Retrophin, Inc.’s RTRX shares jumped 11.8% after the company announced its intention to sell its rare pediatric disease priority review voucher (pediatric PRV) to Sanofi SNY in a $245 million deal.
Upon the closing of the deal, Retrophin will receive $150 million from Sanofi, followed by two equal installments of $47.5 million in 2016 and 2017.
We note that the FDA issues a pediatric PRV to encourage the development of new drugs and biologics to prevent and treat rare pediatric diseases. The voucher can be used to obtain priority review for a new drug application or biologics license application submitted later. Priority review would shorten the review period of the candidate and could lead to speedy approval.
Retrophin was awarded the pediatric PRV when Cholbam, acquired from Asklepion Pharmaceuticals, received FDA approval in Mar 2015. The drug is approved for the treatment of pediatric and adult patients suffering from bile acid synthesis disorders due to single enzyme defects and for patients with peroxisomal disorders (including Zellweger spectrum disorders).
Meanwhile, Retrophin intends to utilize the proceeds from the sale to develop treatments for patients suffering from severe rare diseases.
Apart from Retrophin, quite a few companies have sold PRVs in the past and earned millions of dollars. While Knight Therapeutics had sold its voucher to Gilead Sciences GILD for $125 million, BioMarin BMRN received $67.5 million for its voucher.
Retrophin currently carries a Zacks Rank #3 (Hold). Gilead is a better-ranked stock in the health care sector carrying a Zacks Rank #1 (Strong Buy).
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