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Incentives Drive Effort To Fight Rare Illnesses

A rare genetic disease called Fragile X syndrome — believed to be a leading cause of autism and mental retardation — is in the crosshairs at the Torrey Pines drug-development company Afraxis Inc.

Less than five miles away at Amylin Pharmaceuticals Inc. in University Towne Center, researchers are busy on a potential therapy for lipodystrophy, an extremely rare disease characterized by uncontrolled loss of fat tissue under the skin.

And just northeast in Sorrento Valley, Zacharon Pharmaceuticals Inc. is seeking to fill an unmet need for medicines that treat several very uncommon but fatal diseases known collectively as Gangliosidoses, which include Tay-Sachs and Sandhoff.

It’s not just local drug companies taking an interest in rare diseases. Big Pharma players such as New York-based Pfizer Inc., Paris-based Sanofi-Aventis and U.K.-based GlaxoSmithKline PLC also are lining up resources behind so-called “orphan” diseases that affect fewer than 200,000 individuals in the U.S.

‘Pure Economics’
“Almost everyone has an orphan angle today,” says Jay Lichter, president and CEO of La Jolla-based Afraxis and managing director at local venture capital firm Avalon Ventures.
Why so much attention on diseases that affect so few people? “It’s pure economics,” Lichter said.
The trend is fueled largely by the U.S. Food and Drug Administration’s many “breaks” for companies addressing rare diseases, which are mostly inherited conditions.
Not only does the government give grants and tax credits to drug developers, but it allows for smaller clinical trials, faster approval timelines, and seven years of marketing exclusivity for approved orphan drugs, according to the FDA.
“A new diabetes drug could cost $700 million or more” to develop, said Lichter, who also funded Zacharon through Avalon Ventures. “You can get an orphan drug approved for $30 million to $50 million and sell it for $200,000 to $300,000 per year. It’s big business.”
Although patient populations are smaller, insurance companies are willing to pay a premium for orphan disease treatments, especially given the fact that the disorders tend to affect babies and children, Lichter noted.

Collective Power
The FDA estimates that there are more than 6,000 orphan diseases, fewer than 10 percent of which have targeted therapies. Diseases include familiar names such as cystic fibrosis, Lou Gehrig’s disease and Tourette’s syndrome, as well as the unfamiliar: Hamburger disease, Job syndrome, and acromegaly — also known as “gigantism.”
Some diseases have patient populations of fewer than a hundred, which makes clinical trials a challenge, Lichter said. Collectively, however, orphan diseases affect as many as 25 million Americans, according to the National Institutes of Health, which is one reason why the FDA has made finding treatments for them a priority.
“It’s amazing how broadly they strike,” Lichter said. “Even though they’re rare, you can mention one of these diseases and probably find half a dozen people right here in San Diego who’ll raise their hand.”
Even widespread diseases such as cancer are becoming “orphanized” as scientists use genetic sequencing to discover unique biomarkers that segment the patient population into smaller subsets, Lichter said.

Grabbing Pharma’s Attention

At Zacharon, President and CEO Robin Jackman said the company is moving ahead on its small-molecule therapy for a group of extremely rare metabolic disorders known as Mucopolysaccharidoses, or MPS. “It’s a single new molecule that’s able to target multiple rare diseases,” he said.

MPS is a genetic condition that renders the body unable to produce specific enzymes. Zacharon’s investigational drug would treat MPS I, II and III. The combined incidence of those three diseases is approximately 1 in 35,000 births, according to the National MPS Society, which has provided funding to advance the drug program.

The program also has grabbed the attention of Pfizer’s Cambridge, Mass.-based Orphan & Genetic Diseases Unit, which in April agreed to pay Zacharon $210 million through a combination of upfront payments and research-and-development funding.

The funding boost from Pfizer has given Zacharon additional bandwidth to “pull some things out of the freezer that had been in there for a while,” Jackman said.

The company is looking to advance its Ganglioside Inhibitor Program, with a treatment for diseases such as Tay-Sachs, Sandhoff, AB Variant and GM-1, which have a combined incidence of 1 in 55,000.

Zacharon kicked off a series B round of financing in January, with the goal of raising $30 million to fund clinical development of the potential therapy.

“These are diseases that haven’t gotten a lot of attention in the past,” Jackman said. “But that doesn’t mitigate the fact that there is a very high medical need.”

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