August 22, 2019 / 10:33 AM / 4 months ago

CORRECTED-UPDATE 2-Retrophin scraps nervous system disorder study, shares dive

(Corrects paragraph 4 to remove reference to settlement amount of $30 million)

By Aakash B

Aug 22 (Reuters) - Retrophin Inc said on Thursday it was discontinuing the late-stage study for its rare neurological disorder treatment after it failed to improve patients' ability to conduct daily activities such as eating and walking, sending shares down 30%.

The treatment, fosmetpantotenate, was being tested against placebo in 84 patients with pantothenate kinase-associated neurodegeneration (PKAN), a rare, genetic and life-threatening disorder.

"We have realized that this is a failed study with no difference to placebo," Chief Executive Officer Eric Dube said.

The latest setback for Retrophin comes after the company settled all outstanding disputes with founder and former CEO Martin Shkreli, who was ousted in 2014 and later convicted for conspiring to manipulate Retrophin's stock price.

In May, Shkreli sued three former colleagues at Retrophin, saying they illegally ousted him.

Shares of the San Diego, California-based company fell as much as 32% to $11.84 in morning trade, hitting their lowest level in nearly five years, after fosmetpantotenate failed both primary and secondary goals of the study.

Retrophin said that even though the company was in the process of conducting additional analysis, it did not expect sub-groups within the study population to show indications that the treatment might work.

PKAN, which can lead to movement disorders and visual impairment, is estimated to affect up to 5,000 people worldwide, Retrophin said. There is currently no approved treatment for the condition, according to Retrophin.

The late-stage study analyzed fosmetpantotenate using a scale to measure improvement in daily activity in patients called the PKAN-ADL scale through a period of 24 weeks.

Retrophin is also testing a drug for two rare diseases in late-stage studies. (Reporting by Aakash Jagadeesh Babu in Bengaluru; Editing by Shinjini Ganguli)

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