Orphan Product Development

1. Orphan Product Development Focus Group Research - Final Report May 2010 Conducted on Behalf of the National Organization for Rare Disorders (NORD) by Gen., LLC

2. Contents • Introduction • Key Findings • Academic Medical Researchers • Patient Advocates • Investment Community • Pharma/Biotech Executives • Summary & Considerations

3. Study Background • NORD has convened a task force on orphan product development to comprehensively examine the policies and processes applicable to orphan product development – from discovery to approval and availability • As part of addressing these objectives, NORD commissioned a qualitative focus group research study to gain a better understanding of key stakeholders’ understanding of and perspectives on the orphan product development process

4. Research Objectives • Explore stakeholders’ current perspectives on the orphan product development process • Identify stakeholders’ perceptions of the key challenges in the process of orphan product development • Produce a list of proposed solutions to address the challenges in the process of orphan product development

5. Data Collection • To address these objectives, NORD sponsored four (4) focus groups with representatives of groups and companies involved in the development of orphan products: • Academic medical researchers • Patient advocates • Investors/venture capitalists (VCs) • Pharmaceutical/biotechnology industry executives • Following are focus group logistics: • Each group lasted approximately 1.5 hours in duration • Focus groups were conducted in April 2010 • All study participants were recruited by NORD

6. Contents • Introduction • Key Findings • Academic Medical Researchers • Patient Advocates • Investment Community • Pharma/Biotech Executives • Summary & Considerations

7. Key FindingsAcademic Medical Researchers • Experiences with & overall perspectives on orphan product development • Varying degrees of experience with the drug development / orphan product development process • Different areas of therapeutic focus: medical genetics, neurological disorders, pregnancy disorders, and cardiovascular diseases (i.e., vulnerable plaque) • Initial comment was that challenges often arise for orphan medications as a result of a lack of resources at all major junctures, especially the pharmacology/toxicology stage • Throughout the discussion, study participants underscored the need for more information about what regulators and industry are looking for with respect to preclinical study design

8. Key FindingsAcademic Medical Researchers • Key challenges in orphan product development identified by academic medical researchers fall into 6 general categories: • Pre-clinical challenges • Clinical-trial related • Endpoints • Investigator-related • Resources • Regulatory

9. Key FindingsAcademic Medical Researchers • Respondents identified several pre-clinical development challenges: • Lack of data on quantitative natural history data on rare diseases • Lack of availability of relevant and validated animal models • Early studies within a rare disorder often conducted by inexperienced researchers • May result in the unfortunate termination of a project in its nascent stages • Would stymie corporate interest & uptake of a given project

10. Key FindingsAcademic Medical Researchers • Numerous challenges were noted in clinical trial design and execution: • Relative lack of knowledgeable & experienced investigators • Statistical issues posed by dealing with small sample sizes • Design of clinical trials for multi-system disorders • Controlling for concomitant disorders and concomitant medications • Patient identification and recruiting challenges exist • Reaching and recruiting the correct patents

11. Key FindingsAcademic Medical Researchers • ENDPOINTS was first major challenge:identification of clinical endpoints and concurrence with regulators on clinical endpoints for the evaluation of orphan products • Need to “guess” which clinical endpoints are important, necessitating multiple trials • Attaining agreement with regulators about appropriate clinical endpoints • Discrepancy between endpoints selected by study investigators and those considered of importance to regulators • May result from investigators not consulting FDA prior to initiating study • Instances of investigators gaining advance agreement on endpoints which are later rejected by regulators • Medical / scientific / investigator community forms own consensus on endpoints but does not involve regulators in the process • May leads to decisions which are later rejected by regulators

12. Key FindingsAcademic Medical Researchers • The second major challenge pertains to investigators’ expertise and interest • Investigators possess varying expertise in finding a partner to help develop a new entity, and/or to sell this entity to potential investors (often contingent on tech transfer capability) • Young investigators who are junior faculty often do not venture into rare diseases because it may prove a career “dead end” • Rare diseases may not afford near-term publication opportunities • Investigators may have low familiarity with IP considerations • Lack of knowledge of the IP process may lead to an entity’s not having sufficient protection to foster industry interest • Need for improved IP education for academic investigators, especially junior faculty, as well as university tech transfer groups

13. Key FindingsAcademic Medical Researchers • A third challenge identified pertains to resource availability, acquisition and utilization • Overall dearth of funding for orphan medications • Perception is that there is only $14 million provided by the Federal government for orphan drug research • Investigators may have varying degrees of ability to acquire and efficiently deploy resources during the pre-clinical development process • Funding often may not be available to conduct pharmacology / toxicology experiments (which is often where development of a candidate is halted)

14. Key FindingsAcademic Medical Researchers • Lastly, respondents identified several key regulatory challenges • First is that reviewers within FDA may not have commensurate expertise in treatment area as does the investigator • Second, current guidelines for development of orphan medications (i.e., ICH guidelines) may not be helpful to investigators • One point raised: need for FDA guidance on qualifying surrogate endpoints

15. Key FindingsAcademic Medical Researchers • Potential solutions proposed academic medical researchers include: • Federally-funded trust to support research and investigation into natural history of and medications for rare disorders • More FDA guidance on qualification of surrogate endpoints • A handbook to provide guidance to academic investigators on development of medications for rare diseases • Some modality to stimulate/spur more young investigators to get involved in rare diseases (as opposed to viewing orphan product development as “career suicide”) • Establishment of a working group to determine which clinical trials processes and statistical approaches are most appropriate for orphan medications • Development of a national clearinghouse of information to accumulate / aggregate information on natural history of rare diseases • Greater public awareness of rare diseases

16. Contents • Introduction • Key Findings • Academic Medical Researchers • Patient Advocates • Investment Community • Pharma/Biotech Executives • Summary & Considerations

17. Key FindingsPatient Advocates • Participant backgrounds • Patient advocates represent a wide range of rare diseases and exhibit a range of familiarity with the orphan medication development processes • Most of the participants got involved in rare disorders as a result of a child or other loved one being impacted by the condition in question – a few come from a non-profit or clinical research background • The organizations represented in the focus group generally saw their overall role as advocating for / providing a voice to the people affected by these conditions, as well as keeping those individuals well-informed

18. Key FindingsPatient Advocates • From the very outset, patient advocates expressed a range of frustrations with orphan product development: • Overall dearth of treatment options • Lack of commercial interest to pursue development of orphan medications • Dearth of awareness of rare diseases on the part of physicians • Lack of credible information on rare diseases to disseminate to the general public • Overall lack of public awareness about the importance of rare diseases • Process of developing medications takes a long time • Disconnect among physicians, patients & investigators evaluating new products • Effective medications are available overseas but not approved in the U.S. • Reimbursement challenges once medications for rare diseases do get approved • Effective medications may be discarded from consideration due to disagreement over which endpoints and changes in those endpoints are meaningful • Perceived lack of harmonization in the orphan product approval process between the US FDA and European Union/EMEA • Patients can get “discarded” from clinical trials if they have a co-morbid illness

19. Key FindingsPatient Advocates • Topics patient advocates would like to better understand about the orphan product development process: • Timetable/schedule of typical FDA approval process (vs. process of orphan drug development) • The costs associated with developing an orphan medication, especially from the standpoint of a major pharmaceutical company • How one moves a product from off-label usage to on-label approval • How does the EMEA (and parallel regulatory bodies from other markets, e.g., Australia) operate differently than FDA in terms of orphan medications • More specifically, how EMEA and other regulatory bodies weigh and evaluate adverse events • How do both FDA and EMEA evaluate the risk threshold for medications, esp. treatments for rare diseases? • What are the clinical trials requirements or standards for orphan medications?

20. Key FindingsPatient Advocates • Perceived challenges identified by patient advocates: • Lack of awareness among bench researchers looking at new medication targets of applicability to rare diseases (and/or potential therapeutic value) • Dearth of studies conducted on the natural history of rare diseases, hence lack of natural history data, and the lack of known / well-defined clinical endpoints • Due to a lack of natural history data, finding an endpoint is more the result of “luck” than a systematic process • The current drug approval process is geared towards large populations, not small/rare disorders • Applying statistical/research standards to small sample sizes is a challenge • Several financial challenges were noted • Uncertainty around whether the investigator can obtain the grant funding • Large cost of the clinical trials to the pharmaceutical company (creating risk aversion) • Perceived lack of ROI • Possible reimbursement challenges once a medication is available • Companies pursuing similar targets may not share information • Physicians often are unwilling to report writing medications off-label

21. Key FindingsPatient Advocates • Patient advocates offered a range of potential solutions: • The first proposed solution entails a redefining what constitutes a rare disease as far as number of patients (i.e., “Orphan Drug Act 2.0”) • Redefine a rare disease as a condition affecting a population smaller than 200,000 • Process similar to the EMEA model of “exceptional approval” • Establishment of an on-line, centralized clearinghouse of data pertaining to rare diseases • Natural history and other information of use to investigators, investors and other parties • Convening of a working group to evaluate a new set of research standards for very small study populations • Helping academic researchers become more familiar with the FDA approval process, e.g., internships within CBER/CDER • Modifying or enhancing the system of incentives within the research community to promote more: • Basic/bench research into rare diseases (in order to make it more high-priority) • Natural history studies of rare diseases • Studies to establish what constitutes “steady state” within a given disease category • Collaboration between academia and pharmaceutical industry • Need to considerably augment awareness among the public as well as treating physicians about rare diseases

22. Contents • Introduction • Key Findings • Academic Medical Researchers • Patient Advocates • Investment Community • Pharma/Biotech Executives • Summary & Considerations

23. Key FindingsInvestment Community • Current environment for investing in the orphan drug space: • VCs are still investing in companies that have growth potential • Recent liquidity crisis has limited number of companies investing and the amount of capital to invest • Uncertainty about the operability of capital markets • Whether private companies can be taken public is in question • Uncertainty as to how the impact of the recently-promulgated Federal health reform initiative • Large pharmaceutical companies such as Pfizer and GSK have recently started investing in the orphan drug space

24. Key FindingsInvestment Community • Elements of the process by which investors de-risk projects in the orphan product space: • Evaluate MOA • Determine whether animal models are robust and demonstrate efficacy • Quantify the number of patients affected by a condition • Assess managers & management track record • Assess both the FDA documents related to future approval • Perform due diligence as to whether there is sufficient IP protection • Confirm there will be mechanisms in place for eventual reimbursement of the product in question

25. Key FindingsInvestment Community • Main perceived challenges that exist in orphan product development: • The first challenge that was raised is the difficulty of clinical development as a function of several factors: • Small populations mean that it is difficult to reach and recruit participants for clinical trials • Identification of relevant and approvable clinical endpoints • The fact that there is less of a “track record” with rare diseases vs. larger / established disease states • Clinical trials are a challenge to conduct due to statistical constraints in evaluating small populations with (that potentially have co-morbid conditions)

26. Key FindingsInvestment Community • Several aspects of the regulatory evaluation process for orphan products were noted as challenges: • Ensuring that the reviewers within FDA possess familiarity with the treatment area in question • Transparency of FDA decision-making – specifically, public investors would like better understanding of how FDA plans to evaluate a compound and what the FDA is communicating to the company • Specifically, investors requested a public record of the precise criteria that FDA communicated to the company a given orphan product to attain approval • Desire for increased flexibility around endpoints required for approval of an orphan product • A further challenge raised is the perceived degree of concordance in agency policy at highest levels vs. among those actually reviewing new medications • Interest in risk-benefit considerations that are taking into consideration during the developmental process being carried forward into manufacturing • At present, investors perceive that there is no tolerance for risk in CMC

27. Key FindingsInvestment Community • A third area of challenge that was identified by investors is evaluative challenges in assessing the potential opportunity for a company or a product in question • First, it is difficult to obtain accurate information on number of patients with rare diseases in order to determine the market size and potential • Additionally, it is difficult to ascertain the market structure in evaluating the opportunity • It was noted later in the discussion that current repositories of patient information for rare diseases are decentralized • Further, one investor remarked that there is a lack of literature on the natural history or clinical course of the disease

28. Key FindingsInvestment Community • A fourth are of possible challenge is the recently promulgated health care reform bill, the effect of which respondents generally feel is uncertain • Notably, any possibility for future pricing pressure is seen as a major potential challenge that could prove devastating to investment in the orphan product space

29. Key FindingsInvestment Community • Potential solutions proposed by investors: • First, investors spoke of a “well-defined pathway” for the approval of orphan medications, one that is: • Transparent /publicly available communication between the FDA and the company • This would need to be rooted in a published or agreed-to guideline • Next, investors are seeking reliable sources of rare disease patient information • More specifically, a centralized repository of epidemiological data so that they can evaluate the structure of the market (i.e., how a condition is currently treated) as well as potential market size • A third item noted is that investors require confidence in the maintenance of favorable pricing and reimbursement conditions • The need protect payment mechanisms and the 7-year orphan product protection statute were underscored by all investor participants • A fifth area of discussion spoke to flexibility around CMC requirements • Another area of focus is the need for reviewers within FDA who are very familiar with the disease state in question • Lastly, a solution that was forwarded is to create a fund that would support early research efforts in the orphan disease space

30. Key FindingsInvestment Community • Following are investors’ perceptions of the role (and potential role) of NIH in the process of developing orphan medications: • NIH is perceived as primary source of grant funding to sponsor bench science/new discoveries • NIH is regarded as funding early-stage clinical pathway development/medical knowledge and translational research • When asked as to what NIH could potentially do differently, following were some of the suggestions raised: • Conduct more translational research on existing products (vs. more bench research) • Help to fund small companies in the orphan drug space (since these companies are less able to raise money in the private markets • Additionally, NIH may be able to help harness and guide the investment of wealthy individuals into rare diseases

31. Key FindingsInvestment Community • Towards the end of the discussion, investors raised a potential warning flag about the future development of orphan medications • It was noted that due to the aforementioned challenges, especially the monetary constraints in the wake of the credit crunch, there is a dearth of private investment in early-stage orphan research programs • As a result, there may be fewer compounds moving from discovery into pre-clinical development, which could lead to a future shortage of medication candidates 6-7 years down the road • It was noted that an opportunity for NIH is to step into the breach and help to move development projects from the discover into the pre-clinical stage

32. Contents • Introduction • Key Findings • Academic Medical Researchers • Patient Advocates • Investment Community • Pharma/Biotech Executives • Summary & Considerations

33. Key FindingsPharma/Biotech Execs • Industry executives characterized the current challenges they face in developing orphan medications • The first challenge that was described resides in companies’ ability to quantify the unmet need & the opportunity within a rare disease treatment area • Dearth of natural history data • Lack of market data • Pharmaceutical / biotechnology executives pointed to several clinical development challenges • Small populations of patients • Identifying and connecting with patients

34. Key FindingsPharma/Biotech Execs • Industry executives characterized the current challenges they face in developing orphan medications (cont.) • Several comments were made about the current regulatory environment for developing orphan products • Respondents pointed to be need for better clarity/consistency in the regulatory process and what is expected • Respondents spoke of Companies often have to face “unexpected hoops” leading to additional investment in the clinical development process • It was felt that the agency needs a better understanding of the cost/investment that is required to bring orphan medications to market • Further, executives spoke of the need for increased harmonization of U.S. & EU regulatory procedures for orphan medications • One respondent referred to an “asymmetry of knowledge” between investigators, including those working on behalf of the company, and the FDA reviewers looking at the product

35. Key FindingsPharma/Biotech Execs • Industry executives characterized the current challenges they face in developing orphan medications (cont.) • The next overall set of challenges pertain to manufacturing • First, it was mentioned that it is difficult to scale up manufacturing of a rare disease entity due to unique processes • Additionally, manufacturing represents a major aspect of the investment in rare diseases • Respondents pointed to challenges in working with key opinion leaders (KOLs) in rare diseases • First, there are a limited number of KOLs within a given treatment area • Secondly, these KOLs often are prevented from consulting with government since they are consulting with industry – this is seen as part of what contributes to the asymmetry of expertise between industry and regulators

36. Key FindingsPharma/Biotech Execs • Industry executives characterized the current challenges they face in developing orphan medications (cont.) • There are also a number of more generalized risks involved in the orphan drug space: • One, the current situation in the financial sector, i.e., the recent crisis in the credit markets • Secondly, the impact of the recently promulgated health care reform bill remains unknown  • A few respondents note that the elimination of lifetime caps and the negation of restrictions on pre-existing conditions are encouraging vis-à-vis rare diseases)

37. Key FindingsPharma/Biotech Execs • Industry executives proposed a series of potential solutions to these perceived challenges: • Global multidisciplinary forum that would incorporate industry, regulators, NIH, academia and patient advocate groups • Need for assurances of pricing protection, especially in light of the newly-promulgated National health care legislation • There is a need for solutions vis-à-vis the regulatory process • More clarity of requirements for approval • More flexibility, i.e., a greater threshold for risk tasking in rare diseases and more flexibility around surrogate endpoints • Greater recognition that no one knows about the disease, hence more need to educate reviewers on the realities of orphan diseases

38. Key FindingsPharma/Biotech Execs • Industry executives proposed a series of potential solutions to these perceived challenges (cont.): • More time, i.e., longer meetings, to permit more dialogue/conversation between the company and regulators • The need for more time was attributed to the common lack of knowledge and experience within a given rare disorder, necessitating more dialogue about the best way to evaluate the disorder • These longer dialogues would allow for more extensive information sharing and to ensure a common knowledge base, including regulators attaining a better grasp for the company's decision making process • Additionally, executives are seeking more time for experts to provide education to FDA reviewers looking at rare diseases

39. Key FindingsPharma/Biotech Execs • Industry executives proposed a series of potential solutions to these perceived challenges (cont.): • Look at ways to resolve the FDA/EMEA inconsistency, i.e., greater US/EU regulatory harmonization • Create incentives for the re-purposing/re-tasking of existing medications (since ownership of older molecules could present an IP challenge) • Screening solutions (i.e., identification of affected population) • For example, genetic screening of newborns

40. Key FindingsPharma/Biotech Execs • At the end of the meeting, pharmaceutical/biotechnology industry executives were queried as to their perceptions of the role (and potential role) of NIH: • NIH is perceived to support innovation and translational medication • Secondly, it is perceived to provide funding grants to support the development of orphan medications • However, the main challenge is perceived to be the small size of funding for rare diseases

41. Contents • Introduction • Key Findings • Academic Medical Researchers • Patient Advocates • Investment Community • Pharma/Biotech Executives • Summary & Considerations

42. Summary • There exist a number of shared / common challenges which are perceived to exist in the development of orphan products: • There are important pre-clinical development challenges, which have implications for researchers and corporations • There is a general lack of natural history data on rare diseases • There is a lack of validated animal models in rare diseases • There is a lack of centralized prevalence/ incidence data on rare diseases, making it difficult to assess the extent of the disease (as well as the commercial opportunity) • Important clinical development challenges were identified as well • First, the ability to identify, reach and enroll patients for clinical trials is difficult due to small numbers of patients • Secondly, several groups pointed out that there are statistical challenges when dealing with an ultra-small group of patients (especially who may have concomitant conditions and/or who are polypharmacy) • Third, identifying knowledgeable pool of investigators to conduct the clinical trials is a challenge • Orphan/rare disease viewed as a career path with less potential for success than working on established diseases – in other words, “career suicide”

43. Summary • Several important challenges pertaining to the regulatory aspects of orphan product development were noted across groups: • Identification and concordance on clinical endpoints and surrogate markers for approval • Transparency of the entire regulatory/approval process (particularly the public availability of communication between FDA and companies) • Perceived asymmetry of expertise between investigators and companies and regulators/reviewers • Potential future reimbursement challenges • The possibility of the recent Federal health care reform program mandating price controls and/or curtailing reimbursement

44. Conclusions • Several potential solutions were put forth by focus group participants, which include: • A global forum on orphan product development which would encompass the key constituencies: industry, regulators, NIH, academia and patient advocates • A Federal fund to support development of natural history data for rare diseases, which could be managed under the auspices of NIH • A handbook on orphan product development that would be applicable to a broad audience: researchers / academics, patient advocates, industry and investors • This handbook would set forth key expectations/guidelines at the various stages of orphan product development • Establishment of a centralized clearinghouse of data on rare diseases, encompassing natural history, epidemiology, incidence / prevalence both in the US and globally

45. Conclusions • Other solutions include: • Programs & resources to encourage young investigators to focus on orphan product development as a career path • An increased amount of education for academic researchers and clinical investigators on rare diseases • Education on the regulatory process/pathway for investigators • Education (esp. junior faculty and university technology transfer groups) on IP requirements that favor future commercial development