It was not long ago that Alembic Pharma informed the Bombay Stock Exchange that its associate company, Rhizen Pharmaceuticals S.A. secured the orphan drug designation for tenalisib from the U.S. FDA. Tenalisib is a selective and orally active dual PI3K delta/gamma inhibitor, for the treatment of peripheral T-cell lymphoma.

The announcement sounded special to the investors of the mid-cap firm from Vadodara, in the western Indian state of Gujarat, because the news came at a time when the industry is riding a wave of orphan drugs. Drugs for uncommon conditions that usually affect a small number of patients have been historically neglected by drug majors. The so-called ‘orphan drugs,’ however, sprung to popularity in recent years whan the top regulators started incentivizing their development.

The FDA provides 7-year marketing exclusivity, tax credits for clinical development costs, exemption of filing fees and assistance during the development process. Whereas orphan drugs get 10 years of exclusivity in Europe, plus extra time for pediatric indications. In addition to a quick path to regulatory approval, orphan drugs have an opportunity to generate convincing clinical safety and efficacy data with very limited patient populations, compared to those drugs addressing diseases which are much more common, experts point out. 

Smaller trials can mean significant development cost savings, as well. Recent analyses of firms with orphan products came out with the finding that they are more profitable than those without. Of late, applications seeking marketing authorizations for orphan drugs have risen to unprecedented levels. The FDA granted approval for 174 drugs with orphan indications during the two year period starting from 2017. The number is probably the highest granted by the agency since the enactment of the Orphan Drug Act in 1983.

Inevitably, the orphan drug market is set for steady and inexorable growth. According to a report by Evaluate Pharma, sales of orphan drugs are expected to reach $224 billion by 2024 growing at a 12% CAGR through the year. “Growth rates approximately double those of the overall prescription drugs market and the mean cost per patient per year of the top 100 orphan products in the U.S. hitting $150,854 in 2018 versus $33,654 for a non-orphan drug, explain much of the allure,” the report says.

The acquisition of orphan drug firms will dominate the M&A strategies of bigger firms. The pharma analysis group points to Roche’s acquisition of Spark Therapeutics for $4.8 billion in February as exemplifying the trend. Spark’s Luxturna, the first approved gene therapy for inherited retinal disease, has a current list price of $425,000 per eye.

Novartis reached a $8.7 bilion deal to buy AveXis and its spinal muscular atrophy candidate, Zolgensma in April last year. Pfizer announced an agreement to acquire all the shares of Therachon Holding AG, in May. Therachon’s investigational TA-46, a human fibroblast growth factor receptor 3 for the treatment of achondroplasia, has received Orphan Drug Designation from both the EMA and FDA.

India, reportedly, has a higher rare diseases population than the world average. It is estimated that the country has over 70 million patients with any of 7,000 plus diseases classified under rare or uncommon conditions. The health ministry is in the process of framing new rules. The ‘National Policy for the Treatment of Rare Diseases 2017,’ which was in force, has been kept in abeyance until the new policy is issued, the government said.

With a rare disease population which is more than that of the U.S. and EU combined, India represents a lucrative market to developers and pharma firms looking to expand their orphan operations, according to the Organization for Rare Diseases India (ORDI), a national non-profit organization representing the patients and other stakeholders of rare diseases in India.
The need for orphan treatments is huge, and the awareness about the diseases is increasing. Drug firms in India are receiving no formal incentives from the government and hence patients with rare diseases have to rely on imported drugs. These treatments are often unaffordable. So, besides enacting an orphan drugs legislation with provisions for incentives for orphan drug developers, the government needs to create a framework that is conducive for the manufacturing of orphan drugs in India, according to ORDI.

As part of the initiative to have a comprehensive strategy to deal with the rare diseases burden, the government has exempted drugs that are used for treatment of a disease that qualifies as an orphan disease from price control, through an order in January. The orphan drug exemption is expected to encourage domestic companies to develop drugs for orphan diseases and to foreign pharmaceutical companies to market their drugs in India. However, the health ministry is yet to come out with the criteria that will apply to determine an orphan disease. Experts aver that this may lag things further due to the absence of disease prevalence data.