A better fit? Biotech versus Big Pharma in orphan/rare disease drug research

Abstract

Biotech outperforms the multinational pharmaceuticals in the discovery and development of orphan medicines. This is an increasingly attractive area of biopharmaceuticals, and the innovation-led, indication-focused research and development culture of Biotech lends itself much more to the orphan space. Big Pharma is not wholly excluded from gaining the manifold commercial benefits of orphan drug development, however. Synergistic alignments for orphan programmes between Biotech and Pharma – through acquisition, new business unit creation and co-development – are becoming more common. The combination of cutting-edge Biotech research and the infrastructure of Big Pharma to push the orphan drug frontier further forward is positive news, not only for patients but also for the industry.

Keywords::

• biotechnology
• drug discovery
• orphan drugs
• pharmaceuticals

1. Big biotech, small pharma

Prior to, and in the 30 years since, the introduction of the Orphan Drug Act (1983), the biotechnology sector has led the charge in the discovery and development of often desperately needed therapies for rare and ultra-rare medical conditions, otherwise known as orphan diseases. Overall, the pharmaceutical industry has had much less of an impact – at the discovery stage – on the orphan landscape. ‘Big Pharma’ has been the driver in the development of only one or two of the current ‘best-selling’ orphan drugs (Glivec/Gleevec; Imatinib, Novartis and Tracleer, Roche).

2. Orphan drug legislation and the birth of biotech

‘Biotech’ as a niche form of biopharmaceutical organisation, distinct from its traditionally large Pharma cousins, was arguably born out of the need for the orphan therapies that were not forthcoming from larger, traditional pharmaceutical entities. A model for this of course is Genzyme, a company established on a lead clinical programme for an inherited genetic lysosomal storage disorder (Gaucher’s disease) that affects as few as 10,000 individuals worldwide. The US National Organization for Rare Disorders (NORD) was leading lobbyists for the introduction of the Orphan Drug Act. They claim that the American biotechnology industry is in fact a ‘child’ of this legislation, and their view is that the Act has generated a number of drug discovery and development companies that would otherwise not have been viable [1]. Bioentrepreneurs and funders alike have benefitted from the socioeconomic potential that the Orphan Act, and similar schemes worldwide, have opened up for therapies for rare and ultra-rare diseases. This is true not only for technologies developed de novo by Biotech but also for the product candidates they have fostered/adopted following rejection by large multinational pharmaceutical companies. NORD recognises that the Biotech industry has, since the Act was passed, delivered a number of ‘innovative products to market in the last decade for formerly untreatable diseases’.

3. The end of the ‘traditional blockbuster’ era?

Genzyme and the other Biotech orphan trailblazers began life at a time when the large multinational pharmas were primarily focused on the hunt for the next blockbuster. In traditional terms, blockbusters were defined as therapies/technologies with $1 billion plus per annum market potential set by high disease incidence and large patient numbers. Orphan conditions, in marked contrast, are defined as those affecting as few as 1 in every 2000 to 1 in every 200,000 individuals (in the USA, at least, or < 200,000 Americans). These provide relatively tiny patient pools that were not necessarily regarded as economically viable for the Big Pharma model of less expensive and largely traditional small molecule drugs for large numbers of patients. That was the ‘then’. In the ‘now’, the commercial potential of orphan therapies by far outweighs the perceived historical ‘barrier’ to Big Pharma of small patient numbers. Orphan drug research and development (R&D) is now the fastest growing component of the biopharmaceutical sector across both Biotech and large multinational pharma [2]. The key drivers for this evolution within the industry are the various regulatory and financial incentives provided by orphan schemes (including market exclusivity, patent life extensions, reduced regulatory fees and expedited regulatory review and clinical development timescales for orphan medicines) and the fact that orphan drug R&D programmes have lower cost burdens and lower attrition rates overall, higher probabilities of and more rapid regulatory approval and with small patient populations and prescriber/tertiary care centre pools, lower marketing costs [2-4]. This all adds to the revenue potential of orphan therapies, which is already significant because of the premium pricing they can warrant. Orphan drugs can, in fact, be considered among the ‘new blockbusters’. The top 10 bestselling orphan drugs have all achieved peak global sales revenues in excess of $1 billion and yet are prescribed to a fraction of the patients served by the traditional mass-market blockbusters with equivalent revenues [4,5].

4. Culture is key

Big Pharma obviously acknowledge the financial potential afforded by orphan therapies and the multiple additional benefits of the rare disease research space, so why are more of the large multinationals not a major force in this sector? Biotech continues to dominate, for the present at least, in the front-end discovery and early clinical development of innovative technologies for orphan diseases. Is this likely to ever change? Biotech R&D culture is undoubtedly distinct from that of traditional Big Pharma. Built on more informed or rational drug design principles with much more of an indication-specific focus, Biotech is better suited in many ways to the specific R&D efforts required for successfully developing orphan products (often more expensive, first in class and biological therapies for very small numbers of patients). Biotechs are not, or are generally, less afraid of a single disease or single molecular entity focus versus establishing a broader portfolio. This business model also lends to success in the repurposing/reprofiling of a single therapy for multiple orphan indications (15% of orphan drugs are approved for more than one orphan indication [2]) and/or establishing franchises built around the one (or few) compound(s) they have developed (such as Genzyme and its glucerase variants for Gaucher’s disease and Raptor Pharmaceuticals with cysteamine for cystinosis). The more orphan-friendly of the large Pharmas are not to be excluded here; Novartis with its tobramycin franchise for cystic fibrosis is an example.

5. A new form of synergy for biotech and pharma

Big Pharma is unlikely to be the main innovation engine for the next generation of orphan technologies. Nonetheless, some multinationals for whom orphan drugs have not historically been a ‘fit’ are moving into the rare disease space in a way that allows them to benefit very rapidly and for the sector as a whole to grow. The routes that larger pharmaceutical companies are taking to do this (acquisition, generation of distinct business units with an orphan focus, etc.) also demonstrate that they acknowledge their distinct role from Biotech in orphan medicines R&D. Biotech’s more focused, innovation-led drug discovery strategies are, and are likely to remain, the key to generating the next generation of orphan therapies. Big Pharma can still capitalise and play a role here, however. The acquisition of Biotechs and allowing them to continue as wholly separate entities operationally (allowing the innovators to largely continue doing what they do best and how they have always done it) is an ‘instant’ means to add orphan programmes to the portfolios of multinational pharmas (Genzyme by Sanofi-Aventis, ViroPharma by Shire, Genentech by Roche, etc.). The establishment of separate orphan disease/drug business units within some of the larger pharmaceutical players (e.g., GSK and Pfizer) is another mode by which Big Pharma can operate in the orphan space. This latter option provides an R&D environment for the development of internally generated orphan technologies even if noncore to the parent Pharma company, or a vehicle into which orphan drugs can be partnered/licensed.

These relatively new pathways to the orphan domain for Big Pharma are not about trying to replicate the very different model through which Biotech continues to drive innovation in rare disease research. Instead, they provide access to the development, manufacture and even marketing capabilities that multinational pharmaceutical entities can provide for new medicines post discovery. That said, with very few patients affected per orphan/rare disease, sales and marketing complexity and costs of orphan therapies are such that the Big Pharma infrastructure may not always necessarily be required for market entry of these drugs. Biotech can potentially ‘go it alone’, market and distribute its own rare disease therapies rather than being reliant on more traditional alliances (licensing, co-development, etc.) with multinational pharmaceutical entities. As such, any partnership for an orphan therapy on these terms has to be very much worth Biotech’s while and be based on a broader set of benefits.

6. An expanding commercial opportunity with significant benefit potential for patients

Continued unmet medical need, a more attractive regulatory environment (e.g., the FDA’s Breakthrough Designation programme) and multiple commercial growth drivers will ensure that orphan drug R&D continues to be more of a focus for Big Pharma and, of course, remain at the core of Biotech. Both ends of the biopharmaceutical industry spectrum will continue to build on the trend of commercial synergies wherein Biotech leads in the discovery of novel orphan therapies, but with the support (through co-development, co-marketing, etc.) of, or even as a component part of, larger pharmaceutical organisations. This has to bode well for the rare/ultra-rare disease space and the potential for the development and successful approval of more, very much needed orphan therapies.

Declaration of interest

The author has no conflict of interest and has received no payment in the preparation of this manuscript.