NEW YORK—Small market, big money. That’s the word from business intelligence company Thomson Reuters about LSDs.
No, not the psychedelic drug, but rather a set of orphan diseases—ultra-orphan diseases actually, each of which occurs in fewer than 10,000 people worldwide—called lysosomal storage disorders (LSDs).
As noted in the Thomson Reuters Cortellis Competitive Intelligence report released in August under the title “Lysosomal Storage Disease: An Example of a Lucrative Ultra-Orphan Market,” the pharmaceutical industry has shown an increasing interest in developing drugs for rare, orphan diseases. Author Ulrike Jahnke wrote: “Despite the very low prevalence of these conditions, therapies for ultra-orphan drugs have yielded high returns for the developing companies, as exemplified by Genzyme’s blockbuster Cerezyme (imiglucerase) for the ultra-rare Gaucher disease.”
The Thomson Reuters report asserts that the LSD market specifically is an example of the market opportunity of targeting such ultra-orphan treatments.
Until the U.S. Orphan Drugs Act in 1983 came around, later followed by laws of a similar flavor in Japan in 1997 and Europe in 1999, pharma companies weren’t all that interested in pursuing R&D on therapies for rare diseases with a highly unmet medical need, because they seemed poor investments from a corporate standpoint. These new laws provided incentives, including tax credits for the costs of clinical research, extended marketing exclusivity compared with non-orphan drugs, R&D grants and high rates of regulatory success—all of which has made pharma come to see revenue potential in orphan drugs, wrote Jahnke in the Thomson Reuters report; she added that “a previous analysis by Thomson Reuters determined that orphan drug development is now an economically viable strategy for pharma companies.”
The profitability of focusing on ultra-orphan diseases is highlighted, according to Jahnke, by Genzyme’s enzyme replacement therapy (ERT) Cerezyme and its nonengineered predecessor Ceredase (alglucerase) for Gaucher disease type 1, which together brought Genzyme revenue of more than $4 billion within a decade of Cerezyme’s launch in 1994. Cerezyme reached blockbuster status with sales exceeding $1 billion in 2006; sales subsequently peaked at about $1.2 billion in 2008 and are still forecast to top $1.2 billion in 2018, according to Thomson Reuters Cortellis Competitive Intelligence. Gaucher disease belongs to the group of the ultra-rare LSDs, and the launch of Cerezyme was followed by several other successful market entries for LSDs.
As noted by Jahnke, LSDs are generally classified by the accumulated substrate and include the sphingolipidoses, mucopolysaccharidoses, lipidoses, glycogen storage disorders, lysosomal transport diseases and oligosaccharidoses, among others. The incidence of individual LSDs ranges from one in 40,000 live births for Pompe disease to one in 4.2 million live births for sialidosis, with the majority affecting fewer than one in 100,000 live births, although some are more frequent in specific populations. Taken together, LSDs affect about one in 7,700 live births.
“The age of onset of classical LSDs is infancy and childhood, although adult-onset variants also occur, with the clinical manifestations ranging from severe debilitating lethal diseases in early infancy to attenuated presentations in late adulthood,” Jahnke noted. “The prognosis for most LSDs is very serious.”
Since the launch of Ceredase and Cerezyme, another 13 orphan drugs for LSDs have entered the market, targeting 10 different LSDs. The majority of the therapies are ERTs, whereby the deficient enzyme is replaced by intravenous administration of a functional exogenous enzyme. The combined sales revenue of the 10 currently available ERTs was about $4 billion in 2013 and is forecast to reach nearly $6.4 billion in 2019.
More than half of these products are expected to rake in revenues of more than $500 million each annually in 2019.
However, while there is clearly a spike in interest by pharma to attack LSDs, the majority of these diseases still lack effective treatment options, meaning that there are several untapped markets in addition to opportunities for rivals to one-up any existing therapies for LSDs.
The question is, are these markets attractive enough? According to Jahnke in the Thomson Reuters report, “In addition to the incentives driving R&D for orphan drugs, several commercial drivers make development of orphan drugs attractive, such as faster uptake and lower marketing costs, as well as premium pricing. In terms of pricing, ultra-orphan drug developers in particular can set ultra-high prices in order to recoup R&D expenditure from the small target populations; high pricing is also supported because biologics (for the ERTs) are more expensive to produce and payers are reluctant not to cover such ultra-rare treatments because of the significant unmet medical need.”
“An inverse correlation between drug price and the prevalence of disease has been proposed, with the treatment being more expensive the rarer the disease,” she added. “The commercially available ERTs for LSDs are among the most expensive drugs on record. However, the most expensive of them, Vimizim, at $380,000 per year, is still topped by Alexion’s Soliris (eculizumab), another ultra-orphan drug for the ultra-rare diseases paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome, which is priced at $440,000 per patient per year in the U.S. This is in stark contrast to the example of the larger market of hepatitis C (170 million patients), for which Gilead’s Sovaldi (sofosbuvir) has received bad press due to its $84,000 per treatment price.”
Pharma R&D productivity not in decline, according to Thomson Reuters
PHILADELPHIA—The Intellectual Property and Science business of Thomson Reuters in September released its annual synopsis of pharmaceutical industry trends in its “2014 Pharmaceutical R&D Factbook,” compiled by CMR International, a Thomson Reuters business and provider of global pharmaceutical R&D performance metrics.
The report found a number of positive trends across the biopharmaceutical landscape—including an all-time high in pharmaceutical sales and an increase in new molecular entities (NMEs) and in drugs successfully completing late-stage clinical trials—that contradict industry perceptions of a decline in R&D productivity.
- Global pharmaceutical sales reached an all-time high of approximately $980 billion in 2013 and are expected to rise to $1 trillion this year. However, the rate of growth declined in 2013 compared to previous years due to the expiration of patent protection on a number of blockbuster drugs in markets dominated by lower-cost generic equivalents.
- Contrary to the gloomy trend FDA NME approval data has projected over the past year, the number of NME first-world launches in 2013 was the third-highest in the last decade, underscoring the industry’s focus on developing brand new entities on a global scale. Approximately half of all of these drugs were specialty indicated for the treatment of cancer, pulmonary arterial hypertension and HIV.
- Anticancer development continues to attract the highest amount of investment across all therapeutic areas, with the majority of recent approvals receiving Orphan Drug status from the FDA.
- Failing “fast and cheaply” is catching on. There has been a decline in pipeline volumes and success rates in early clinical development phases, yet there is a trend in stable success rates across the later phases. This indicates that the industry is recognizing drugs that won’t be successful early in the development process, which is increasing the success rate of more advanced drug candidates.