Orphan diseases venture capital

As high volume drugs become harder and more expensive to create and generics continue to put a squeeze on those margins, more companies are turning to less mainstream targets. Dr Sarah Houlton looks at the challenges and potential gains from orphan drugs.

With the decline in the number of potential blockbuster drugs reaching the market in recent years, pharmaceutical companies are looking for alternative strategies to refill their pipelines, including drugs for rare diseases. While products to treat these conditions will not by definition ever be able to create the sales volumes of blockbusters that pharma has relied on for its profits, they still offer a great deal of potential to offer a significant contribution to the bottom line as part of a broader portfolio. They can command a premium price, and there may even be assistance from governments or charities that will smooth the development process and contribute to research costs.

An orphan condition is defined by the US Food and Drug Administration (FDA) as one that affects up 200, 000 patients in the US, but many are much rarer than that and there may be only a handful of sufferers around the world. The European Organisation for Rare Diseases and the US National Institutes of Health have already identified about 7, 000 rare diseases and the total continues to rise by approximately 250 a year.

Efforts to find drugs for these diseases have their roots in the US Orphan Drug Act, which was passed in 1983. This was brought in to encourage the development of drugs for diseases that affect people in the developed world, but which are sufficiently rare for there to be little commercial drive for that research. Europe followed suit in 2000, and various other countries have similar legislation in place. Essentially, these schemes offer incentives to those who are prepared to invest in finding treatments for diseases whose patient populations are so small that those treatments may never turn a profit or even get close to it.

Of course, there are exceptions rituximab (Genentech and Biogen Idecs Rituxan/ MabThera) is currently the worlds second-biggest seller, thanks to its ability to treat a range of different cancers that are deemed orphan and the premium price it commands. But rituximab is definitely the exception, not the rule.

Rituximab is currently the worlds second-biggest seller, thanks to its ability to treat a range of different cancers that are deemed orphan and the premium price it commands. But rituximab is definitely the exception, not the rule

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