Msg 163441 of 204590 at 10/12/2011 9:56:13 AM by
Strong Buy Interesting Leerink report on why Orphan Drug companies (think CELG) are the "Golden Child of Biotech"
Huge 64 page report - here is summary. CELG is fiting on all cylinders and is in the right business - orphan cancer drugs and owns 100% of the rights of their drugs just as MAJOR markets not available to DNA when it hit 100 billion market cap - Turkey, Russia, Poland, Mexico, Brazil and of course China....
October 12, 2011
Reason for report:
Future of Orphan Drugs: The Golden Child of Biotech
Bottom Line: We believe that orphan drugs have advantages over
non-orphan "mass-market" drugs, providing unique opportunities
for companies and investors.
We have found that orphan drugs have
faster development time lines, lower R&D expenses, and a higher
likelihood of clinical and regulatory success. Once on the market, they
tend to have less competition, lower marketing costs, and a longer
life-cycle with less risk of generic erosion. Orphan drug products are also
generally more innovative than non-orphan drugs as evidenced by a high
number of new molecular entities (NMEs).
As a result, orphan drug company stocks have outperformed their
mass-market drug company peers and benchmark indices over the
past 10 years.
The stocks of classic orphan companies have done the
best, whereas cancer and MS orphan companies appear to have different
competitive factors influencing their performance. In this report, we outline
10 factors of interest for investors in orphan drugs: Stock performance,
business models, regulatory hurdles, clinical success, launch
performance, large pharma interest, geographic considerations, pricing
and reimbursement, future growth trends, and upcoming FDA guidance.
Within our coverage universe, we believe AEGR, BMRN, FOLD and
UTHR are poised to benefit from clinical & regulatory developments.
We include a compendium of other interesting public and private
companies in this report to reference as well. For AEGR, which expects to
file the NDA/MAA for lomitapide in 1Q12, we see encouraging precedent
from the approval of other orphan drugs on the basis small uncontrolled
data sets, suggesting that a 23-patient single-arm open-label trial could be
sufficient. We believe BMRN has multiple exciting pipeline opportunities
such as GALNS for MPSIVa, which is expected to report Phase III data in
late 2012, and FOLD has designed its Phase III for miglastat to maximize
the likelihood of successful data in mid-2012. UTHR has demonstrated
mixed clinical data; however, we believe it can continue to execute well on
the regulatory/commercial front as it has historically for the inhaled and
SQ forms of Remodulin, which faced uncertain odds of approval.
Release of FDA guidance no later than 12/27/11 on the
requirements for orphan drug approval could potentially remove
another layer of uncertainty
for innovators and investors, and solidify
orphan drugs as a core place to invest in health care
. Recently, the
National Organization for Rare Disorders (NORD) submitted a citizen
petition (CP) to the FDA requesting "that a documented policy be
established regarding the review of potential treatments for people with
rare diseases." NORD requests that the FDA's guidance explicitly include
"a statement that it will now be FDA official policy to afford special
to the regulatory review of submissions for all orphan drugs."