The Orphan Drug Boom: Gold Rush Or Flash In The Pan?

Article preview from IN VIVO - November, 2012 

Rare disease drug development has ballooned in just three years, powered by the success of independent biotechs like Alexion, Big Pharma’s entrée into the field, and pressure from regulators and payors that is dis-incentivizing development of traditional primary care drugs. The positive momentum has intensified dealmaking in the orphan drug space and is giving investors confidence to back rare disease-focused start-ups. Some have coined the resulting movement the “orphan drug bubble,” but interest isn’t likely to deflate soon – at least not as long as Big Pharma continues to invest in the area and industry is able to sustain a favorable reimbursement climate for ultra-premium-priced drugs.

 

 The Orphan Drug Boom: Gold Rush Or Flash In The Pan?

Article preview from IN VIVO - November, 2012 

Industry interest in rare diseases has ballooned in just three years, powered by the success of independent biotechs like Alexion, Big Pharma’s entrée into the field, and pressure from regulators and payors that is dis-incentivizing development of traditional primary care drugs. The positive momentum has catalyzed dealmaking in the orphan drug space and is giving investors confidence to back rare disease-focused start-ups. Is the enthusiasm, and the business model, sustainable?

If you mentioned “orphan drugs” to a pharma audience even three years ago, just a handful of drug manufacturers would likely have come to mind: the pioneer Genzyme Corp., naturally, along with comrades-in-arms Shire PLC, BioMarin Pharmaceutical Inc., and Actelion Pharmaceuticals Ltd. Well, things have changed.

In the last 18 months alone, Genzyme was acquired by Sanofi[See Deal], Pfizer Inc. launched Elelyso (taliglucerase) for the rare condition Gaucher’s disease, and GlaxoSmithKline PLC initiated a Phase III trial for what could potentially be the first drug to treat a small subset of patients with Duchenne muscular dystrophy. And it’s not just Big Pharmas that are blazing a trail into rare diseases, an area of drug development that refers to diseases that afflict fewer than 200,000 patients in the US, but are often far smaller. Alexion Pharmaceuticals Inc. – a breakout star on Wall Street though it markets only one drug, Soliris (eculizumab), for two indications that affect just tens of thousands of patients worldwide – paid a gulp-inducing $610 million up front plus milestones to acquire Enobia Pharma Inc., a company with one mid-stage clinical asset in development for an ultra-rare genetic disorder for which only 2,600 patients worldwide have been identified.

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