Rare diseases

Not long after the presidential election passed, a new wave of uncertainty hit pharma — this time regarding the policy shifts brought on by the change in leadership.   

At this year’s J.P. Morgan Healthcare Conference in San Francisco, PharmaVoice asked several industry leaders about the critical policy developments they’re tracking in 2025, many of them beating the same drum. With president-elect Donald Trump back in the White House, executives want to know how his picks for top agency positions will impact pharma and if the industry now has a better shot at scoring the changes to the Inflation Reduction Act they’ve been clamoring for.

“One of the biggest questions in the industry is about the new administration, how the IRA is going to evolve and if small molecules are going to be incentivized,” said Catherine Owen Adams, CEO of Acadia Pharmaceuticals, a biopharmaceutical company focused on neuroscience. “I feel very positive we can work with the new administration [to discuss] why some parts of the IRA need to be amended.” 

But the IRA isn’t the only regulatory cloud hanging over the industry. Here are some of the other key policies pharma leaders are watching closely.

Bursting hospitals’ 340B bubble? 

When it was launched in 1992, the 340B Drug Pricing Program was designed to establish a cost safety net for lower-income patients. Pharma companies would sell drugs at deep discounts to hospitals in vulnerable communities and in return, those savings would be passed on to patients. 

But as the program has grown, so have the allegations that many hospitals aren’t keeping up their end of the deal. 

“The program has been manipulated by hospitals to lead to widespread applicability for 340B pricing. That’s not appropriate and pharma is trying to take a stance against that,” said Blair Jackson, chief operating officer at Alkermes, a commercial-stage neuroscience company.

Sales of drugs covered under the program swelled from $4 billion in 2007 to $38 billion in 2020 — about 7% of the U.S. drug market — and are still on the upswing. Along the way, some hospitals have leveraged their 340B status “illegally” to boost their bottom line, according to PhRMA.

“Profits from 340B markups now make up 10% of what is spent on brand medicines — that’s nearly $65 billion going to pad the profits of big hospitals, clinics and for-profit companies,” PhRMA states.

“It’s the biggest discount in pharma,” Jackson said. “It’s not how it was meant to be used and now it’s becoming a profit center.”

PhRMA has called for more guardrails in the program along with oversight in how the money is spent, and Jackson said there could be legislative momentum in the coming year to start discussions or potentially introduce bills that would refine the program. 

But Ken Keller, CEO and president of Daiichi Sankyo’s U.S. business, is less optimistic that change is on the way.

The 340B program accounts for about 50% of sales for the company’s blockbuster antibody-drug conjugate Enhertu, Keller said. And although the program is intended for low-income hospitals, he noted that several facilities in affluent communities, such as Cedars-Sinai Medical Center in Beverly Hills, have 340B status. Yet, because of the critical role hospitals play in American communities and the hospital industry’s steadfast support for 340B, Keller said changing the system will be tough.

“I see incredible resistance to touching the program because many hospitals have become addicted to it,” Keller, who also holds a board position at PhRMA, said. “They leverage it to make sure they stay in the black … and I don’t see an end in sight.” 

Rare disease R&D and the Musk effect 

With a potential government shutdown looming, Congress appeared poised to pass a large bipartisan funding bill last December. And then Elon Musk took to X to blast various aspects of the bill, sending legislators scrambling to retool the stopgap funding measure. Ultimately, lawmakers reemerged with a dramatically slimmed-down version of the bill that left a broad range of programs on the cutting room floor.

Among the slashed provisions were several funding initiatives for medical research including an extension of the rare disease priority review voucher program through the Give Kids a Chance Act. Originally set to expire in 2024, the act would have extended the program, which incentivizes rare disease drug development for pediatric indications, another five years.

Through the program, the FDA awards vouchers to companies that win an approval for a rare pediatric disease. Those companies are then allowed to sell the vouchers to other drug developers that can use them to request a six-month review period from the FDA instead of the typical 10-month span.

While critics have claimed the program gives the industry a handout, pharma companies and many patient advocate groups maintain that it helps spur innovation.

With the FDA planning to sunset the program in December 2024, valuations for priority review vouchers have increased from their historical average of $100 million. In November, Acadia Pharmaceuticals sold a voucher it won after scoring an FDA nod for a Rett syndrome drug in 2023 to an undisclosed buyer for $150 million. 

Gene therapy specialist Regenxbio is following the issue of priority review voucher renewal closely, the company’s chief medical officer, Dr. Steve Pakola, said.

Earlier this week, Regenxbio announced a partnership with Nippon Shinyaku to develop and market two late-stage candidates. Although Nippon would lead commercialization, Regenxbio would retain the rights to any priority review voucher it wins upon drug approval, which could come up “later this year,” Pakola said.

But at the moment, the program’s future appears in doubt. The government funding bill passed in December will expire in March, teeing up another legislative showdown over government spending this year. With the Trump administration vowing to make dramatic cuts to funding, and Musk positioned to be at the forefront of those efforts, there’s little hope among legislative watchdogs that programs axed from the initial funding bill will make a comeback in the next round of proposals.

Debate surrounding the Orphan Drug Act, another initiative created to spawn R&D momentum for rare diseases, could also be brewing. Under the program, companies that win an orphan drug designation are entitled to seven years of exclusivity for newly marketed drugs, also barring the FDA from approving other treatments with the same active ingredient for the same indication.

But the agency plans to instead apply the designation to indications rather than drugs, which would allow more competition into the market, according to Richard Daly, CEO and president of the rare disease company Catalyst Pharmaceuticals.

While those pushing for the change argue it would create more opportunities for innovation, Daly said an indication-focused approach is “antithetical to the Orphan Drug Act” and would “kill investment.”

In 2021, Catalyst challenged the FDA’s approval of another company’s drug indicated for the same disease treated by its own therapy, Firdapse. A court sided with Catalyst, and the agency set aside its approval for the rival treatment, marketed by Jacobus Pharmaceutical.

But for the rest of the industry, the FDA indicated it plans to stick to its guns. In 2023, the agency issued a notice to “address the uncertainty” created by the Catalyst decision, saying that although it complied with the court, it plans to apply orphan drug exclusivity to indications rather than specific drugs.

Although Daly said the company has policy professionals working with the FDA and legislators to make sure the “voices of the rare disease community” are heard, he doesn’t feel like regulatory momentum is “going in the right direction” to keep the Orphan Drug Act focused on new therapies.

To launch a drug in the ultra-rare disease space, the path to commercialization is narrow. In developing the first treatment for a rare genetic disease that impacts only an estimated 900 people in the U.S., Zevra Therapeutics had to keep the end game in mind early on. 

“Awareness for [a] new therapy takes place through the clinical trials,” said Josh Schafer, Zevra’s chief commercial officer. 

The pharma received FDA approval in September for Miplyffa, the first therapy for Niemann-Pick disease type C, which is caused by genetic mutations in the NPC1 or NPC2 genes that affect how the body breaks down fats and lipids. While the patient population for NPC is small, the number of diagnosed cases is even smaller, around a few hundred globally. With a first-in-disease approval and recent availability of Miplyffa, Zevra is now ramping up its reach.

Ultra-rare model

Miplyffa has been available commercially since November at a cost of more than $100,000 per month — more than $1 million annually. Early adoption has exceeded expectations, president and CEO Neil F. McFarlane said. 

Miplyffa is used in combination with miglustat, a glucosylceramide synthase inhibitor that has been used off-label to treat NPC patients. Treating the neurological symptoms of NPC in adults and children 2 and older, the combination therapy stopped disease progression through 12 months for patients in the clinic.

During a third-quarter earnings call, Zevra announced that it reached 90 patients for Miplyffa and was working through the reimbursement process.

“We've seen great success there in terms of payers’ willingness to pay for Miplyffa,” Schafer said. “[The launch] exceeded our expectations in terms of the interest and the demand and, more importantly, our ability to be able to process all those enrollments, to be able to get them authorized for payment from the insurance companies and from Medicaid and Medicare.”

The company also continues to treat patients in its ongoing trials — 83 in its early access program have been taking Miplyffa for as many as five years already. Of that group, 69 were converted from the early access program to the commercially available Miplyffa, according to McFarlane.

“More than 270 patients have received Miplyffa through one of the trials that we've conducted,” Schafer said. “It's typical to sort of see that as the starting [point] and the accelerator for any rare disease launch.”

But Zevra wants to reach more patients and is looking to clinicians to help confirm more diagnoses of the disease. NPC can be mistaken for other conditions such as Gaucher disease, and as part of its commercialization strategy, Zevra is seeking those misdiagnosed patients to broaden its therapeutic reach. 

“The way to make a commercially viable opportunity for rare disease is to focus on trying to increase the diagnosis of patients who suffer from that disease,” Schafer said. “What we're trying to do is bring effective treatments to those patients who have already been diagnosed, but then raise awareness and education around how best to treat patients who may be misdiagnosed today.”

And there are already some groups advocating for NPC screening at birth, according to Schafer.

Financial footing

With the U.S. launch underway, Zevra is looking to expand Miplyffa to Europe, with regulatory submission expected in 2025, McFarlane said during the earnings call.

Elsewhere in Zevra’s portfolio, a urea cycle disorder treatment called Olpruva is underperforming, with only three new patient enrollments during the third quarter of 2024, according to the earnings report. Zevra launched Olpruva at the beginning of 2024 after it acquired Acer Therapeutics. Zevra also has an ADHD drug, Azstarys, on the market. The two drugs brought in about $1 million in third quarter revenue.

“We're talking about a company that had never commercialized the product,” McFarlane said. “Since the beginning of the year, we've launched a product in UCD, and now we've actually gotten approval of the first product ever for NPC. If I think about the lessons that we've learned in the first launch, we're applying those lessons. We're listening and we're building the depth and strength in our organization to be able to prove that we can commercialize ultra-rare disease drugs.”

The lessons from Olpruva’s launch have also helped Zevra achieve greater success with Miplyffa’s early days. 

“Our commercial team was really sort of built fit-for-purpose to be able to bring multiple products to the rare disease community with a really focused effort with overlapping call points,” Schafer said. “It helps us with both products. We have relationships that help open doors and initiate conversations with clinicians because we have both of these products. That is fundamental to who we are and how we're growing.”

Still, the rare disease company has a cash runway into 2027 after completing a public offering in August that raised nearly $65 million. In the pipeline, Zevra has another asset, KP1077, targeting rare sleep disorders in phase 1 and 2 trials, as well as a phase 3 trial for a vascular Ehlers-Danlos syndrome treatment.

“I have no favorite child,” McFarlane said of the company’s portfolio. “The reality is that we are launching two products in two critical therapeutic areas right now, and we have two late-stage development programs. We're developing products for patients who don't have a lot of therapeutic options. Our goal is to be able to bring these products across the regulatory hurdles and then commercialize them and make it as easy as possible for patients to receive these therapies.”

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By The MRN

Globally, millions of patients suffer from over 7,000 rare diseases with few or no regulated standards of care. Even some well-known diseases, like cystic fibrosis, are considered rare diseases because they involve a wide range of genetic variability that affects their treatment. Yet, clinical trials often fail to meet recruitment requirements because not enough patients can reach clinical trial sites. Recently, Medical Research Network (MRN) analyzed data from 318 of their patients, over half of whom were engaged in rare disease trials, and found that the average distance from their clinical sites was 177 miles in the United States and 136 miles in the rest of the world. For rare disease patients and their families, driving hundreds of miles round trip for clinical trial appointments isn’t feasible.

Rare disease patients also face other challenges that make it hard to participate in trials. They may have severe physical limitations due to the disease and rely on caregivers for transportation, which limits their availability to travel. Sponsors wishing to study rare diseases must focus on building patient-centric trials as the best way to recruit patients and make it as easy as possible for them to participate. In-home clinical visits offer a patient-centered solution to recruiting and retaining rare disease patients.

Rare diseases affect the entire lives of patients and their families. Managing the disease’s symptoms can be a full-time job. When patients participate in a clinical trial, it means they must navigate a complex web of doctors’ appointments, treatments and care. Despite these challenges, an NIH study in June of 2022¹ found that rare disease patients and their families are eager to participate in research studies to find new treatments. However, traditional study designs make it difficult for them to get involved. Also, study protocols have become increasingly complex in recent years, requiring additional tests, adding to the burden placed on patients.

MRN recently helped deliver a trial for Duchenne Muscular Dystrophy, a rare genetic disorder that creates extreme muscle weakness and cognitive effects. Symptoms begin in early childhood and are frequently debilitating. As the child’s mobility declines, it becomes increasingly more difficult for caregivers to take them to clinical trial sites for studies. When MRN worked with these families through our network of home healthcare providers (HCPs), we discovered despite their struggles, they were excited to participate in treatments that could help future generations affected by this disease. Many patients and their families who cope with rare diseases share this altruistic desire to advance therapeutics.

MRN bring a predetermined percentage of trial visits to the patient’s home or an alternate location, such as a local clinic or school, to reduce the burden placed on patients and caregivers and give them more options to participate. In-home visits also mean less time missed from work or school and traveling long distances to sites, and more time in comfortable, often customized spaces in their own homes.

Successful in-home visits hinge on positive relationships, beginning with the HCP and the patients and families they interact with. HCPs are trained healthcare professionals, often nurses, specially selected for each trial according to its needs and required proficiencies. They meet with patients to perform some of the study’s protocol requirements, such as checking vitals, taking and processing samples, or administering investigational products. Often, when HCPs deliver care in the patient’s home or community, they establish trust and develop relationships with the patient and their caregivers, similar to what patients and families experience on-site.

“Patients with rare diseases and cancers must navigate a minefield of medical professionals and juggle a lot of appointments,” explained one of our in-home specialists. “Being able to schedule a visit at home, have the IMP delivered, and have samples taken at home means that they can take a break from this. They can have their caregivers and family present, which helps settle worries and provides welcome relief from hospital visits.”

Additionally, trials looking to increase diversity can utilize in-home HCPs who are culturally sensitive, understand the community and speak the patient’s language. Visiting patients who are traveling is also possible, so their participation doesn’t pause because they are out of town. In-home visits can reach people where they are, anywhere around the world. This keeps patients engaged in the trial, allowing the trial to fit around their schedule, not the other way around.

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References

1. What role can decentralized trial designs play in improving rare disease studies? – PMC (nih.gov)

Scientific breakthroughs in rare disease are coming at a faster clip as technology improves. But commercializing these drugs to a small population remains a challenge, and rare disease specialist Alexion has had to pave many new roads along the way.

Chief among those hurdles are finding the patients diagnosed with a certain condition and working with regulatory bodies to design a mechanism for approval. Alexion’s senior vice president of the U.S. business, Scott Weintraub, views these obstacles as an opportunity to be the first company that tackles specific unmet needs.

Now part of pharma giant AstraZeneca after a $39 billion buyout that closed in 2021, Alexion’s strategy requires even more foresight and communication between disparate departments of R&D and commercial than companies developing drugs for more widespread conditions, he said.

“In the Venn diagram between development and commercialization in rare diseases, the middle is pretty large, because you have to think about these things early on,” Weintraub said. “It’s going to be more than just the drug profile, which is obviously important, but can you find these patients?”

From locating patients to providing evidence to regulators, everything is a little bit harder when you’re on the cutting edge.

“If you’re the first, you have a lot more to do than just selling the drug,” Weintraub said. “A lot of times, you don’t have a path forward with the FDA at the time of your idea, so you have to convince them as to what’s important to these patients.”

Weintraub says that rare disease drug development needs to “start with the end in mind.”

Charting new waters

Strensiq is a drug that exemplifies those challenges, Weintraub said. The treatment for a rare bone condition called hypophosphatasia addresses a disease that’s typically difficult to diagnose in babies and children with fragile bones. The disease can also have a later onset, and it’s often misdiagnosed as fibromyalgia.

On the surface, what should be a market where Alexion has no competition is tough to penetrate because patients aren’t readily apparent — the company had to learn over time how many patients existed.

At the same time, the original formulation of Strensiq requires multiple injections a week for the rest of a patient’s life, a regimen that has evoked emotional pleas to cut down on the number of shots, Weintraub said. Now, Alexion is conducting a late-stage trial with fewer injections and a wider pool of patients. 

“Patients in the trial have broken down in front of doctors, their life entirely consumed by getting their son these injections. That they’d be able to control his disease with a shot once every other week and not be reminded of it every day was really impactful for them,” Weintraub said.

Weintraub said these lessons from the patient community are especially important in rare disease.

“All of the challenges and opportunities in rare disease are difficult for development, and they’re difficult for commercialization — but at the same time, we would call that mission the secret sauce of Alexion,” Weintraub said. “If you’re in accounting or in a bench laboratory, you all know the mission.”

Following Soliris

The business of follow-on drugs is not new to the company. As Amgen was preparing to launch a biosimilar of Alexion’s paroxysmal nocturnal hemoglobinuria blockbuster drug Soliris in March next year, Alexion was racing the clock to deliver a new version called Ultomiris. Their mission was not only to get the drug approved, which happened in 2018, but to convince patients to switch.

During the AstraZeneca acquisition, the sustainability of the Soliris business was a key concern. And for rare disease patients, part of that solution was to reduce the injection burden from once every two weeks to only six times a year.

“A lot of those questions have gone away,” Weintraub said, pointing to Ultomiris’ lower dosing regimen as well as a 30% lower price compared to Soliris even though Ultomiris could have been sold at a higher price point. Alexion has also been exploring other indications for, gaining approval in 2022 for the rare neuromuscular disease generalized myasthenia gravis, or gMG, and most recently this year for neuromyelitis optica spectrum disorder.

And with AstraZeneca on board, Alexion, which had previously operated in about 20 countries, has access to 70 markets worldwide.

In all of those markets, physician education is paramount to Alexion’s success, Weintraub said.

“A neurologist who has two gMG patients has a lot of questions about clinical trial data or real-world evidence, or the safety of X, Y and Z treatments,” Weintraub said. “If gMG was a paragraph in their medical books when they went through school, we can provide additional value to them over time.”

Ironically, the work Alexion does to pave the way in rare diseases also leads to further competition down the road — “because we created a pathway for drug approval, and once that mechanism is in place, other companies can at least get their drug approved and figure out their strategy.”

AstraZeneca’s promise

AstraZeneca CEO Pascal Soriot earlier this year promised 20 new medicines launched by 2030 and total revenue above $80 billion. As a $6 billion business unit, Weintraub said, Alexion’s leaders hope to have an outsized impact on achieving those goals.

“We’ll have at least a nice sized portion of the new molecular entities, and Alexion will punch above its weight to contribute to that,” Weintraub said, pointing out the company has 10 phase 3 programs in the works.

At AstraZeneca, Alexion now has access to a cutting-edge genetics portfolio that the pharma giant had been accumulating over time through biotech funding. Alexion also gained technology in the fields of diagnosis and patient tracking that make finding unmet rare disease needs easier than ever before.

“If you think about the diagnostic challenge, it takes an average of nearly five years and seven different specialists to even get the right diagnosis,” Weintraub said. “You can’t just go to market — you have to help with diagnosis and education around the globe, and understand the patient journey and what’s meaningful to them in terms of improvement.”

Rare diseases aren’t typically a part of baseball’s news cycle. But late last summer, Los Angeles Dodgers first baseman Freddie Freeman had to step away from the game for several weeks when his son became ill with Guillain-Barré syndrome, a rare, potentially life-threatening neurological disorder. The swell of support for Freeman, who went on to become the 2024 World Series MVP, suddenly raised the profile of the disease. 

In GBS, the immune system mistakenly attacks part of the peripheral nervous system. Symptoms come on suddenly and progress rapidly, starting with tingling and weakness and sometimes leading to paralysis.

“It starts in your feet and moves up through your body,” said Douglas Love, president and CEO of Annexon Biosciences, which has a late-stage GBS candidate in the pipeline. “One in four patients are going to be on a ventilator within a couple of weeks.”

That common trajectory was the same for Freeman’s three-year-old son, Maximus. Within a matter of days, he developed a limp, couldn’t sit up and eventually couldn’t breathe on his own.

Although the “why” behind GBS is unknown, it strikes days or weeks after another illness, such as a respiratory or gastrointestinal bacterial or viral infection, has cleared.

“There’s no disease that I'm familiar with that’s like Guillain-Barré syndrome. It happens in patients who are otherwise completely healthy,” said Love. GBS impacts 3,000-6,000 people in the U.S. each year, according to the CDC, and is often treated with off-label intravenous immunoglobulin therapy.

“It has some effect, depending upon how severe the disease is. But the more severe the disease, the less effective IVIG is,” Love said. 

However, there’s no FDA-approved treatment for the disease, and while most patients recover, the process can be long and brutal. 

Annexon Biosciences wants to change that. The company successfully completed a pivotal phase 3 trial for its lead candidate, ANX005, an immunotherapy that targets and blocks C1q, the molecule that initiates the classical complement pathway associated with GBS. ANX005 received FDA fast track and orphan drug designations.

“We're pursuing what is a unique or diverse approach from other complement programs in that we're targeting upstream complement activity,” Love said. “It localizes and activates complement or inflammation right on disease tissue, so you can be more proximal in your approach in targeting aberrant inflammation.”

A June phase 3 readout showed ANX005 had statistically significant results on key endpoints, including on the GBS disability scale.

Unlike IVIG, which is administered over five days, ANX005 is given by IV infusion within a few hours and works that quickly, too, Love said.

“Our drug is quite simple. It is designed to block C1q immediately upon administration,” he said. “It speaks to the power of our approach, which is quickly shutting down C1q, shutting down the disease process, and allowing patients to move from a state of decline to stopping the disease process.”

Love said the company plans to file its biologics license application for ANX005 in the first half of 2025. 

Although the GBS market is small, Annexon will have it cornered as the first and only approved treatment if it wins an FDA OK. In addition, Love said there’s a 90% compliance rate in treating GBS, and 80% of the disease’s incidence occurs in five large states and in “just a few hundred hospitals.” 

“Although [GBS] happens acutely and sporadically, it happens where you have more people,” he said. “That allows us to have a very efficient commercial footprint.” 

ANX005 isn’t the only product in Annexon’s pipeline targeting C1q. Its other flagship programs are in geographic atrophy and complement-mediated autoimmune diseases, as well as programs in Huntington’s disease, ALS and lupus nephritis.

“We're the first, and thus far, the only company targeting C1q in the clinic,” Love said. “By targeting C1q where it initiates this inflammatory disease process, it allows us to pursue a wide swath of indications that you don't necessarily always see with complement programs.”  

First up, though, is a chance to change the trajectory of GBS.

“It's a neurological nightmare for patients that deserves an appropriate therapy,” Love said. 

Regulators have signaled for the last few years that they’ll be keeping a closer eye on M&A in pharma — and the Federal Trade Commission’s move in December to block Sanofi’s acquisition of Maze Therapeutics’ clinical program for Pompe disease offers a look at how this fresh scrutiny could play out.

The FTC’s decision was still unusual, and not only because it interfered with a licensing deal, according to Laksheeta Johari, a consultant with Lifescience Dynamics.

“What the FTC statement failed to take into account were the challenges that are associated with developing therapies for rare diseases,” Johari added.

The FTC regularly weighs in on M&A and recently highlighted its work to lower drug prices and encourage competition. For instance, it touted a proposed consent order for Amgen’s $27.8 billion acquisition of Horizon Therapeutics that would prohibit Amgen from leveraging its drug portfolio to disadvantage rivals and require the company to seek prior approval before acquiring related products.

However, the announcement a few days later that the FTC would block Sanofi’s acquisition of Maze’s glycogen synthase 1 inhibitor MZE001 came as a surprise.

“This is unprecedented,” Maze CEO Jason Coloma told Biotech TV earlier this year. “As far as we’re aware, this is the first time that a licensing project or a licensing deal has been blocked by the FTC.”

While the commission has an important role to play in ensuring a “healthy spirit of competition,” Johari believes there should be an extra layer of consideration for rare diseases.

“We can’t compare the rare disease space with some of the more established therapeutic areas … I think that’s one nuance every aspect of the industry does need to keep in mind,” she said. “Whether it’s from a clinical development perspective, a commercialization perspective or even an access and reimbursement perspective, it’s not going to be an apples-to-apples comparison when we’re looking at rare diseases.”

A deal abandoned

Sanofi’s deal with Maze brimmed with optimism when it was announced in May 2023.

“People with Pompe disease continue to need additional treatment options for this life-threatening condition,” Coloma said in a statement. “Sanofi is a leading global healthcare company with deep experience working with this community and the ideal partner to continue the advancement of MZE001.”

Indeed, treatment options for Pompe disease, a rare genetic disease that causes progressive weakness, are limited and come from just two companies, Sanofi and Amicus Therapeutics, the latter of which scored an approval for its two-component therapy in September. In addition, the current treatments are infusions. If MZE001 makes it to market, it could be the first oral medication available for Pompe disease patients.

The Sanofi-Maze deal followed a familiar pharma strategy. Maze is a smaller, clinical-stage company, and Sanofi is a major player that already has three approved drugs for Pompe disease. The licensing deal meant Pompe disease patients would potentially get a new treatment faster because the development would be in the hands of a company with vast resources and established experience in that indication.

But the FTC disagreed, and the very factors that made this deal favorable for the companies — and potentially patients — is what sunk it in the end. The FTC called Sanofi “a monopoly supplier” of Pompe treatments and said Sanofi could use the acquisition to squash competition and delay development of the new drug.

According to Sanofi, “The exact opposite is true.”

“Sanofi had no intention of shelving or killing the program. Sanofi executed the license agreement with Maze because Sanofi believed that it could bring its resources, experience, and expertise in Pompe disease to accelerate the development of MZE001 and potentially bring it to Pompe patients around the world, as Sanofi has done with substrate reduction therapies for other rare diseases,” a Sanofi spokesperson told PharmaVoice via email. 

Ultimately, Sanofi decided to abandon the deal.

Another rare disease roadblock

Rare disease drug development is already lengthy and filled with significant and unique roadblocks. When a disease is poorly understood and the patient population is small, it can be a challenge to design trials with endpoints with known clinical benefits. It can also be difficult to find experts in rare disease indications and to recruit for trials among a geographically scattered patient population.

Incentives like the Orphan Drug Act exist to encourage companies to develop drugs for rare diseases in the face of such obstacles, and the FDA granted Maze’s MZE001 an orphan drug designation in 2022.

Those challenges are also why smaller companies developing rare disease treatments partner with larger ones that have the resources and experience needed to develop drugs more quickly and efficiently.

Pompe is a life-threatening genetic condition that affects about one in 40,000 people. Sanofi has decades of experience in the field and established relationships with healthcare providers and patient groups, and has designed successful Pompe disease clinical trials.

“In this case, you had a company that had over 20, 25 years of experience working with that community,” Coloma told Biotech TV. “They were in a very strong position to think about the best way and the most rapid way to develop this for patients, and that’s, in part, one of the major reasons we wanted to work with them.”

Rather than starting from scratch, Sanofi would have been able to apply existing resources and years of experience to developing MZE001.

“Sanofi, given that they have approved assets in Pompe, already has those established relationships, and that could have really benefited Maze with the clinical development of the MZE001 asset,” Johari said.

Now, Maze seems to be going back to the drawing board for MZE001.

“All it does is delay the ability to even test the hypothesis in the clinic,” Coloma told Biotech TV, adding that the company was “exploring our options” and committed to advancing MZE001 to the clinic and to patients.

A chilling effect?

Gaining a partner with experience in a rare disease indication should be a boon for a small company that’s trying to develop an orphan product.

“If you’re looking at rare diseases, it is very important that you have a player that understands the field, that has those relationships,” Johari said.

However, the FTC’s scrutiny and blocking of a par-for-the-course licensing deal could have a chilling effect on other, similar partnerships, she said.

“Across the rare disease industry, it may make players do a double take on who they want as their partner,” Johari said.

It also raises questions about whether the FTC should engage with experts in rare disease as it evaluates future partnerships.

“Maybe there’s a need to have a rare disease expert have a seat at the table to determine what’s an anticompetitive threat or something that can benefit the industry,” Johari said. 

Rare diseases, once a miniscule chapter in the pharma playbook, have become a major focus for even the biggest companies in the world. From 5% of new drugs in the late 1980s to 43% in 2023, rare disease treatments comprise a rapidly growing sector of the overall pipeline.

For pharma giant Johnson & Johnson, the rare disease space is where a large company can have an outsized impact, said Dr. Katie Abouzahr, vice president, autoantibody portfolio and maternal fetal disease area leader at J&J Innovative Medicine. 

Abouzahr heads up the development of nipocalimab, an autoantibody drug that could treat rare diseases like myasthenia gravis or more common ones like rheumatoid arthritis. By dampening a specific receptor and keeping the immune system from attacking a patient’s healthy cells, the drug could play a part in several areas of unmet need, she said.

Last month, J&J announced positive results from a late-stage study in the rare muscle disease myasthenia gravis as well as from a mid-stage trial in the inflammatory Sjögren’s disease, which currently has no approved treatments that address the underlying cause.

Here, we spoke with Abouzahr about pharma’s growing focus on rare diseases, the development of nipocalimab and what’s next in the autoantibody space.

This interview has been edited for brevity and style.

PHARMAVOICE: What makes rare disease a growing interest for J&J and Big Pharma in general?

KATIE ABOUZAHR: The way we think about anything is: What are the unmet needs? What impact can we have? And one of the things I find fascinating is that, yes, each individual disease is rare, but when you add them all up, the burden is absolutely immense — 300 million people with 7,000 rare diseases. And yet, because each disease is smaller, they perhaps haven’t had the focus or investment or awareness, or even just the innovative approaches to address that unmet need. It’s a double whammy of patients feeling a bit isolated even though there are so many of them. I hope we always go where the unmet need is and where there’s an ability to do something scientifically.

In your own career, how has the approach to rare disease changed over time?

There is greater awareness and understanding, and then often, the scientific tools and approaches that allow us to realize there is a path forward to do something about that medical need — those two things coming together intersect in rare disease. Also, regulators are thinking increasingly about the path to approval in rare and orphan disease. So increasingly, I think the confluence of awareness, unmet medical need and the ability to impact that creates interest, excitement and anticipation about where we can go.

Can you tell me how the autoantibody field fits into the evolution of rare disease drug development?

Autoantibody-driven diseases overlap with rare diseases — not all of them are rare, but many of them are. And in autoantibody, essentially, you have [immunoglobin G, or IgG] antibodies that attack one’s own body and cause disease, and there are different flavors of them. For example, in myasthenia gravis, they attach the acetylcholine receptor. In [hemolytic disease of the fetus and newborn, or HDFN], they attack a baby’s red blood cells. And so in the autoantibody program, nipocalimab binds to a receptor and prevents it from recycling these antibodies, and so they reduce out. And importantly, it prevents them from crossing the placenta. So that one approach, that one treatment, could potentially have input in all diseases caused by IgG pathogenic antibodies.

There are so many of these diseases that we think about them in three segments: those caused by a pathogenic autoantibody, those that affect pregnancy with what we call alloantibodies and then prevalent rheumatology diseases caused by autoantibodies. We are the only one developing in all three segments with nipocalimab, and the golden thread through all of this is unmet need.

Your myasthenia gravis program is furthest along. What can we expect to see there?

We’ve completed our pivotal phase 3, and the next step is to engage with regulators to bring that medicine to patients. If you think about myasthenia gravis, it’s a chronic disease, and one of the features is that you don’t stop making the autoantibodies — they are always causing disease. A lot of these diseases really need sustained chronic treatments so that the patient’s symptoms are as minimal as possible or ideally gone as opposed to having any kind of fluctuations. There are advanced therapies that have been recently approved, but … this would be the first indication for nipocalimab and the beginning of our journey there.

We hope to significantly contribute to the collective understanding of what the underlying cause of these diseases is, and what the available therapeutic approaches are to develop medicines in them. Even just in the last couple years, we’ve shown data we hope contributes to everyone’s understanding of these diseases and we’re taking steps forward toward treatment options for patients that allow them to reclaim their lives.

What’s next for J&J in the autoantibody programs?

Myasthenia gravis is of course one that we’re obviously excited about first, but we’re also in a program in autoimmune hemolytic anemia where there are no approved advanced therapies and very high unmet needs. In maternal-fetal we’re moving into a phase 3 program in HDFN, and we’re continuing to progress in rheumatology.

In approaching rare diseases, clinical trials can be a real challenge. How do you take that into consideration as you develop these treatments?

A feature of rare diseases is that they’re rare, so there are few patients and in some of them, there are often competitors. Regardless, the No. 1 thing we try to do is listen to patients. Because if you listen, they will tell you what they need, not only as you develop your program or what you’re trying to solve for them, but also what’s important to them as they think about entering clinical studies. We do a lot of work with advocacy groups, as well, because they’re such important sources of understanding and knowledge, and we consider them partners.

We have the good fortune of being a very large company, and so we’re able to go where the patients are. In rare disease, you might use data sciences to go where they are as opposed to hoping they will come to you. So we think very carefully about where we’re going to run our programs.

After years of under-performance and stagnant share prices, the pharma industry is starting to find its feet again as evidenced by a steady pickup in M&A. But the battle isn’t over, and companies looking to keep their heads above water need to think long and hard about their focus, their risk and their reputation among shareholders, according to analysts.

Despite hints of a rebound, leaders across sectors are still wallowing in doubt about the future — 45% of CEOs surveyed by professional services and accounting firm PwC said they felt their company would not be viable a decade from now, up from 40% the year before. And with the pharma industry trailing behind the S&P 500 by 10 percentage points in the last five years, the sting is even more acute, said Greg Rotz, U.S. pharma & life sciences advisory leader at PwC.

There are many reasons for that, but near-term earnings growth isn’t one of them, Rotz said.

“While our sector has returned single digits and total shareholder returns, it's actually been driving double-digit earnings growth,” Rotz said, pointing out that long-term investment has not been in step with near-term earnings. “Investors are losing faith in the confidence of the pharmaceutical business model, looking out into time.”

This declining investor confidence in the future performance of pharma companies comes down in part to the competitive saturation of the market, Rotz said, pointing out that “great science alone is not enough to create outperformance.”

As pharmas navigate the next steps of a potential economic upswing, they need to make the right kinds of deals to secure new market “white spaces” — however risky it is to explore the unknown — to bring investors back into the fold, Rotz said.

‘Fundamental economics’

For Rotz, the answer comes back to the “fundamental economics” of pursuing not only the most promising science, but doing so in areas where no one else has arrived first.

“There are so many products chasing the same spaces, driving up competition, and we know from the basics of economics that anytime you have increased competition, you generally have lower returns,” Rotz said. “We know that great science is generally going towards smaller patient populations, as we have gotten better at precision medicine — even the best science put into that environment, compared to the environment of five or 10 years ago, is going to struggle to generate the same level of returns.”

Pharma R&D expenditure grew almost 50% between 2018 and 2023 to a record $161 billion, according to an IQVIA report. That’s good news for patients, but with so many companies scrambling for the same targets, it can be tough to stand out, Rotz said.

“In this environment of increased scientific inquiry and more trials, it's important to step back and say: How many of those are chasing validated pathways that already exist?” Rotz said. “How many of those are chasing therapeutic categories where there are already breakthrough standards of care, versus how many of those are going into the next frontiers of neuroscience or the next frontiers of fighting resistant bacteria, and so on.”

Introducing more risk into the portfolio could help pharmas see better returns, despite the potential for failure, Rotz said.

“It feels safer to go after validated pathways in the moment when you think about scientific risk, but do these models have enough risk in them?” Rotz said. “Are we tied into all the leading edge science coming out of academia and in a position to know where those next frontiers are really going to be so that we can get on them even faster?”

And while diversification can be tempting for the sake of spreading failures thin, companies with a sharper focus tend to be more appealing to investors, said Nicole Daley, a life sciences and M&A partner at law firm Allen & Overy.

“With companies that are more honed in and focused, there's also the risk that the thing you're most focused on then maybe doesn't work or maybe doesn't rise to best in class. But being more focused as opposed to more diverse in terms of what prospects you're thinking about seems to be the more appealing route,” Daley said.

Additive dealmaking

As M&A picks up after the pandemic lull, how can executives make the right kinds of deals to launch them into a more focussed approach that embraces risk and new frontiers?

“We think of M&A as a means to accelerate strategy, but M&A isn’t an end in itself,” Rotz said. “Executives at today’s pharmaceutical companies need to find the fundamental narrative of their strategy to differentiate themselves — once that’s clear, we expect to see M&A playing a big role in helping accelerate those strategies and fill in the products and portfolio underneath that strategy.”

A trend many large drugmakers have taken particularly seriously is divesting business arms to focus more wholly on innovation. J&J, Pfizer, Merck & Co. and more have sold off sizable branches in the last several years to put greater emphasis on more groundbreaking areas. It’s a strategy that pays off down the road, Rotz said.

“The more you can create coherence between your capabilities, your strategy in the market and the products and portfolio you have, the faster you can go and the more value you can create,” Rotz said. “That's the calculus that has been happening, and it’s a good ongoing exercise for management teams to be undertaking.”

But as companies whittle themselves down to become sleeker R&D machines, they need to build up in the spaces where they’ve chosen to focus, Rotz said. And that has changed the face of today’s dealmaking strategies.

“The deals are strategic and trying to help companies solve an issue — we haven’t seen the kind of large-scale megamergers of the past, and I think in today's environments, and specifically in today's regulatory environment, those deals are harder to come by,” Rotz said. “But the need still exists to build out portfolios and maintain access to great science, with a more surgical basis. We see a lot of companies saying their No. 1 priority is to execute deals to solve specific problems.”

Some of the more high-profile deals that embody this strategy include Amgen’s $28 billion purchase of rare disease drugmaker Horizon Therapeutics in October, and Pfizer’s $43 billion acquisition of antibody-drug conjugate specialist Seagen earlier in 2023.

Daley points to Bristol Myers Squibb’s $14 billion purchase of neuroscience biotech Karuna Therapeutics in December as another example of this kind of additive dealmaking.

“If you’ve got a really promising therapy that seems like it’s going to continue to drive things …  that momentum is important to keep going,” Daley said. “And after a couple of years of there not being a whole lot [of deals], it really doesn’t seem to be slowing down.”

As for building and maintaining trust among investors that these deals will fuel growth, Rotz has fundamental advice for executives: Be real.

“It's in everyday actions, when the pressure is on, that we see companies either enhancing and building trust or losing trust very quickly, and leaders need to … know that [pharma’s] trust generally [from] society is declining,” Rotz said. “So you don't get the benefit of the doubt, and your authentic engagement with stakeholders is critical.”