Replies to post #181749 on Biotech Values

[oldberkeley]

Righteous indignation lost its street cred during the 1960s, so I will spare you good people my specific thoughts on the morals of Retrophin. Let's all hold hands and agree that we love capitalism. We love helping and treating patients. We love science and the possibility of curing disease. But we abhor predatory capitalism on the backs of the sick and silent.

Ancient Greek healers and apothecaries generally looked at their profession as a calling and a gift from the gods, but they were not averse to accepting a goat or some coins since they too had to eat.

We just might have drifted a tad away from that.

[oc631]

We love science and the possibility of curing disease. But we abhor predatory capitalism on the backs of the sick and silent. Can't we agree on that?

I'm with you 100%. The beauty of being a biotech investor is you can be an altruist and potentially make a buck along the way. Then there are those that add no value. Opportunists looking to bleed the system, deluding themselves on how clever they really are. The scum of Wall St. have done a great job of demoralizing a dynamic industry.

[iwfal]

RTRX

The current pricing tells me this CEO is worse than the worst.

Suggest that the demonizing is a tad overdone:

1) I think everyone who watches rare diseases is aware that one of the difficulties of ultra rare diseases is building awareness (and associated registry). I'll try to find actual stats (e.g. From Biomarin) but am very confident it costs many millions - not something affordable or worthwhile at $10 per day per patient. Suggest the company should be judged partly by how they grow the registry population. How much they end up pulling in per additional life they save.

2) I would suggest that the moral outrage is disproportionate even if #1 is minimal. E.g. Some are saying it is ok to charge exorbitant rates if you put the drug through trials. Even though that too is very high risk adjusted return compared to most approved drugs. Is that appropriate? (I'd suggest a large hunk of the outrage is about his style and the abruptness of the change compared to, say, JAZZ.)

3) Question: if RTRX manages to repurpose their drugs to other, related, rare diseases (via trials) would it then be fair to increase the price to typical rare disease costs despite that impacting the current patients in the original disease? Or, more generally, if they do run other trials in other rare disease using the 'rent seeking' money doesn't that matter?

All told I'll wait to judge the morality compared to, say, Biomarin. IMO it is as much about how the money is spent as how it was acquired. (BTW - this whole area is rife with moral unpleasantness. E.g. People generally like the concept of QALY, but under QALY most rare diseases wouldn't be funded.)

[hptaxis]

Biotech Company Retrophin Fired CEO Because of Stock Irregularities
http://www.businessweek.com/articles/2014-10-02/biotech-company-retrophin-fired-ceo-because-of-stock-irregularities

Yesterday I wrote about the abrupt ouster of biotech company chief Martin Shkreli, a former short seller who took the ultimate long position—starting Retrophin, a publicly traded drug manufacturer. At Bloomberg Businessweek, we’d taken a special interest in the precocious Shkreli, 31. We’ve wondered whether, after years of betting on biotech stocks to fall, he’d undergone a conversion or was using his knowledge to game the field.

Now I’ve got some specifics on why Retrophin’s board of directors unceremoniously dumped the executive on Tuesday. According to people familiar with the company, the board concluded that Shkreli had committed stock-trading irregularities and other violations of securities rules. The violations included grants of Retrophin stock to certain recipients in the absence of a shareholder-approved distribution plan, failures to disclose stock grants, and grants of stock above limits imposed by the plan that was eventually put in place, according to the people familiar with the company. Shkreli has not returned messages I’ve left on his cell phone seeking more substantive comment.

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It is now Retrophin that will find itself the target of civil litigation. A shareholder suit was filed today against the company in federal court in New York, making reference to Shkreli’s ouster, the interim CEO, Aselage, confirmed.