THE LAST WORD

By Roberto Bellini

RAISING ORPHANS

Roberto Bellini, President and CEO, BELLUS Health Inc.

These days, it seems like the word on everyone’s lips is ‘orphan’. Whether it’s orphan pricing, orphan market or orphan drug development, it seems like there’s nothing hotter than orphan drugs right now.

There’s good reason for that. Orphan drugs are treatments for rare diseases and conditions, and while historically they have not had an extremely high profi le with investors (or big pharma for that matter), some recent successes have garnered sizeable attention. Sanofi ’s acquisition of orphan-drug developer Genzyme in 2011 will probably be remembered as the defi ning moment that made orphan drugs mainstream, however several others have also led the way. This includes the stunning sales success of Shire’s enzyme-replacement franchise and Alexion’s half billion-dollar drug Soliris (in PNH, an indication that only has 5,000 patients). We have also seen some Canadian success in the fi eld with investors cashing in on the acquisition of Enobia for $500 million last year. Other big-pharma companies have also jumped on board, with Pfi zer and GSK both recently starting dedicated orphan drug business units. As successes have mounted, the growth of the orphan space has been signifi cant. In 2001 just 78 drugs with FDA orphan designation were in development. By 2011, that number climbed to 203, a 160 per cent increase.

Orphan drug status was fi rst legislated in the United States in 1983 to spur the development of new drugs for rare diseases, defi ned as an indication with fewer than 200,000 patients. Europe, Japan and Australia soon followed suit (Canada has disappointedly not enacted similar rules). The benefi ts conferred by legislation provided the backbone to the eventual growth of this specialty area. The most important benefi ts are fast-track status at the FDA, a priority review and the assurance of market exclusivity for a designated period following launch. Regulators work closely with orphan drug companies to tailor development programs that are often less stringent in terms of demonstrable effi cacy and safety evidence required for marketing approval.

Such regulation provided the framework for growth, but it was only really in the mid-2000s that the market began catching up with the opportunity. Industry, previously focused on generalized therapies for mass-market indications, saw a crucial and lucrative new branch emerge. Orphan drugs are inherently targeted to niche indications. These orphan indications usually have several important criteria including homogeneous niche-patient populations and high unmet medical need. This scenario allowed the chance to show marked improvement in patient outcomes and quality of life, providing the basis for higher pricing, faster market penetration and larger margins. Even with only thousands of patients to treat, orphan indications could realize substantial returns.

The business plan sounds easy, right? Develop a cure for a rare and deadly disease, get the product approved on the basis of a small study, and charge hundreds of thousands of dollars for the results. In fact, the road to orphan drug approval is wrought with challenges. Little precedent exists to draw upon when building the pre-clinical and clinical trials necessary for the approval process. Designing and conducting clinical studies of 150 patients for an orphan disease can be as challenging as conducting a study in a large indication (eg: diabetes) with thousands of patients. Lengthy discussions with regulators can ensue over the clinical validity of endpoints in diseases where no gold standard exists. Orphan diseases are often not well understood from a mechanistic perspective as well adding further development risk.

So while orphan drug development offers the potential for great returns, it also holds considerable risk. At Bellus, we’re developing an orphan drug candidate called KIACTA™ for AA amyloidosis, a disease that affects kidney function, rapidly leading to dialysis and death. There are approximately 35,000-50,000 AA Amyloidosis patients in the United States, Japan and Europe for whom KIACTA™ is designed to signifi cantly delay kidney function deterioration. This delay, shown in our fi rst Phase II/III study , is the pharmaco-economic rationale driving market opportunity.

It has taken us more than ten years to reach this point. Along the way we have built a wealth of experience blazing a trail in this new indication, and we are now at the last step to receiving approval for KIACTA™, recruiting patients in a Phase III Confi rmatory Study. Drugs like KIACTA™ hold tremendous potential value because they can mean everything for patients. It has been a long road, but never before has the orphan drug space been as exhilarating as it is now. We’re glad to be part of it.

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