Finding Very Valuable Patients

When your drug costs north of $200,000 per year, every patient counts. Find 50 patients and you've just added $10 million in revenue.

For drugs that treat rare orphan diseases -- the only ones that can fetch those high drug costs -- locating those patients isn't as easy as creating a print or television ad or hiring more sales reps to tout the product to doctors. Companies have to get creative.

Punny websites
Last week, Sarepta Therapeutics (NASDAQ: SRPT  ) launched a new website, named Let's Skip Ahead, to give families affected by Duchenne muscular dystrophy a place to get more information about how exon-skipping drugs can help treat the disorder. In addition to its lead drug eteplirsen, which is designed to skip exon 51 in the dystrophin gene, Sarepta is working on other treatments to skip other exons with mutations in them.

Sarepta is years away from those drugs hitting the market, but the website is useful now because it'll allow the biotech company to collect contact information for those patients. As Sarepta and its direct competitor -- Prosensa (NASDAQ: RNA  ) and partner GlaxoSmithKline (NYSE: GSK  ) -- develop drugs that treat less-prevalent mutations, there's likely to be competition to enroll patients in the clinical trials. Having a relationship with the family should help Sarepta fill out the clinical trials, saving time that more than makes up for the cost of running the site. If they haven't already, Prosensa and GlaxoSmithKline should consider developing a website of their own now, well ahead of when they need to find patients for their trials.

PTC Therapeutics (NASDAQ: PTCT  ) should consider launching a companion website, "Let's Not Stop Ahead." While certainly not as catchy, it's fitting and just as punny. PTC Therapeutics is developing ataluren, a drug designed to treat mutations in the dystrophin gene that cause stop codons, which truncate the protein, making it inactive. The biotech company also has two other drugs, utrophin and serca2a, it's trying to develop for Duchenne muscular dystrophy.

Support first
BioMarin Pharmaceuticals
(NASDAQ: BMRN  ) , which sells Kuvan to treat phenylketonuria, runs PKU.com. The website doesn't read like an advertisement for the drug at all. It took me three clicks from the main page to get to a link to the Kuvan website, and that's only because I was specifically looking for it.

The thing is, BioMarin doesn't need the PKU website to sell Kuvan. It's more effective to get phenylketonuria patients and their parents integrated into the community and let current users sell the newcomers on the treatment. There aren't any other options for treating phenylketonuria other than adjusting the patient's diet, which is often not sufficient.

Sanofi's (NYSE: SNY  ) Genzyme group runs a website to support its relationship with different advocacy groups and its Rare Disease Day activities (Rare Disease Day is the last day in February, falling on the rarest day of the year every fourth year).

It's hard to know how well a comprehensive website like this brings in patients -- my guess is very little -- but the site gives Sanofi a place to highlight its activities, making for good press, which could indirectly help sales. Looking like a good guy in this industry is half the battle.

There's an app for that
Like Duchenne muscular dystrophy, cystic fibrosis is caused by different mutations in the same gene. Vertex Pharmaceuticals (NASDAQ: VRTX  ) has an app available on iTunes and Android Play called CF GeneE.

The app has very little branding. In my time tinkering with it, I only saw one mention of Vertex and no mentions of Kalydeco, its FDA-approved drug to treat the G551D mutation in cystic fibrosis patients. Like BioMarin, Vertex doesn't have to worry too much about convincing patients to take its drug; Kalydeco is the only drug available to treat G551D mutation. Getting patients more information and supporting doctors who can recommend the app as a resource makes the app worth developing.

Investing in orphan drugmakers
Because every patient counts, investors should be prepared for rocky sales as orphan drugs launch. Everything from doctors going on vacation to sporadic purchases by government entities can cause extremely uneven sales. There's money to be made investing in orphan drugmakers, but investors need to be aware of the bumpy roads they walk.

Editor's note: Sarepta and the subheading for "Punny websites" were misspelled in a previous version of this article. The Fool regrets the error.

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  • Report this Comment On October 08, 2013, at 6:41 PM, EllenBrandtPhD wrote:

    Brian,

    Sarepta is NOT "years away" from product launches beyond DMD.

    In fact, the news - along with massive Insider buying - that has propelled the stock upwards the past few weeks has been CEO Chris Garabedian's statement at the Morgan Stanley and Baird conferences that the company would very shortly announce at least two new products to be introduced - i.e. brought to trial stage - first quarter 2014.

    Chances are that one of the new products will involve Tuberculosis, the other horrible viruses which may also be biological weapons threats, like Ebola and Marburg.

    But an intriguing paper which came out in a top medical journal just a few days ago shows that Sarepta's technology may also be of use in treating various kinds of heart disease.

    The other thing to note about your "several years away" comment is that Sarepta may well be taken over by a Big Pharma entity THIS year or next.

    Yes, Garabedian has said that mangement doesn't want that. What else is new?

    But the speculation has been greatly bolstered by comments from Deutsche Bank and others that Sarepta's portfolio of patents and technology could be worth as much as $239 per share, at the current share count of a little over 30 million shares. That's certainly do-able by GILD or Celgene, where many current SRPT researchers come from, or other possibilities, including GSK itself, if it gives up on RNA, which many believe it should.

    Despite the biotech sector's rout today, the Shorts are actually still under great pressure here.

    Chances are, the next spate of filings will show some of the stock's biggest supporters have doubled up or at least increased substantially, perhaps including SRPT fan George Soros, an early supporter who has made a bundle on the stock and is likely to make much more..

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