Orphan Drug Commercialization

Expert Profile

Section 1: Current Trends

1.1. What are the current orphan drug commercialization approaches?

Firstly, we have to really have a clear understanding about the markets of that given orphan drug to be launched, because as the different rare diseases are very different, similarly, the marketplaces are. So, there are indications and markets which are ultra-rare and where with the orphan drug vaccines, you will get some market exclusivity, whereas they are also marketplaces like in oncology, where for the given define indication, yes, it is an orphan disease, but as oncology is quite busy, and there are many companies and big players in that area. So, I would like to focus more on those orphan drugs in rare diseases, or even ultra-rare diseases, where there is a high unmet medical need. There is not yet a treatment as such also not a real treatment alternative; there’s almost just basic supportive care.

The second one is in terms of commercialization. What is the need for creating awareness or broadening awareness? To give you an example where it isn’t an aware awareness, let’s say cystic fibrosis or pulmonary dysfunction, which relates to CLPD. There might be already quite a lot of awareness or let’s say enzyme replacement therapy in terms of companies like now, Takeda and probably others have been working on this. Again, it’s giving you some assumption about what you need to consider in terms of, how aware are patients, physicians, or healthcare providers in general and peers about the disease or not and which efforts you need to plan for to increase awareness.

Finally, it is the number of patients eligible for treatment and the cost or the reimbursement you would like to accomplish with the very few patients you might be able to treat. There is a cornerstone which will also give you limitations in terms of resourcing. There is also saying that there are challenges because if you have very few patients to provide with your therapeutic option and the reimbursement there’s maybe some kind of limitations, then your business model has to be very robust and rational in terms of it. You achieve profitability in a decent time.

There’s also some warning and I’m just saying that sometimes there’s confusion that orphan drugs status provides you with market exclusivity for over 10 years, which saying that you would not face any competition and that is not true. You can have an orphan drug state, you can get a second orphan drug status for another drug as long as when you apply for the orphan drug status, you prove that your drug is much better than any existing available treatment or undisputed treatment in the future. I have a very recent example, I have been involved in launching an orphan drug in the ultra-rare ophthalmology disease space, LON, which stands for Leukemia Optic Neuropathy.

We had annual treatment costs of about EUR 50-70,000 depending on the country for an average of two years. So, it’s a total treatment costs of about EUR 100-140,000 for that treatment. Now gene therapeutic products, or ATMP has an orphan drug status already and is applying for approval, which should come in the next couple of months. For the very same indication, but as an ATMP, we can consider it’s one short application, for something around EUR 500,000. It shows you that there’s can be fierce competition and that your business models should also consider return on investment, which is not depending on 10 years of market exclusivity, but much earlier.

1.2. What are the biggest opportunities in the commercialization of orphan drugs?

Now, let’s take it in business scenarios, low awareness, ultra-rare indication, no existing therapy. So, what you need to do is, well, obviously create awareness and that is comprising all levels. It is patient, healthcare providers so HCPs and peers, and therefore there are different messages, but in principle you need to cover those target audiences. That is indeed a challenge because let’s start with patients, there might not even be a patient advocacy group existing, for example. So, you have no, let’s say spokesperson to talk to, just to patients which are around, and where the diagnosis may take place or not, or much too late.

It’s very difficult to reach them so you are sort of in the very beginning where you even have to support the first establishment of a patient advocacy group. For the physicians, that should be a little bit easier. You will have a separate consultancy project for KOLs, but I think that is part of a commercialization and pre-launch activity, which is very important that you reach out to them very early, to get their endorsement of what you are going to do. There is taking care about their demand, their needs, and it’s not just treating patients. It is for example, what is their budget process? What is their participation and the reimbursement. So, if you have, for example, an oral drug, and that is being prescribed, the physician may or may not get any reimbursement for the very cumbersome procedure of the diagnosis.

You might get reimbursement, but that reimbursement might be completely insufficient or might be regarded as, in comparison to the drug cost, it’s completely inadequate. So, physicians are complaining about it and that they need to provide their service, extraordinary focus and emphasis in terms of learning, getting diagnosis being done to the differential diagnosis, a lot of difficult and cumbersome procedures, for procedures are still the bottleneck in the process as it’s all starts with the diagnosis. So that is just an example, so to say, understand their needs, get them involved and get their support. Finally, there are also in terms of HTA processes, very much involved. The KOL or physician association need to submit or are being consulted by the health authorities to provide their own opinion about the treatment, about the number of patients, about where the diagnosis should take place.

If the treatment should be done at very specialized few centers or should be accessible at a broader level. So, for example, if you have a very decentralized healthcare system, like in Germany as a contrary to France, for example, where you have more centralized hospital structure. In Germany, it is currently a challenge for some of the new ATMPs, for example, spinal muscular atrophy, or for their IDCs, that the request by the governments, by the authority is just to open only very few centers that they need to take care about minimum number of cases throughout the year. So they look on quality control and assurance, and that might be a win-win between pharma and the center, because they don’t need to take care about too many physicians and accounts, but it might also limit the access to patients and therefore also the penetration, the rapidity of penetration and the reach in terms of how many patients you can reach.

Depending again about the structure and the countries, they may be accessible or not, or may have an opinion or not. For example, in Germany, many companies, they consult agency to do peer research. I sometimes think that it’s a waste of money because they always have an opinion that the price is prohibitive. The peers are not involved as a single payer as a single seek funds, but they have their association and take care about it, about pricing in the certain price negotiations. I think it’s much more important to get the endorsement by the physicians, by healthcare providers. So, the primary place, rather than on the peers is given that they need to pay.

So, that all should take place, I would guess one year before launch. That you start doing some of these activities and for all the analytics and the planning and about how the market is looking like you should, of course, start doing it earlier. So, let’s say minus 16 to 18 months before. I’ve also seen companies who start too late with that, and then they lack, the support and endorsement, they don’t get the right KOLs, or don’t have the right balance between the several KOLs who should be involved. That can give you some kind of exposure that you might feel you need to launch phase later.

Section 2: Emerging Trends

2.1. How will the R&D/Clinical development pipeline for orphan drugs change?

Firstly, the potential of developing orphan drugs is still huge. We estimate about 3000 or even more orphan indications of which we have about 180 launched orphans in a marketplace. Some of which are, as I mentioned before, maybe quite close, or even covering the same indication. So, we’re talking about 150, roughly of 3,000 indications. There’s an untapped opportunity there.

However, what is currently changing is that, as the percent spent in your overall healthcare spend, especially in the overall drug spend, is increasing and that is not only due to the oncology indication. These are usually now, as I mentioned before, should be excluded, to have a better discussion. If you take the true orphans outside of oncology hematology, the drug spend are also increasing. This is creating a lot of awareness at peers and also in the society that is very difficult for pharma to defend their business model about value-based pricing and explain a society that a one-time treatment for spinal muscular atrophy for a two year child or baby, is EUR 2 million or 3 million.

The budget impact is relatively smaller, even sometimes negligible, but it’s creating a lot of awareness. So, the reaction and the measures taken now by authorities, both from a regulatory point of view, as well as from a reimbursement peer point of view, is that the demand for convincing evidence and that the treatment results is sustainable. For example, one-time gene therapy is really a long-term benefit for the patients. This demand for evidence has increased already and it’s still increasing. That means that there is more increase for investment that could be post launch for registries, which are now can be mandated by authorities. There’s more need for evidence generation during the clinical studies.

If that is not possible, or they are very courageous in taking the 50 patients phase three clinical study into approval and get the EMA approval, they need to face that the at the local level, the authorities will not accept that just for launch maybe, but they would require a post-marketing, that can be registries or another phase, three trial, confirmatory trials, anything like that. There will also be pressure on pricing.

Of course, IRISYS is always the most stringent one, it’s leading the way. It’s difficult to describe here because those special prices are being negotiated and usually not being published, but I guess they are rejecting even drugs, even if this might be unethical, but just before, because of budgeting reconciliations. But this has also been the case now in other geographies, like Austria and Germany. Also, take the Switzerland example, there is a lag behind between the approval and full reimbursement of more than two years. Only 50% of the approved drugs get eventual reimbursement in Switzerland. You would consider Switzerland as a rich country with a premium healthcare system, which in general is true but you see that this kind of automatisms, which are used to in the past, and are not valid anymore.

2.2. What new types of financing will be required for future orphan drugs? What are the key opportunities?

Well, I’m not really the very high-level expert on venture capital and investments but there are programs like that. There are different ones that can be from even patient advocacy groups and in the US, they really invest in complete phase funds. They offer government investments, in Europe as well. I think that the COVID-19 vaccine program investment have shown that the potential of the European biotech industry it’s huge and can be better supported financially, and that there can be fantastic drug developments, that good events can come out of it. I think still this are a certain kind of initiatives. I think on a broad level where Europe is clearly lacking behind US is venture capital investments and risk capital from different sources. Taking maybe also the example of San Diego was never really successful in getting awareness with US investors.

I watch the Biotech news every day and, you look around on which companies they are news and where not, and you see sometimes they are not reader a screen. So, venture capital is still a limiting factor in Europe, and it can be done more. On the positive side, there are more and more structures, which help to support the industry associations and others. There’s much more awareness and they also try to leverage the BioNTech and core our story of course now.

2.3. What actions do you see large pharmaceutical companies taking towards their orphan drug product portfolio?

It’s a little bit of both although, I think the preferred model of the big pharma is simply to acquire the small company. I think there is nothing negative there and maybe sometimes it’s perceived as that, but I think that the environment on a campus or university close by, and all of it is very much facilitating and supporting, that early development in this breeding process. In the big companies, they have the more structured process, but less of risk-taking, they may be passionate in part, but I think that the kind of bureaucracy and processes and all of that, it’s not really helpful. So, I think when you see what has been the case in the last two years, I have seen very huge acquisitions, both at let’s say $1 billion level up to $7 billion dollar levels.

I was working at Celgene and 30 years ago it was a start-up and the big Celgene of five years ago, wasn’t big enough to avoid a merger or an acquisition by Bristol-Myers. You take Alexion, you take Synageva, etc. they all were very successful in developing an orphan drug over two decades, let’s say on average, which is a lot of time. Then finally, they are in the commercialization phase and they prove to be commercially either pre-launch or being commercially successful in the first to second year and then they are bought for tons of money. The huge biotech has a very clear understanding about MPVs and commercial success and therefore the investment is meaningful. So, they pay a lot of money, but they passed by the attrition factor of one in hundreds will not be successful.