Are Drugs for Ultra-Rare Diseases the Future of Biotech? Francois Nader of NPS Weighs In

Over the last ten years, the global pharmaceutical industry has undergone dramatic changes. In the 1990s, big drug companies made hundreds of billions of dollars selling slightly improved versions of their competitors’ drugs; think of the epic battle between cholesterol-lowering drugs Lipitor and Zocor. Since then, however, an entirely new business model has emerged: developing drugs for rare, or "orphan" diseases, which are far easier to get through the FDA, and for which companies can charge significantly higher prices. The latest entry into the field is NPS Pharmaceuticals’ Gattex, which was approved last December for the treatment of short bowel syndrome.

Just prior to gaining the FDA’s nod, I spoke with NPS CEO Francois Nader about his company’s prospects, at the 2012 Forbes Healthcare Summit. What follows is a lightly edited transcript of our conversation.

ROY: It’s been an eventful year for your company, and a long road for teduglutide [the generic name for Gattex]. You’ve been developing this drug for a long time, prior to even you being CEO, I think, if I recall.

NADER: Well, it has been 17 years.

ROY: Yeah.

NADER: Since [University of Toronto endocrinologist] Dan Drucker discovered teduglutide back in the day. So it has been a long, long journey. But we’re very pleased with the prospect of outcome.

ROY: And what do you think has been the change? Has it really been the new Phase III trial that’s led to the change in the regulators’ attitude towards the drug? Or has it been a range of things related to look at some of the old data along with the new data?

NADER: Well, it’s a combination of all of the above. The new data that we had were very compelling, both in terms of meeting the primary endpoint, in terms of the safety profile of the product, but more importantly, given the extension data and the number of patients who were weaned off parenteral nutrition. I mean this is the best outcome that these patients could expect to have.

ROY: Tell us a little bit about what Gattex does for patients.

NADER: So let me start with short bowel syndrome first. It’s a very rare condition, fortunately. And this condition affects people who, for multiple different reasons, would have a resection of their small gut. And with this resection, they lose the ability to absorb enough nutrients, fluids, and actually, what is needed for their survival.

So the only thing they have now is to rely on parenteral nutrition, which is intravenous nutrition that is given anywhere between ten to 12 hours a day, five, six, seven days a week. So with that, you can imagine the impact on the quality of life. You can imagine the impact on their employment, on their social abilities. But also, parenteral nutrition also carries its own share of complications.

So what teduglutide does is, very simply, reduce the dependence on parenteral nutrition. And we have demonstrated that when patients are on Gattex for up to a year, for example, they can reduce their reliance on parenteral nutrition by up to 50 percent. And in our studies, every one out of seven patients have been able to be weaned off and regain the complete independence of parenteral nutrition.

ROY: And what’s the economic value of that? By savings that much TPN for that patient, how much is that saving the health care system plus, of course, their how would you describe or think about the economic value?

NADER: Well, there are multiple ways of looking at the economic value and the value proposition. The first is obviously what you just mentioned, which is the direct correlation between the reduction and the reduction of parenteral nutrition, the reduction in cost. So the parenteral nutrition cost ranges between about $80,000 to $200,000 a year. And with that, we have a direct correlation, if you will. So if patients can reduce their PN by 50%, that’s a direct saving.

What is probably more important is the fact that, for those 15% of the patients who are weaned off, not only there is a saving in terms of the direct cost of parenteral nutrition, there is also a direct saving related to all the complications associated with parenteral nutrition that, in some patients, could lead to the need for a liver transplant, which is a very expensive, as you could imagine, procedure.

Last, but certainly not least, we have to look also at the social impact of these patients, who will regain the ability to live a normal social life, regain the ability to be employed and be productive in society. So the way we look at the value proposition of Gattex is all the three elements combined.

ROY: And what’s the estimate of the actual patient population in the U.S., say, with short bowel syndrome?

NADER: So, here is how it goes. We have prevalence, and we have addressable population. As you probably know, in the orphan space, there is always this dichotomy between prevalence and the reality of the bottom-up counting the number of patients which would represent the addressable population.

Based on three studies that we’ve conducted, the prevalence is in the range of 10,000 to 15,000 patients in the U.S. When we look now at the addressable patients, and we start counting from the bottom-up, the number is significantly lower. And this is not unique to Gattex. We’ve seen it with virtually every other orphan product.

ROY: Do you think there are other indications where teduglutide might be applicable? I know that, in the past, you’ve looked at it in early stage trials and other areas where GLP-2 is a relevant target. [Gattex is an analogue of glucagon-like peptide 2, a natural hormone that is involved in intestinal growth and function, reduction in bone breakdown, and protection of nerve cells.]

NADER: Yeah, GLP-2 is a very interesting compound, because it could potentially have, to your point, multiple indications. But the very first indication that we will pursue is pediatric short bowel syndrome. There is a huge unmet medical need. And fortunately for young children who are impacted by short bowel syndrome, they are, at the current stage, having to be on parenteral nutrition for the rest of their lives, plus the mortality is extremely high, and the cost to the health care system is very, very significant.

So our next program that we will be initiating in 2013, if indeed will get the approval by end of year, will be the pediatric indications. There are other indications that will come after that. But I believe that pediatric indication is a true and unmet medical need. And it will be an extension of our current adult indication.

ROY: I know that prior to the advisory committee meeting that you just got through, a lot of people were concerned about the emergence of [possibly cancerous] polyps and things like that with GLP-2 administration. Would that be the kind of thing that would be more of a concern in a pediatric population? Or do you think the safety database you already have addresses a lot of that?

NADER: Well, the safety database is solid, and we’re building it as we go. So for example, one of the next post-approval commitments, or post approval requirements, might very well be a registry. And this is very important, because we don’t have a formal registry for short bowel syndrome. So this will enable us to follow, over a period of time, not only the short bowel syndrome patients who are on Gattex, but those who are not, and have a way to compare both groups.

So when it comes to pediatrics, we are very cognizant of the particular aspect of the pediatric population. But at the same time, and as we’ve seen it with the advisory panel, physicians have to put the benefit risk per patient into perspective. And the advisory panel was very complimentary about the efforts that we made as a company to make sure that the patients can use the product in a safe and effective way.

ROY: What were the other key takeaways or discussion points at the panel meeting?

NADER: Well, it is interesting. First of all, we were very gratified by having a unanimous vote, which is quite rare. But more importantly, or as importantly, we were very well prepared. And the interactions with the agency, in preparations for the panel, were very efficient. We had a very active communication with the agency.

And last but certainly not least, we were very pleased with the angle the panel took, which is, as I mentioned, looked at the benefit risk of the patient and quantify the benefit, specific the weaning off, in comparison to the adverse event profile of the product, which, for most of it, is really related to the pharmacological properties of Gattex.

And all this has been put in perspective with the fact that we have an orphan population. And Gattex will be the first product to serve this population, long term short bowel syndrome population, in 40 years. And that’s a pretty long time.

ROY: Right. As you know, parenteral nutrition isn’t as widely used in other developed markets, or I should say, it’s heterogeneous. How do you think about the utilization of Gattex in international markets?

NADER: Well, the international markets for us are currently managed by Takeda. So we licensed our rights ex-North America to Takeda. And they got an approval in Europe in the summer. And they are in the process of securing reimbursement and launching the product in Europe first.

Probably the major difference is, in Europe, you have very, very large centers of excellence. So many of the patients, if not most of the patients with short bowel syndrome, tend to migrate to those very large centers of excellence, who cater for a wide geographic area. In the U.S., it’s a little bit more fragmented.

ROY: Would you say that the number of patients or the proportion of patients who were using parenteral nutrition—how would you compare the ratios of the U.S. to Europe?

NADER: The medical practice seems to be pretty much at par between the U.S. and Europe. We’ve seen this in the clinical trials, where there was practically no distinction in terms of treatment of short bowel syndrome in the U.S., Canada, and Europe.

ROY: Great. Francois Nader of NPS Pharmaceuticals, thanks for your time.

NADER: Thank you so very much.

This piece originally appeared in Forbes

This piece originally appeared in Forbes