Shortly after unveiling its newest clinical candidate for infantile spasms and nephrotic syndrome, Retrophin Inc. filed for a $40 million initial public offering (IPO), with plans to move its stock to Nasdaq, trading under “RTRX.”
The stock currently is listed on the OTCQB market under the same symbol.
The New York-based biotech has therapies in development for postpartum milk let-down, schizophrenia and autism. It will use the proceeds to seek reintroduction of Syntocinon (intranasal oxytocin spray) to the U.S. market for aiding milk let-down, to support Phase II trials of Syntocinon in schizophrenia and autism, to fund its new candidate, RE-034, through Phase III development and to begin safety testing of another candidate, RE-024.
“We see RE-034 as another pipeline boost for RTRX, bolstering both the CNS and nephrology focus,” wrote Roth Capital Partners analyst Joseph Pantginis.
RE-034, or cosyntropin, is a long-acting synthetic analogue of a naturally occurring hormone, adrenocorticotropic hormone (ACTH), formulated with zinc. Retrophin will file an investigational new drug application and begin a Phase I pharmacokinetic study testing RE-034 in the first half of 2014. Soon after, it will advance into a Phase III pivotal trial of RE-034 in infantile spasms and nephrotic syndrome.
Infantile spasms, also known as West syndrome, is a catastrophic form of epilepsy that can cause brain damage if not controlled. Animal-derived ACTH can be used as a therapy, but its high cost limits patient access. Nephrotic syndrome is a disorder characterized by high levels of protein in the urine. If not controlled, the condition will become a medical emergency requiring dialysis. The standard treatment, steroids, often fails, but the scientific literature suggests that ACTH may reduce the high protein levels.
The company also recently licensed Syntocinon Nasal spray from Novartis AG and acquired Kyalin Biosciences Inc.
It paid $5 million up front for Syntocinon, plus milestone payments and royalties. Syntocinon was approved in the U.S. in 1960 to assist initial postpartum milk ejection, but was discontinued by Novartis in 1997 for commercial reasons.
Disruption of oxytocin, caused by psychological and chemical stressors, is thought to play a role in preventing milk release during lactation. There are no FDA-approved drugs on the market for aiding milk let-down in the U.S. Retrophin said it believes there is a need in the market for a therapy for mothers experiencing lactation deficiency.
Syntocinon also has potential for treatment of schizophrenia and autism spectrum disorders. Based on three large, randomized, double-blind, placebo controlled, proof-of-concept trials in which people with schizophrenia experienced symptoms despite receiving therapeutic doses of atypical antipsychotic drugs, Retrophin said intranasal oxytocin administered as an adjunct therapy might improve positive and negative symptoms of the disease. It is partially funding a Phase II study of oxytocin in schizophrenia in approximately 143 patients. Results are expected in the third quarter of 2014.
Retrophin also noted small clinical studies which suggested that oxytocin may improve social cognition and quality of life in patients with autism, and it intends to begin a Phase II study of Syntocinon for autism spectrum disorders in 2014.
RE-024 is Retrophin’s investigational phosphopantothenate prodrug replacement therapy for pantothenate kinase-associated neurodegeneration (PKAN), the most common form of neurodegeneration with brain iron accumulation. PKAN is typically diagnosed in the first decade of life. Its consequences include dystonia, dysarthria, rigidity, retinal degeneration and severe digestive problems. It is estimated that PKAN affects 1 to 3 per million people. There are no drug treatments available for the disease.
The drug will enter a Phase I trial this month or in January 2014 under an emergency investigational new drug application.
Retrophin’s last pipeline product, RE-021, or sparsentan, is an angiotensin receptor blocker and a selective endothelin receptor blocker. The company licensed it from Ligand Pharmaceuticals Inc. and Bristol-Myers Squibb Co. and is developing it for focal segmental glomerulosclerosis (FSGS) and other nephropathies. It is enrolling up to 100 patients for a Phase II study of sparsentan.
Retrophin filed its IPO as an emerging growth company under the Jumpstart Our Business Startup Act.
In other financings news:
Acelrx Pharmaceuticals Inc., of Redwood City, Calif., signed an amended and restated credit facility with Hercules Technology Growth Capital Inc. providing for $40 million in new loans. Acelrx drew a first tranche of $15 million upon closing of the credit facility and applied approximately $8.5 million to outstanding obligations under the prior credit facility with Hercules. The second tranche of up to $10 million is available to be drawn any time prior to June 30, 2014. A third tranche of up to $15 million is conditional upon approval of Zalviso (sufentanil sublingual microtablet system) by the FDA, and can be drawn between Dec. 15, 2014, and March 15, 2015. Acelrx’s stock (NASDAQ:ACRX) gained 99 cents, or 10.3 percent, to close Thursday at $10.60.
Cel-Sci Corp. of Vienna, Va., priced a public offering of stock and warrants worth $3 million. Each unit is composed of one share of common stock and a warrant to purchase one share of common stock. The warrants are exercisable immediately, expiring Oct. 11, 2018, and have an exercise price of $1.25. The offering will close on Dec. 24. Underwriters are granted a 45-day option to purchase an additional 10 percent of the shares or warrants to cover overallotments. Net proceeds will be used for a Phase III trial, plus other research and development activities. Shares of Cel-Sci (NYSE:CVM) fell 14 cents, or 20 percent, to close Thursday at 57 cents.