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Why Are Shares Of Small-Cap Biotech Retrophin Plunging To A Multiyear Low?

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Why Are Shares Of Small-Cap Biotech Retrophin Plunging To A Multiyear Low?

Retrophin Inc (NASDAQ: RTRX) shares were plummeting Thursday following an adverse clinical readout from the company.

What Happened

The small-cap biotech announced that a Phase 3 study dubbed FORT did not meet its primary endpoint, showing no difference between the treatment arm and the control arm. 

The study is evaluating the safety and efficacy of fosmetpantotenate in patients with pantothenate kinase-associated neurodegeneration, or PKAN.

PKAN is a disorder of the nervous system resulting from an abnormal buildup of iron in certain areas of brain, and it is characterized by progressive difficulty with movement, typically beginning in childhood.

The study did not meet its secondary endpoint, according to Retrophin. 

The pipeline asset was found to be generally safe and well-tolerated in the study.

Why It's Important

PKAN has no approved treatment option, meaning there is a significant unmet need.

Along with sparsentan, which is being evaluated for focal segmental glomerulosclerosis and IgA nephropathy, fosmetapantotenate is the most advanced investigational compound in Retrophin's clinical pipeline.

"We will work closely with the investigators to further analyze the results of the study and share them with the PKAN community to contribute to the growing knowledge of this rare disorder," CEO Eric Dube said in a statement. 

The company said it expects to present the data at an upcoming scientific congress and work along with study investigators to determine the next steps for the FORT study, including the ongoing open-label extension of the study.

Retrophin shares were plunging 28.45% to $12.45 at the time of publication Thursday. 

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