although no deal has been finalized, it could be worth about $589 million, based off the estimated market value of Raptor, Bloomberg said. Retrophin, which has its own focus on rare diseases such as kidney and neurological disorders, has a market value of about $633 million. Neither company provided any comment to Bloomberg.

Raptor develops drugs that treat cystic fibrosis as well as cystinosis. Last year, Raptor received regulatory approval for the expanded use of Procysbi (cysteamine bitartrate), the company’s delayed-release capsules used to treat children ages two to six with nephropathic cystinosis, a life-threatening metabolic lysosomal storage disorder that causes toxic accumulation of cystine in all cells, tissues, and organs in the body. Also last year, the company acquired cystic fibrosis treatment Quinsair from Tripex Pharmaceuticals, the first inhaled fluoroquinolone approved in Europe for the management of chronic pulmonary infections in adults with cystic fibrosis. The company is seeking approval from the U.S. Food and Drug Administration for Quinsair. The deal also gave Raptor two additional orphan diseases with significant unmet need, bronchiectasis (BE) and nontuberculous mycobacteria (NTM) lung infections.

While the Retrophin deal would be a good way for the company to grow, it is also a way for the company to maneuver out from the long shadow cast by Shkreli, its former chief executive officer. In August 2015, Retrophin sued Shkreli for $65 million after ousting him from his role as CEO. Retrophin said Shkreli breached his duty of loyalty to the biopharmaceutical company as he engaged in self-dealing, used company funds for personal use and enriched himself through false consulting contracts. Shkreli, of course, went on to found Turing Pharmaceuticals and launched in February 2015 with three pipeline products it acquired from Retrophin. Later Shkreli achieved notoriety by acquiring the 65-year-old toxoplasmosis drug Daraprim and jacking-up the price by 5,000 percent—from $13.50 per pill to $750 per pill. Later, he of course, was charged with seven counts of investor fraud in December of 2015. The seven count indictment against Shkreli included multiple charges of securities fraud, securities fraud conspiracy and wire fraud conspiracy. Shkreli is set to go to court in June 2017.

Retrophin itself was sued by investors over failing to disclose any transactions that benefitted Shkreli. In February of this year, the company agreed to pay $3 million to investors to resolve the lawsuit.
 

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