Investment Pros Remain Bullish on Orphans

October 27, 2014
Casey McDonald

Casey McDonald is Senior Editor, Pharmaceutical Executive.

Pharmaceutical Executive

An illustrious panel of investment professionals spoke optimistically on the orphan disease space in spite of concerns surrounding escalating drug prices in specialty pharmaceuticals.

An illustrious panel of investment professionals spoke optimistically on the orphan disease space in spite of concerns surrounding escalating drug prices in specialty pharmaceuticals.

The group consisting of executives from investment banks, hedge funds, venture capital firms and biopharma companies spoke to the National Organization for Rare Disease (NORD) at its s Rare Diseases and Orphan Products Breakthrough Summit in Alexandria, Virginia on Wednesday last week.

Access to capital could not be better for companies developing for orphan indications, said an executive in J.P. Morgan’s Healthcare Investment Banking Group. Capital markets for rare diseases have been very fruitful as its an area where you get answers sooner with real inflection points and tangible timelines.

The panel could not avoid the topic of escalating specialty drug prices and the potential that orphan drug development may cease to be as profitable if payers take a stand.

Payers downplay the impact of orphan diseases to their bottom line because the patients are by definition, so rare, noted a Deerfield Management executive.

However, just a few hours before the panel of investment professional convened, FDA Commissioner Margaret Hamburg gave a keynote speech highlighting the fact that although orphan diseases affect small patient populations, there are approximately 7,000 orphan diseases and potentially 30 million potential patients in the US.

30 million patients is a scary figure, said the Deerfield representative. Regardless, society needs to reward rare disease drug development.

New treatments that offer a cure compared to chronic therapy will also lead to some dramatic changes and substantial prices. But payers are going to evolve, said J.P Morgan’s delegate.

The group ended its panel addressing what patient advocacy groups can do to further draw investment dollars. Bringing the patients voice to bear on clinical trial design is crucial, specifically in selecting approvable endpoints, the panel resoundingly agreed.

Panel members elaborated that even if a proposal has a druggable target and a good looking treatment, they won’t move forward with an investment unless the indication has an agreed upon approvable endpoint for trial design.

Doctors, researchers and patients come to the table with investors with a high level of experience and passion. According to Deerfield, “We deal with passionate people on a daily basis and try to come to understand whether their passion is based in good science that can become translational.”

 

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