Deutsche Bank Markets Research Rating Buy North America United States Health Care Biotechnology Company Retrophin lieuter, Wveramrty Lxc•.mge Ticker RTRX.00 RTRX US NMS RTRX Agrees to sell PRV for $245M, new TP of $52 Retrophin agrees to sell its PRV to SNY for $245M• new TP of $52 This morning RTRX announced that it plans to sell the rare pediatric priority review voucher acquired with the approval of Cholbam to Sanofi for $245M. The company will receive $150M when the deal closes (no timing was provided by the company; we assume at some point during 3Q15), and two additional payments of $47.5M in 2016 and 2017. The company has previously disclosed that it plans to use the proceeds for its late-stage pipeline and/or for business development. We are raising our TP to $52 to account for the transaction. Reiterate BUY. Prior vouchers sold for $67.5M and 5125M. This is the highest price paid for a voucher to our knowledge and demonstrates their scarcity. We note that UTHR is the only other company to have one of these vouchers in its possession. The company sold the voucher for $145M over our projected sale price of $100M. A sale of $100M was worth approx $1.4/sh to our DCF. The additional $145M is approx $2/sh to our DCF. Reiterate BUY, new TP of $52. Valuation and risks: We value RTRX using a probability-adjusted DCF analysis with a 10% discount rate. We extend our estimates to 2029 and use a 2% terminal growth rate. Risks: 1) Base business sales risk, 2) Sparsentan / other pipeline products fail, 3) Regulatory risk, and 4) Reimbursement risk. Date 27 May 2015 Breaking News r4 Price at 26 May 2015 (USD/ 26.87 Price target 52.00 52-week range 26.98 - 8.09 Robyn Karnauskas Research Anal t Even Seigerman Research Associate Mohit Banal Research Associate I Key changes Price target EPS (USD} &KAM &MOM. BIM 50.00 to 52.00 0.96 to 1.65 1 4.0% 71.5% I Price/price relative — - 54P 60) Mt% IRebeeedl Performance