The very mention of orphan drugs is enough to give some pharma accountants the jitters. Chasing a cure for a rare disease is an ethical imperative, but high risk, high-cost rarely looks good on the balance sheet.
The sector is a corkscrew ride that twists research and resources into a framework designed for mass products.
The complexity starts with understanding the disease or condition and continues with the difficulty of designing trials and recruiting patients and then on to collating enough robust data to have a chance of securing market authorisation. The process can come unstuck at virtually any point with costs stacking up far from reimbursement.
But as the blockbuster river dries up and the easy research is taken and filed, orphan drugs may offer opportunities to both make profits and enhance credibility. The maths will always be paramount but a commercial model is emerging.
Regulatory flexibility
There are encouraging signs in the continued regulatory flexibility from the US Food and Drugs Administration (FDA) and the European Medicines Agency (EMA), who made a pact to waive or reduce licence fees and extend exclusivity up to seven years to allow a healthy clawback on investment. The devilish detail of how to get enough people from a rare disease group into a clinical trial is also being helped by regulators collaborating with scientists to optimise all data and relax recruitment criteria and trial processes.
Partnerships between companies, scientists, patient groups, physicians and funders are starting to build and – while major studies assess the societal and economic balance sheet – the light in the sector tunnel appears to be getting brighter.
The mood is confident at the Novartis campus in Basel, Switzerland, the company’s European HQ, where 17,000 people work in an ever-developing research and development hub, complete with art installations and sushi restaurants, on the banks of the River Rhine.
Last year Dhaval Patel, head of the Novartis Institutes for BioMedical Research, was addressing an annual meeting where the company parades its shiny prototypes and crystal ball gazes for the near future. His words were a huge indicator that orphan drugs have mainstream appeal.
“We use rare disease to guide our drug discovery programme and our real focus is unmet need,” he said. “It is not just about the cool science, though we have to do that to attract the brightest and best, it is about meeting that need.”
The breadth of the need and the potential to use an orphan drug beyond its initial target is the magnetic draw for some pharma companies and why Novartis, among others, is seeing increased market potential. “Our start point is a lack of understanding of the mechanisms of a disease and how we can intervene,” added Patel. “We focus a lot of time on understanding those mechanisms and then move forward.”
The company has 13 orphan drugs on the market and more than 60 research projects with ‘orphan designation’ bubbling away in preclinical or clinical development. One of the company’s brightest hopes is Zykadia (ceritinib), which treats a rare form of non-small cell lung cancer. The FDA not only gave the drug an orphan designation, but in its run-up to market it also received ‘breakthrough’ and ‘priority review’ status from the US regulator. Little wonder then that Zykadia’s US approval at the end of April came in a remarkably quick time, with the FDA delivering its verdict on the drug four months ahead of the review deadline.
It’s not just about cool science, though we need to attract the brightest and best, it’s about meeting unmet need
Building resources
Get it right and the rewards can be astronomical. The ability to get to market and charge large prices for an annual supply has meant that around a third of orphan drugs net sales of $1bn, according to research by Thomson Reuters. Other reports reinforce the economic lure by suggesting that the worldwide market will reach £80bn by 2018.
GlaxoSmithKline and Pfizer have both launched dedicated rare disease units, with GSK drawing up a priority list of 200 conditions and seeding start-ups and funding innovative companies to broaden its research pool. In 2011 Sanofi was convinced enough to pay $20.1bn for orphan drugs pioneer Genzyme. The acquisition of the US biotech brought Sanofi new treatments for multiple sclerosis, Gaucher’s disease and Fabry disease. The French company has also subsequently credited Genzyme with influencing its own culture thanks to its strong patient focus.
Meanwhile the industry deals keep coming. In January Sanofi signed a $700m expansion of its rare diseases partnership with Alnylam in a deal that saw Genzyme become a major stakeholder in the genetic medicine specialist and gain certain global rights to three products in Alnylam’s pipeline. The only one of these treatments named so far is ALN-TTRsc, which is an RNAi therapeutic in phase II development for the treatment of familial amyloid cardiomyopathy – a genetic condition where the heart muscle is damaged by a build up of amyloid deposits.
And in May Shire agreed a pipeline-boosting deal to buy US company Lumena Pharmaceuticals for upwards of $260m. The transaction will provide Shire with two drugs in mid-stage clinical trials for rare liver diseases that the company said would complement its existing gastrointestinal drug portfolio. The acquisition of Lumena certainly ties in perfectly with Shire’s recent escalation of its activities in rare diseases, which has been orchestrated by chief executive Flemming Ornskov since taking over leadership of the company last year. The company already had its own orphan brands such as Replagal (agalsidase alfa) for Fabry disease, Hunter’s syndrome treatment Elaprase (idursulfase) and Vpriv (velaglucerase alfa) for Gaucher disease, when it bolted on Viropharma in a $4.2bn deal announced last November.
Standing together
Swedish biopharmaceutical specialist SOBI is another company dedicated to orphan diseases and it has a clear view of the challenges. “This is a field where no-one can be successful on their own. It requires incredible levels of cooperation,” said Wills Hughes-Wilson, SOBI’s chief patient access officer.
“Building increased opportunities for collaboration across borders, between companies and academia and between different actors in the process of drug research, development and delivery will be a vital element in this field.”
SOBI wants to see collaborations to form at the start of research and development and which also include Health Technology Assessment bodies and national paying authorities to maximise the chances of investment leading to drug development.
Patient groups and physicians are leading one pioneering public-private partnership on which SOBI sits as an industry member. Part-funded by the EU the DevelopAKUre initiative aims to find the first treatment for the bone disease AKU, which causes early-onset osteoarthritis.
“We are very encouraged with the increased international collaboration,” added Hughes-Wilson. “This can be European, transatlantic and global, and builds on almost 20 years of increased pan-European collaboration in the field of rare diseases.”
Working in the margins of health research is also attracting a new generation of ultra-capable minds, and companies are vying to attract the best. Hughes-Wilson believes the cool factor of triumphing in a rare disease field could be a huge motivation to progress and success.
“We certainly consider that we have some of the brightest minds who are drawn by the pioneering nature of our work and our commitment to the patients,” she added. “We have several colleagues in-house who have developed great advances but we also work as part of a collaborative community of bright, committed and dedicated scientists, partnering both internally and externally, and within academia and other companies.”
Reality checks
Boehringer Ingelheim, whose idiopathic pulmonary fibrosis candidate nintedanib has orphan designation in the US and Europe, injects a note of caution that many firms are looking to limit their fields of investigation rather than extend them in the chill of the current economic climate.
“There are many, and many obvious, problems with clinical research and studies when developing an orphan drug,” said the company’s medical director for the UK and Ireland Dr Charles de Wet. “You have to be brave to pro-actively plan for them, which is sad because they are typically untreatable diseases, often fatal, and cause a lot of heartache and sorrow.
“It is a purely practical issue that from a scientific and economic perspective, the normal route is to focus research on specific areas.
“What would help is more collaboration with academic research units. This is moving forward because industry and academia realise that we have exhausted all the easy research and we have to work together to crack the harder stuff.”
