NEW YORK, NY – (NewMediaWire) – December 14, 2021 – PCG Digital — Drug development is complex, lengthy and expensive, and not without its risks. Bringing a drug to market takes years, with costs quickly running into hundreds of millions of dollars, and no promise of success at the end of it all.
Rare and orphan indications provide an R&D ‘sweet spot’ for biopharmaceutical companies pursuing drug development. Drugs for rare diseases have a high rate of success in obtaining regulatory approval, with around 26% being approved, versus 11% for all other drugs.
Rare diseases affect fewer than 200,000 individuals and of the more than 7,000 rare or orphan diseases, 90% are without any FDA-approved treatment. Drugs that make it to market have defined, concentrated patient populations, and limited or no competition from established therapeutics. Orphan drug development represents a lucrative opportunity for drug developers and can often be more profitable than non-orphan therapeutics.
On the FDA Fast Track
The market for rare diseases is robust. In 2019, nearly half of all FDA approvals (44%) were for orphan drugs. Early, and sometimes more frequent, discussions with the FDA can help reduce the uncertainty of how applications will be received, helping with planning and managing expectations both in and out of the clinic.
Quoin Pharmaceuticals (NASDAQ: QNRX), a specialty pharmaceutical company developing therapeutics for rare skin disorders, is an excellent example of a company that has found that R&D sweet spot. Quoin’s management team has received very constructive feedback from the FDA regarding its lead candidate, QRX003, for Netherton Syndrome, and now has a clear pathway to approval. The FDA’s supportive position has resulted in the potential for a lower criteria for a successful clinical outcome. In addition, QRX003 potentially qualifies for Rare Pediatric Disease Designation and a freely tradable Priority Review Voucher on approval, which could result in a net cash influx of approximately $100 million. The product also qualifies for a number of expedited approval pathways.
Although patient populations for rare and orphan diseases are smaller in scale, they can be well-defined and are often geographically concentrated. Due to the rarity of these conditions, a small number of specialist physicians often treat entire patient groups, and these can be more easily identified and targeted for marketing. As the only available, approved treatment for a specific condition, orphan drugs have higher pricing power and can be highly profitable in spite of smaller addressable market sizes. The mean orphan drug cost per patient of the top 100 US orphan drugs is almost 4.5 times greater than the non-orphan drug cost, and orphan drug sales are forecast to reach $217 billion in 2024.
Quoin Pharmaceuticals is positioning QRX003 as a ‘whole body, whole life’ therapeutic, meaning that patients will apply the once-daily topical lotion to their entire skin surface, for the rest of their lives, providing a long-term market opportunity for the company. Quoin also intends to pursue the development of QRX003 for related rare skin disorders for which there are currently no approved treatments or therapies, such as SAM Syndrome and Peeling Skin Syndrome.
For investors and shareholders, growth, progress and value are key. Strong FDA engagement, incentivized drug development programs and low market competition are an attractive value proposition for investors. With a $25 million cash runway, Quoin has been adding value beyond drug development, by entering into licensing and distribution partnerships to ensure a wider commercialization of its products beyond the company’s core US and EU markets.
Quoin recently entered into an exclusive license and distribution agreement with AFT Pharmaceuticals for the commercialization of QRX003 in Australia and New Zealand. It has also inked an exclusive agreement with rare disease and specialty pharmaceutical company, GenPharm, for the MENA region. Additional out-licensing opportunities are being actively pursued by the company.
Quoin is targeting regulatory approvals for its pipeline of therapeutics in the US and Europe in 2024, 2025 and 2026 and plans to establish its own commercial infrastructure for sales and distribution in both geographies.
Finally, Quoin has demonstrated its commitment to longer term R&D opportunities by in-licensing a novel protein from the Queensland University of Technology in Australia.
Since 1983, when the Orphan Drug Act changed the face of drug development, rare and orphan drugs have had market-creating impact. Beyond the life-altering, and often life-saving, attributes of these treatments, orphan drug designation has a positive financial impact on smaller drug developers. Tax credits for R&D costs, grants and market exclusivity all make for an attractive commercial opportunity for drug developers and value creation for investors.
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