Imagine finding out that you have a disease that only a handful of people around the world have. Kirstie and Catherine Fields don't have to imagine it. The teenage Welsh twins have what is probably the world's rarest disease -- Fields Condition. It's named after them, because they're the only two people known to have the progressive muscle disorder.
The National Institutes for Health estimates that there are around 6,800 known rare diseases. Years ago, individuals suffering from these diseases didn't have much hope that drugs would be developed to help them. Not all patients with rare diseases are so hopeless now, though.
The U.S. and the European Union established orphan drug approval programs to provide incentives for pharmaceutical companies to develop drugs for rare diseases. In the U.S., drugs that treat diseases that affect fewer than 200,000 people (or about one in 1,500) can receive orphan status. In Europe, the threshold for orphan status is for diseases that affect fewer than one in 2,000 people.
The orphan drug programs have worked incredibly well. In the decade leading up to 1983, when the U.S. Orphan Drug Act was enacted, less than 10 drugs for treating rare diseases were approved. Since 1983, more than 200 orphan drugs have made it to market. Here are three of those rare diseases that now have treatments -- from drugs that can generate profits nearly as uncommon as the diseases themselves.
1. Short bowel syndrome
Short bowel syndrome, or SBS, results from surgical removal of most of the small intestine (frequently because of a digestive illness such as Crohn's disease) or a congenital short bowel. Patients with SBS often don't absorb vitamins and minerals adequately and can experience abdominal pain, malnutrition, and fluid depletion, among other symptoms. An estimated 10,000 to 20,000 people in the U.S. suffer from SBS, according to the Crohn's and Colitis Foundation of America.
Although there is no cure for SBS, three drugs have been approved in the U.S. for treating the disease. The most recently approved treatment is Gattex. NPS Pharmaceuticals (NASDAQ:NPSP) received Food and Drug Administration approval for the drug in late 2012. Gattex works by spurring growth in mucous membranes involved in absorption and secretion.
The price tag for Gattex is a staggering $295,000 per year. NPS says its research shows there are around 3,000 to 5,000 adult SBS patients who are candidates for its drug. Assuming the actual number is near the midpoint of the range, that reflects a market potential of more than $1.1 billion annually. Not bad for a drug that cost around $250 million to develop.
2. Paroxysmal nocturnal hemoglobinuria
Paroxysmal nocturnal hemoglobinuria, or PNH, is a blood disease that frequently leads to life-threatening blood clots. Symptoms of PNH include red urine and anemia. Patients can require blood transfusions. Only one to two people in a million suffer from the disease.
The FDA has approved only one drug for treating PNH -- Soliris from Alexion Pharmaceuticals (NASDAQ:ALXN). Soliris is also used in the treatment of another rare blood disease, atypical hemolytic uremic syndrome, or aHUS, which affects around one in 500,000 Americans each year.
Soliris costs $440,000 per year, making it the world's most expensive drug. Alexion made more than $1.1 billion from sales of the drug last year, which was 45% higher than the year before. The pharmaceutical company's profit amounts to nearly 24% of those sales dollars -- and those profits continue to grow.
3. Homozygous familial hypercholesterolemia
Homozygous familial hypercholesterolemia, or HoFH, is a rare genetic disorder that results in very high bad cholesterol levels, which can lead to serious heart diseases. HoFH can sometimes require removal of cholesterol in a manner similar to dialysis and occasionally even liver transplants. The disease occurs in around one in a million people.
Aegerion Pharmaceuticals (NASDAQ:AEGR) received FDA approval in late 2012 for Juxtapid in the treatment of HoFH. Soon afterward, the FDA approved another drug targeting HoFH, Kynamro, which was developed by Isis Pharmaceuticals (NASDAQ:IONS) and marketed by Sanofi's (NYSE:SNY) Genzyme unit.
Juxtapid costs up to $295,000 per year, while Kynamro's price tag is $176,000 per year. Analysts project that Aegerion could ultimately see annual sales ranging from $300 million to $450 million for Juxtapid. That lines up with the $400 million peak sales estimated for Kynamro by Natixis Securities. These sales figures sound pretty good, but remember they're only projections at this point for peak sales down the road.
HoFH is a rare disease in another sense in that it has two drugs on the market. This can be great news for patients. Because it also splits the potential profits among multiple players, though, it isn't as great for Aegerion, Isis, and Sanofi.
A long way to go
Much progress has been made in treating the world's rarest diseases, thanks largely to governments that have established orphan drug programs. However, there remains a long way to go. Well over 6,000 rare diseases remain for which there are no available treatments. For the rarest of the rare diseases, there still isn't enough hope.
Fool contributor Keith Speights and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.