Retrophin (RTRX) announced positive results from a mid-stage clinical trial Wednesday in which patients with a rare kidney disease responded to treatment with its experimental drug sparsentan at more than twice the rate of patients receiving a control drug.

The company's next step will be to meet with the U.S. Food and Drug Administration to map out plans for a pivotal phase III study of sparsentan, with the goal of securing the drug's approved for the treatment of focal segmental glomerulosclerosis, or FSGS.

There are no currently approved drugs for the rare disease, which causes progressive scarring of the kidneys, leading to end-stage kidney disease.

Retrophin shares rose 41% to $22.98 in Wednesday trading. 

Sparsentan is the first drug to be developed internally by Retrophin, an orphan disease company founded by Martin Shkreli in 2011. As CEO of Retrophin, Shkreli in-licensed sparsentan from Ligand Pharmaceuticals (LGND) in 2012 and helped design the successful clinical trial announced Wednesday.

Shkreli left Retrophin in 2014 to start up another drug company, Turing Pharma, and then became infamous as the reviled "Pharma Bro" who raised the price of an antiparasitic drug and was later arrested and indicted on federal charges of securities fraud.

The criticism, even hatred, of Shkreli might be justified, but if sparsentan is eventually approved, patients with FSGS will have him to thank for bringing the drug into clinical development.

The phase II study enrolled 109 patients with FSGS and randomized them to treatment with one of three doses of sparsentan or an active control arm treatment using another drug, irbesartan.

After an eight-week treatment period, the mean reduction of proteinuria, or protein detected in urine, was 44% for the sparsentan-treated patients, compared to 18.5% for the control arm patients. Protein in urine is a biomarker for reduced kidney function and was used as the primary efficacy endpoint in the phase II study. The reduction in proteinuria favoring sparsentan over the control was statistically significant.

Each individual sparsentan dose cohort also showed relative improvement over the active control but not enough to reach statistical significance because of the relatively small number of patients in each arm of the study.

One patient reported a serious case of anemia possibly related to sparsentan, but it did not cause study discontinuation. There were no withdrawals from the study due to fluid retention, a possible side effect of sparsentan which was being closed watched by investors heading into Wednesday's results.

"Significant reductions in proteinuria, along with a well-tolerated preliminary safety profile have us excited about being one step closer to providing a new treatment option for patients with FSGS," said Alvin Shih, Retrophin's head of R&D, in a statement.

Retrophin believes proteinuria is a clinically meaningful efficacy endpoint for patients with FSGS and should therefore be used as the primary endpoint for the phase III study.

The company still has to convince the FDA, however.

The health care investment bank Leerink estimates there are 40,000 patients with primary FSGS in the U.S. Not all these FSGS patients will be eligible for treatment with sparsentan, if approved, but the bank still believes the drug's peak sales opportunity approaches $1 billion.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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