With buyers demanding more evidence of the value products deliver, orphan diseases with relatively few existing treatments offer investors the opportunity to invest in orphan drug companies which should provide an above average return on investment. Buyers should continue to be willing to pay high price tags in orphan indications because there is nothing else available and the number of patients is so small that the overall impact on their budgets is negligible.
§ Picking the winners
We have identified two companies that are likely to be winners given their focus on orphan diseases. London-listed Summit Corporation (SUMM) is developing a drug for Duchenne Muscular Dystrophy (DMD) which can treat all patients. However, its market cap of £70m is a fraction of US peers (Sarepta, Prosensa) which are also developing a treatment for DMD but only for a limited proportion of the patient population.
ProMetic Life Sciences (PLI), a TSX-listed bioseparations company, is using its highly efficient plasma production platform to develop and commercialise drugs for several orphan diseases including IPF, AAT deficiency and T1PD.
Section from the report
Picking the Winners
In the world of affordability and efficiency, biotechnology companies are likely to succeed by:
Being prepared to demonstrate to buyers how their product will perform relative to the competition and current standard of care when it’s launched. This means investing in expertise, internal or external, to think through issues faced by buyers and reimbursement policies, and design trials appropriately.
Consistently focusing on indications such as orphan diseases that reduce development times and allow entry to market quickly followed by efforts to expand the label to broaden the patient populations.
Heavily utilising regulatory mechanisms designed to speed clinical development and FDA transit times.
There are a number of companies that meet the above criteria; we would like to highlight