a bachelor’s in business administration because “it was more advantageous for me to complete my degree quickly,” he says. At 17, he landed a job with Jim Cramer—the high-energy finance pro who was a hedge fund manager before starting TheStreet.com and starring on CNBC’s Mad Money. After about four years with Cramer’s hedge fund, Shkreli says, he moved on to Intrepid, a hedge fund that’s part of the Tiger fund family.
Cramer declined to comment on Shkreli in an e-mail, saying he has “no desire to be affiliated with him in any way.”
After a decade of criticizing—and sometimes profiting from—how other people manage life sciences companies, Shkreli decided to start his own: Retrophin. He says he was partly inspired to become a biotech entrepreneur when the 15-year-old son of one of MSMB’s investors died of a rare muscle disorder called myotubular myopathy. “I think the pharmaceutical industry has dismissed a lot of these [rare] diseases as too small to make money in, or too difficult to understand scientifically,” Shkreli says. “That doesn’t sit well with me. It’s one thing to invest in companies, it’s another thing to give to charity. It’s a whole other thing to build a company yourself—that’s real dedication to patients.”
The name Retrophin is short for “recombinant dystrophin,” an engineered form of a protein that’s lacking in patients with Duchenne Muscular Dystrophy (DMD), a genetic muscle disease. Shkreli says he wrote the genetic sequence himself for a form of recombinant dystrophin after reading about research done in academia. Retrophin is currently in discussions to license key patents on the molecule from the University of Minnesota. Shkreli says he has an agreement with a Swiss manufacturer to make the drug and he hopes to begin animal trials soon.
On February 21, Retrophin suddenly moved closer to becoming a commercial-stage company when it licensed a drug from San Diego-based Ligand that has already been tested in humans. The drug, called DARA (for dual acting receptor antagonist of angiotensin and endothelin receptors), was originally developed to treat hypertension. But Shkreli, who was once one of Ligand’s largest shareholders, suspected that the drug’s ability to filter excess protein from the urine could make it even more useful in treating some kidney diseases.
So Retrophin is now developing DARA for focal segmental glomerulosclerosis (FSGS), a rare kidney disorder for which there are no FDA-approved treatments. The kidneys of patients who have the disease are unable to filter out excess protein and ultimately fail, forcing patients to go on dialysis.
When Shkreli first came up with the idea to test the drug for FSGS, he called Howard Trachtman, professor of clinical pediatrics at New York University, and one of the nation’s best-known FSGS specialists. “I was thrilled, because historically FSGS has been a somewhat neglected entity,” says Trachtman, who will be the lead investigator in Retrophin’s phase 2 trial, which should begin imminently. “Biotech companies have been unwilling to take the risk, because it’s a rare disease. Martin is different.”
Shkreli is being guided by some of the pharmaceutical industry’s best-known strategists. In addition to Hassan, the former Schering-Plough CEO, the startup counts among its investors Brent Saunders, another Schering-Plough veteran who is now CEO of Bausch & Lomb. James MacDonald, who worked in early-stage drug development at Schering and is now an industry consultant, is helping Retrophin manage its clinical trials. “Martin has done a good job of selecting diseases in which there is a single element missing—a deletion of a single gene or protein,” MacDonald says. “That will make it easier to test his hypotheses. It’s not like you have to do clinical trials that go on for years. Either the drugs will work, or they won’t.”
MacDonald acknowledges that Shkreli’s reputation as a rabble-rouser gave him some pause at first, but he was swayed by the hedge fund manager’s passion for rare diseases. “He recognizes he has strongly held views, but if you have a strong argument, he listens to you,” MacDonald says. “That’s the mark of a smart person.”
MSMB could fund Retrophin indefinitely, Shkreli says, though he’s quick to acknowledge he’ll eventually have to find other sources of capital. Towards that end, Shkreli says Retrophin will probably “embark on an important strategic transaction in the future,” such as merging with a public company that is cash-rich and has expertise in drug development.
And Shkreli says he’s already thinking about finding someone to replace him as CEO of Retrophin. “I’m the largest shareholder, and I want to support the company and help it create drugs,” he says. “But the company and these patients deserve someone who’s been in the drug business for 20 or 30 years. We’re going to look for someone with tremendous pharmaceutical experience—a world-class executive.”
Judging from Shkreli’s history beating up on what he sees as the industry’s ineffective managers, it’s a fair bet he’ll likely put the next CEO of Retrophin through a pretty tough interview process.
