Strategy Focus: Big Pharma and Rare Diseases

By Patricia Van Arnum - DCAT Editorial Director

September 29, 2021

AstraZeneca’s $39-billion acquisition of Alexion Pharmaceuticals earlier this year was yet another move by a large bio/pharmaceutical company to strengthen its portfolio in drugs to treat rare diseases. What are other deals thus far in 2021 among the large bio/pharma companies in rare diseases?

Making moves in rare diseases

AstraZeneca’s $39-billion acquisition of Alexion Pharmaceuticals, a Boston-based bio/pharmaceutical company focused on rare diseases, which was completed in July (July 2021), marked AstraZeneca’s entry into rare diseases and was the latest high-profile move by a large pharma company to create or build its position in rare diseases. With the closing of the deal, AstraZeneca formed a dedicated rare-disease group, Alexion, AstraZeneca Rare Disease, which is headquartered in Boston.

The acquisition gives AstraZeneca a further scientific presence in immunology and Alexion’s complement-biology platform and pipeline focused on rare diseases. Alexion is focused on complement inhibition for immune-mediated rare diseases that are caused by uncontrolled activation of the complement system, part of the immune system. The complement system plays an important role in many inflammatory and autoimmune diseases across multiple therapy areas, including hematology, nephrology, neurology, metabolic disorders, cardiology, ophthalmology, and acute care.

Alexion posted 2020 net product sales of $6.07 billion. Its top-selling product is Soliris (eculizumab), which is approved to treat two rare blood disorders: (1) paroxysmal nocturnal hemoglobinuria (PNH), a disease that is characterized by destruction of red blood cells, blood clots, and impaired bone marrow function and (2) atypical hemolytic uremic syndrome (aHUS), a disease that causes abnormal blood clots to form in small blood vessels in the kidney. The drug posted 2020 revenues of $4.06 billion and accounted for 69% of the company’s 2020 net product sales. Soliris faces near-term biosimilar competition, and its successor product, Ultomiris (ravulizumab), which was approved by the US Food and Drug Administration in 2018 to treat PNH and in 2020 for aHUS, posted 2020 net sales of $1.08 billion and was Alexion’s second largest selling product in 2020.

In 2020, Alexion completed two acquisitions to add to its commercial portfolio and pipeline. In June (June 2020), Alexion completed its $1.4-billion acquisition of Portola Pharmaceuticals, a South San Francisco-based commercial-stage bio/pharmaceutical company focused on rare diseases. Portola’s lead commercial product is Andexxa/Ondexxya [coagulation factor Xa (recombinant), inactivated-zhzo], a Factor Xa inhibitor reversal agent, which reverses the anticoagulant effects of Factor Xa inhibitors, rivaroxaban and apixaban, in severe and uncontrolled bleeding. In January (January 2020), it completed its $930-million acquisition of Achillion Pharmaceuticals, a Blue Bell, Pennsylvania-based clinical-stage bio/pharmaceutical company focused on developing oral small-molecule Factor D inhibitors for certain rare diseases.

AstraZeneca’s Alexion further added to its rare-disease portfolio this week (September 27, 2021) by exercising its option to acquire all remaining equity in Caelum Biosciences, a Bordentown, New Jersey-based bio/pharmaceutical company focused on rare diseases. Caelum's lead asset is CAEL-101,for treating light-chain amyloidosis, a rare disease in which misfolded amyloid proteins build up in organs throughout the body, including the heart and kidneys. In 2019, Caelum and Alexion first entered into a collaboration whereby Alexion acquired a minority equity interest and an exclusive option to acquire the remaining equity in Caelum. Upon closing the acquisition, which is expected to take place on October 5, 2021, Alexion will pay Caelum the agreed option exercise price of approximately $150 million, with the potential for additional payments of up to $350 million upon achievement of regulatory and commercial milestones.

Market opportunities for orphan drugs

Orphan drugs are defined as prescription medicines developed for rare diseases and conditions, which, in the US, affect fewer than 200,000 people, or, in the European Union, affect 5 per 10,000 people or fewer. The share of new drug approvals worldwide for rare diseases doubled from 29% of all approvals in 2010 to a recent high of 58% in 2018, according to a 2019 analysis by the Tufts Center for Drug Development. Although a niche market, orphan drugs provide bio/pharmaceutical companies certain incentives to develop these drugs. The Orphan Drug Act, which was enacted in the US in 1983, provides special status to a drug or biological product to treat a rare disease or condition. Orphan designation qualifies the sponsor of the drug for various development incentives, including tax credits for qualified clinical testing, certain exemptions from prescription-drug user fees, and incentives for market exclusivity.

In examining approvals of new molecular entities (NMEs) by the US Food and Drug Administration’s Center for Drug Research and Evaluation (CDER) from 2015 to 2020 shows the increasing share of orphan drug approvals in recent NME approvals. Between 2015 and 2019, orphan drug approvals accounted for between 39% and 58% of NME approvals by the FDA’s CDER. In 2020, orphan drugs accounted for 58%, or 31 of the 53 NMEs approved by the FDA’s CDER. In 2019, orphan drugs accounted for 44%, or 21 of the 48 NMEs approved by the FDA’s CDER and 58%, or 34 of the 59 NMEs approved in 2018. Between 2015 and 2017, orphan drugs NME approvals averaged 42% of NME approvals by the FDA’s CDER, which amounted to 39% of NME approvals in 2017, 41% in 2016, and 47% in 2015.

These trends point to an important development in the pharmaceutical market: rare disease drug approval rates in the US are now approaching non-rare drug approval rates, according to a 2019 study by the Tufts Center for Drug Development study. On a market basis, a recent analysis by Evaluate Ltd., the Orphan Drug Report 2019 , shows strong growth for the orphan drug market, which it defines as those products with orphan-drug designations in the US, Europe, or Japan. It projects worldwide orphan-drug sales to total $242 billion in 2024 with a compound annual growth rate of orphan drugs between 2018 and 2024 of 12.3%, which represents approximately double the growth rate of that of the non-orphan drug market. It projects that orphan drugs will represent one-fifth (20.3%) of worldwide prescription-drug sales by 2024. The orphan drug pipeline is anticipated to contribute $187.7 billion in sales by 2024, which represents 35% of the combined forecast for all pipeline products.

Recent deals

Thus far in 2021, several of the pharmaceutical majors have made acquisitions or partnering deals to strengthen their positions in rare diseases. Highlights are outlined below.

Roche. Last month (August 2021), Roche and Shape Therapeutics, a Seattle, Washington-based company developing RNA technologies for gene therapies, formed a multi-target collaboration and license agreement, worth up to $3 billion, to advance adeno-associated virus (AAV)-based RNA-editing technology to develop gene therapies in neuroscience and rare disease indications. Under the partnership, Shape will apply its RNA-editing platform, RNAfix, and potentially use its AAVid technology platform for tissue-specific AAVs for developing gene therapies for certain targets in the areas of Alzheimer’s disease, Parkinson’s disease, and rare diseases. Shape will conduct preclinical research to identify and deliver development candidates discovered by RNAfix and, potentially, AAVid, Shape's capsid discovery platform. Roche will be responsible for the development and global commercialization of any potential products resulting from the collaboration. Under the agreement, Shape is eligible to receive an initial payment as well as development, regulatory, and sales milestone payments, potentially exceeding $3 billion in aggregate value. Shape is also eligible to receive tiered royalties on future sales of products resulting from the collaboration.

Novo Nordisk. In July (July 2021), Novo Nordisk agreed to acquire from Prothena, a Dublin, Ireland-based bio/pharmaceutical company, PRX004, an anti-amyloid immunotherapy, and Prothena’s broader ATTR amyloidosis program, in a $1.2-billion deal ($100 million upfront and undisclosed development and sales milestones). ATTR amyloidosis is a rare, progressive disease characterized by the abnormal buildup of amyloid deposits composed of misfolded transthyretin protein in the body’s organs and tissue, most commonly in the heart and/or nervous system. PRX004 is a Phase II-ready anti-amyloid immunotherapy designed to deplete the amyloid deposits that are associated with the disease pathology of ATTR amyloidosis. Under the purchase agreement, Novo Nordisk acquires Prothena’s wholly owned subsidiary and gains full worldwide rights to the intellectual property and related rights of Prothena’s ATTR amyloidosis business and pipeline. Prothena is eligible to receive development and sales milestone payments totaling up to $1.2 billion, including $100 million dollars in upfront and near-term clinical milestone payments. Novo Nordisk will initially focus on the clinical development of PRX004 in ATTR cardiomyopathy, an underdiagnosed and potentially fatal form of ATTR amyloidosis characterized by build-up of amyloid deposits in cardiac tissue.

Takeda. Earlier this year (2021), Takeda formed a pact, worth up to $856-million ($196 million upfront and $660 million in milestones), to acquire the global rights of soticlestat, a treatment for rare pediatric epilepsies, from Ovid Therapeutics, a New York-based bio/pharmaceutical company focused on rare diseases.

The companies had previously formed a collaboration for rare pediatric epilepsies in 2017. Under the new exclusive agreement, all global rights to soticlestat will go to Takeda. Takeda assume sole responsibility for further worldwide development and commercialization, and Ovid is entitled to milestone and royalty payments upon regulatory approval and commercialization of soticlestat. Soticlestat is a cholesterol 24-hydroxylase (CH24H) inhibitor for treating developmental and epileptic encephalopathies, including Dravet syndrome and Lennox-Gastaut syndrome.

Last month (August 2021), Takeda also formed a global collaboration and license agreement with Genevant Sciences, a Vancouver, British Columbia, Canada-based bio/pharmaceutical company for the development and commercialization of nonviral gene therapies to treat up to two undisclosed rare liver diseases, in a $303-million deal. This is the second collaboration between Genevant and Takeda, following an earlier 2021 agreement to develop nucleic acid therapeutics directed to specified targets in hepatic stellate cells to treat liver fibrosis. Under the new agreement, Genevant is eligible to receive up to $303 million in upfront and potential milestone payments, plus royalties on future product sales. Takeda has exclusive rights to use Genevant’s lipid nanoparticle technology in the development and commercialization of specified nonviral gene therapies for up to two undisclosed rare liver diseases.

Rare diseases is one of four targeted therapeutic areas for Takeda, a position it strengthened with its $62-billion acquisition of Shire, a deal that was completed in January 2019. With the acquisition of Shire, Takeda gained a position in rare diseases, an area that Shire strengthened through its $32-billion acquisition in 2016 of Baxalta, the bio/pharmaceutical company spun off from Baxter Healthcare.