Shkreli-Founded Biotech Seen Ripe for Buying as Shares Tumble

(Bloomberg) -- Retrophin Inc. shares plummeted as much as 32% in early trading on Thursday after an experimental therapy from the drugmaker missed the main and key secondary goals in a late-stage study. That may signal an opportunity to pick up shares, according to one analyst.

“Selloff overdone, buy,” Nomura Instinet’s Christopher Marai advised clients as the stock tumbled below $12 a share. All the sell-side analysts tracked by Bloomberg rate the company the equivalent of a buy. Marai is among the most bullish with a Street high 12-month price target of $57.

The biotech -- founded by Martin Shkreli, the jailed “pharma bro” who was convicted in 2017 for defrauding investors -- had its biggest intraday drop since February 2013. Fosmetpantotenate failed to work any better than placebo in a rare neurological disease known as pantothenate kinase-associated neurodegeneration or PKAN.

“This program has not represented substantial valuation in RTRX shares, given its speculative nature,” Marai said. Retrophin has $10 a share in cash and with a base business of $180 million for 2019, data for another key drug -- sparsentan -- accounts for another $14 of Marai’s price target.

Retrophin is studying sparsentan in two diseases linked to end-stage kidney disease. The company said in a statement that it was focused on advancing these programs. While U.S. and European regulators have granted sparsentan orphan drug status, those results are not expected until 2021.

To contact the reporter on this story: Cristin Flanagan in New York at cflanagan1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Morwenna Coniam

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