When Andrew Pollack of the New York Times declared that the “world’s largest drug company is thinking small”, he wasn’t referring to reductions in sales force.
Rather, Pollack was reporting on a licensing deal between Pfizer and Israeli biotech company Protalix which built upon a growing global trend: big pharmaceutical companies were making a move into treatments for rare diseases, otherwise known as ‘orphan’ therapies.
In the months that followed Pollack’s December 2009 article, both Pfizer and GSK (two of the world’s largest pharmaceutical companies) launched specific business units focused on R&D for orphan drugs. In their announcements, both companies highlighted the significant unmet medical needs that exist in rare diseases and the potential of therapies that were in development.
Rare disease drug development, however, is nothing new and it could be argued that these two companies have come fairly late to the party with their specialized units. As I’ve blogged before, US legislation for orphan drugs was introduced in 1983 with the specific intention of grabbing the pharmaceutical development world’s attention and imagination to help patients who had been previously neglected for treatments. At the time, few companies took up the challenge, preferring to focus on so called mainstream ‘blockbuster’ drugs – those which would garner in excess of US$1billion in annual sales – but a select number saw this incentive program as a blessing and began to focus solely on orphan products.
Genzyme is arguably the best known of the orphan developers not only because of its commercial success – the company floated in 1986 raising US$27million and was just sold to pharmaceutical giant Sanofi-Aventis for US$20.1billion – but also for its utter dedication to the patient populations with which it worked. One needs only to look at the story of Myozyme’s development for Pompe disease to see the lengths to which Genzyme goes to complete its clinical program.
While such stories are truly exceptional from a viewpoint of corporate execution, Genzyme was – and, I expect, will continue to be under new ownership – a corporate entity with commercial goals. To fully appreciate the scope of orphan drugs, it pays to spend some time considering the corporate case of Genzyme and how it reached such a significant buyout value.
Cerezyme (imiglucerase) is arguably the best known of Genzyme’s products, not least because it accounts for a sizeable portion of Genzyme’s revenues, but also as it is a second generation orphan product, based on Genzyme’s first orphan drug Ceredase.
Both these products are aimed at correcting an imbalance in Gaucher’s disease, a rare genetic disorder affecting fewer than 10,000 individuals globally, which causes the accumulation of a lipid (glucocerebroside) in cells and the creation of ‘Gaucher’ cells in organs, particularly in the spleen, liver and bone marrow. Gaucher cells accumulate in the organs, causing them to enlarge and often impairing their function. Depending on the disease onset and location of accumulation, symptoms of Gaucher’s disease vary but can be severe and life threatening.
Cerezyme therapy mimics the natural process by which individuals without Gaucher’s disease process glucocerebroside, delivering an enzyme to break down this lipid inside the Gaucher cells and the body can then process the broken down lipid as normal.
The concept seems simple, yet the underlying technology (imiglucerase) was neither cheap to develop, nor is it easy to manufacture (the process involves growing and extracting Chinese hamster ovary cells in highly regulated laboratory conditions). The end result of this process is that annual Cerezyme treatment costs, on average, over US$200,000 per patient. There are, of course, issues with such a high price point for a drug, but many have explored this argument (with a particular focus on quality of life and dosage) and it is by working with the community and payors, such as governments and insurance companies, that such issues can be researched, discussed and resolved.
From a corporate standpoint, Cerezyme is a prime example of why so many large pharmaceutical companies are now focusing specifically on the orphan drug space. Genzyme netted Cerezyme total sales in excess of US$1.5billion over the past two calendar years with estimates that around 5,000 Gaucher’s disease patients are taking the drug, 10% of them without charge. (Those sales included a period in 2010 where Cerezyme manufacture was disrupted, delivering the company lower than expected sales for the drug in 2010 (US$719m).) It’s undeniable that this is a sound business model but the risk lies in exploring an approval system which was primarily intended to incentivise companies to pay attention to rare disorders.
More enticing for many therapeutic developers of late, however, is the potential for their orphan drug technology to be used in broader medical applications; so called ‘translational medicine’. Here, drugs which have multiple potential applications are investigated for indications with the greatest clinical need first (often orphan indications, where there are still so few therapies for more than 6,000 rare and often severe diseases) before being tested for more common indications within the community. This affords a developer (but also the regulator) comfort that it has a level of safety and efficacy data. This staged approach safeguards regulatory acknowledgement before addressing broader applications (which, in turn, could lead to reductions in drug costs due to economies of scale). Here, a translational medicine born out of orphan drug status can not only help a broader patient community, but also provide even greater returns for those who have invested time and money in a high-risk industry. It really is a win-win situation. However, patience is required from investors; they need to understand the long-term view and processes involved.
It is likely that we will see more orphan drug R&D announcements in the future as pharmaceutical companies expand their presence in the space. Hopefully the goals here will remain true to the orphan drug legislation and we can continue to provide new and better therapies to those patients who need them the most.
Links & further reading
- Andrew Pollack, Pfizer Deal Signals a Move Into Treating Rare Diseases, New York Times, December 2, 2009
- Robert Weisman, Pfizer adds focus on rare diseases, Boston.com, June 16, 2010
- Albertina Torsoli and Meg Tirrell, Sanofi-Genzyme deal worth $20.1 billion, Bloomberg, February 17, 2011
- Announcements on rare disease programs: GSK, Pfizer