Pharma Industry Pushes A Broadened Meaning For “Orphan”

BOSTON – Along with the surge in interest in drugs to treat rare or orphan diseases, there has been an increasingly strategic view of what qualifies as an orphan market, with companies looking to subdivide conditions to capitalize on the perceived advantages afforded by rare diseases, according to participants at the recent BioPharm America conference.

Large pharmas are taking a strategic, targeted approach to licensing drugs to treat rare or orphan diseases, with a 75% jump in the number of licensing execs who would consider a deal in that area in 2011 compared to when they were asked the same question in 2010, according to data reported by the Campbell Alliance at the Boston conference.

Many mid-sized companies are really looking for manageable programs in smaller indications that they can commercialize themselves with a specialty sales force.

Speaking at a Sept. 7 session on dealmaking trends in the orphan disease market, Campbell VP-Business Development Jim Hall referred to data from the consultancy’s annual Dealmakers’ Intentions Survey, which asked licensing execs from 36 companies with revenue greater than $1 billion whether they would consider orphan products. Among the portion that were most positive about entering the field in both years, the increase was 15%.

Big pharma’s entry into the orphan drug space has not gone unnoticed among the rare disease community, which has expressed concerns the attention could bring unintended consequences (Also see "Who's Afraid Of Big Pharma? Perhaps The Rare Disease Community" - Pink Sheet, 14 Apr, 2011.).

But, with the breakdown of the blockbuster model and omnipresent patent cliffs to worry about, pharmas are drawn to orphans by the promise of marketing exclusivity and a higher probability of reimbursement. There is also a perception that with a more defined population comes less pricing pressure and an easier time getting through FDA at a time when the goal posts have moved on large markets such as obesity and diabetes.

Notably, the survey of dealmakers found interest in orphan assets was even higher among mid-sized companies. Among 28 of those companies surveyed in 2011, 60% responded with the highest degree of interest. Those companies may be looking for more manageable programs in smaller indications that they might be able to commercialize themselves with a specialty sales force. In fact, they may not be looking for orphans at all.

The strict definition of orphan is a disease that affects 200,000 people or fewer, and there are about 7,000 diseases on that list, most of them without treatments. But that definition is morphing, at least in the vernacular – FDA has a tight statutory standard – to include subsets of broad illnesses with an unmet medical need.

An Orphan By Any Other Name

Autism is not an orphan disease when taken as a whole, but Seaside Therapeutics LLC, in Cambridge, Mass., is using an orphan strategy to develop a portfolio of personalized medicines to treat Fragile X syndrome, autism spectrum and other neurodevelopment disorders, panelist Randall Carpenter, a neuropsychiatrist who is president, CEO and co-founder of Seaside, explained. “Every time you identify a genetic cause, you define an orphan disease,” he said.

Seaside has three products in the clinic, the most advanced of which, STX209, is being studied in both Fragile X and autism; it is in Phase III for Fragile X (“Experimental Autism Spectrum Drug Improves Symptoms,” Health News Daily, July 28, 2011).

The company doesn’t anticipate orphan-style pricing for Fragile X, which is a sizeable population, but reasonable pricing would be enough to make the company profitable and able to build a sustainable enterprise, Carpenter said.

There is precedent for subdividing a disease to create orphan cohorts. Combined, multiple sclerosis does not qualify as an orphan condition. But drug development has separated out the disease into qualifying segments. Thus, relapsing-remitting MS does have orphan status.

Indeed, during an earlier session, Deanna Peterson, VP of business development at Shire PLC’s Human Genetic Therapies unit, said she was at the partnering meeting to look for “anything that is orphan or can be ‘orphanized.’” And orphanized could mean aiming for a segment of a larger patient population that has failed existing therapies, thus creating an orphaned cohort.

The orphan drugs developed by the HGT unit comprise the legacy backbone of the company. The mid-sized firm has ably shown that a specialty model that targets small market segments may be the most prepared to survive the current industry environment (Also see "As Pharma Falters, Shire Specialist Model Hits Sweet Spot" - Pink Sheet, 2 Aug, 2011.).

During a separate panel discussion on the rise of specialty markets, Shire CEO Angus Russell pointed to his company’s decision to develop the attention deficit hyperactivity disorder drug Vyvanse (lisdexamfetamine) – which is being targeted by a pack of generic drug makers – for negative symptoms and cognitive impairment in schizophrenia (in Phase III) and for major depressive disorder (in Phase II).

Investors pushed back at those generally primary care indications until they were made to understand that the goal is not a first-line indication, Russell said. “One of the mantras of this industry is you’ve got to be first-line therapy. … You’re dead if you’re not first.” Instead, “we’re saying we’re ok with being fourth or fifth-line therapy” because when patients have failed the typical drugs, they get referred back to the specialist with their unrelenting symptoms. Antipsychotic drugs are notoriously ineffective, failing to help as many as 40% of patients who try them. Those patients represent a high unmet need, “and that’s where we come in.”

“This is not a line extension,” Russell insisted. “With three million people suffering from unremitting symptoms, you can be sniffy about it, but to me it’s serving a population” with an urgent unmet need.

Lessons And Cautions From The Field

It is no wonder big pharma sees orphan drugs as a potential new income stream. Approximately 40 million to 50 million people have a classically defined rare disease, Steven Laux, senior director of business and corporate development for Discovery Labs Inc. in Philadelphia, said. “That’s a lot of people.” And 7,000 diseases is a “pretty big menu to chew on.”

The question for pharmas entering the orphan arena, however, is whether they can adapt to “what the space means,” said Suzanne Bruhn, senior VP for strategic planning and program management at Shire’s HGT unit. True, there is a lot of unmet need out there, but orphan drug development requires a different kind of mindset, she cautioned.

Chief among the “rules” is that patients, families and disease advocacy groups should be treated as partners in all aspects of orphan drug development, the panelists agreed. “The tendency is to co-opt” but “you need to treat them respectfully,” said Gary Pasternack, CEO of Asklepion Pharmaceuticals LLC, which is working on ultra-orphan pediatric liver diseases. They can identify patients for trials and they will make the value case to the other patients, he said, adding that the National Organization for Rare Disorders often acts as an honest broker between industry patient assistance programs and patients.

Though disease advocacy organizations are playing a larger role in drug development as a whole, that shift started with a rare disease group: the Cystic Fibrosis Foundation (Also see "CF Patients Breathe Easier With Vertex Drug" - Pink Sheet, 23 Feb, 2011.). Disease groups are not only adept at matching their patients to clinical trials, they fund research in orphan areas that historically have been unattractive to big pharma.

Companies also shouldn’t assume an easy path through FDA. Laux’s Discovery is hoping for approval of Surfaxin, its synthetic peptide-containing surfactant for treating respiratory distress syndrome in premature infants, in the first quarter of 2012. But its travels through the FDA gauntlet fly in the face of the perception of an easier path for orphans. Discovery first filed the therapy in 2004.

The company responded to a 2009 “complete response” letter on Sept. 2 after satisfying regulators’ questions about testing for the drug and anticipates a six-month review (“Discovery Escapes Clinical Trial Requirement For Surfaxin,” Pharmaceutical Approvals Monthly, February 2010).

Another caution is that these drugs must treat “a serious aspect of a serious disease,” Bruhn said. “That’s why orphan protection is so important.”

And, “don’t recycle without adding value,” added Pasternack. That can be even more problematic when companies attach premium pricing to orphan therapies. He brought up the cautionary tale of KV Pharmaceutical, which infamously launched Makena (hydroxyprogesterone caproate) for prevention of pre-term birth at what was deemed exploitive pricing compared to versions of the same medication produced by compounding pharmacists, drawing congressional attention (Also see "FDA Steps Into Makena Pricing Dispute In The Name Of "Access"" - Pink Sheet, 4 Apr, 2011.).

Pasternack also recalled the misadventures of URL Pharma Inc., which also drew criticism from the Hill. After obtaining formal FDA approval for Colcrys (colchicine) in 2009 to treat gout flares and familial Mediterranean fever, an orphan condition, the company raised the price from 9¢ to $4.85 a pill. Colchicine had previously been marketed as an unapproved drug (Also see "Hill Democrats Continue Inquiries Into High Prices For New Versions Of Old Drugs; Avanir's Nuedexta And URL Pharma's Colcrys Targeted" - Pink Sheet, 25 May, 2011.).

It appears increased oversight, not only from Congress but from payers, is the price industry will have to pay for the uptick in activity in the sector (Also see "Pricing Rare Disease Drugs Requires Care As Payers Increase Scrutiny" - Pink Sheet, 29 Aug, 2011.).

By Shirley Haley