As best I can tell, Novartis (NYSE:NVS) has discovered a great drug, Ilaris, which was approved yesterday. Unfortunately, it's not likely to be a blockbuster for a while.

Ilaris was approved to treat CAPS. No, not the Motley Fool investing community; this CAPS (cryopyrin-associated periodic syndrome) is a group of auto-inflammatory disorders that causes the immune system to overreact. Come to think of it, overreacting is something I seem to do when I log in to see that my (Fool) CAPS score has gone down, so maybe the two are similar.

CAPS is an ultra-orphan indication. When Regeneron Pharmaceuticals (NASDAQ:REGN) got Arcalyst approved to treat CAPS last year, the company reported that the frequency of the disease is about 1 in 1 million people in the U.S. -- meaning about 300 patients to treat. That's much smaller than the populations that Biomarin Pharmaceuticals' (NASDAQ:BMRN) and Genzyme's (NASDAQ:GENZ) orphan drugs treat and the sales show it: Regeneron only expects to ship out $15-$20 million worth of Arcalyst this year. Even if Ilaris takes the entire market, and it'll likely take a big chunk considering that it needs to be injected less often than Arcalyst, it'll still be not much more than a rounding error for Novartis' revenue.

So why are Novartis and Regeneron developing drugs that treat so few people? Because the protein that is overproduced in CAPS patients, interleukin-1 beta, has been implicated in causing symptoms of patients with other diseases including gout, systemic juvenile idiopathic arthritis and type 2 diabetes.

That last one should pique your interest. There are over 23 million diabetics in the U.S. and most of those are type 2. Merck (NYSE:MRK) sold $1.4 billion worth of Januvia last year. That's about as far from orphan-drug status as you can get.

Getting approved for a small indication and then working up from there is a pretty common strategy -- think Onyx Pharmaceuticals' (NASDAQ:ONXX) Nexavar and Pfizer's (NYSE:PFE) Sutent treating fairly rare kidney cancer before moving into the larger breast cancer market -- Novartis and Regneron have just taken it to the extreme.

An orphaned further Foolishness: