An ODD is a status granted by the FDA in the U.S. or EMA in Europe for pharmaceutical drugs being developed specifically to treat a rare disease, defined as affecting less than 200,000 patients in the U.S. and/or 500,000 patients in the E.U. In short, the designation incentivizes and supports the development of certain treatments, increasing access to therapies for these patients in dire need for new options.
Some companies have generated billions in sales by developing drugs via the ODD pathway. According to Pharmaphorum, the leaders are Bristol-Myers Squibb (NYSE: BMY) with 24 orphan drugs, followed by Sanofi (NYSE: SNY) with 23, and Takeda (NYSE: TAK) with 22. Evaluate’s report looking at the industry for the next five years states that orphan drugs are “the fastest- growing segment of the pharma market and dominate FDA approvals.” It adds that the top ten biggest orphans will be worth $64 billion globally in 2028, by which time orphans will comprise a fifth of all non-generic prescription drug sales ($1.5 trillion).
There are several reasons why investors value orphan drug designation. First, is the aforementioned capital opportunity. Consider the scary reality that currently more than 90% of rare diseases still have no FDA-approved treatment and that 7,000+ rare diseases affect over 30 million people in the U.S. alone. Extrapolate that to a global scale the financial implications are enormous.
Second, an ODD can be a sign that a company has a compelling drug candidate that could address one of these areas of significant unmet medical need. Third, ODD comes with a number of financial incentives, such as tax breaks, waiver of the Prescription Drug User Fee (currently $3 million), grants, reduced developed time, and extended market exclusivity up to seven years, which further sweetens the financial pot. These factors can make developing orphan drugs more attractive to pharmaceutical companies and investors alike.
NurExone checks all the boxes for upside with exoPTEN and earning the ODD is a significant milestone for the company. The designation covers the use of mesenchymal stem cell (MSC) derived small extracellular vesicles (EVs) loaded with short and modified interfering RNA (siRNA) targeting the phosphatase and tensin homolog (PTEN) protein for acute spinal cord injury, as implemented in the company’s ExoPTEN drug under development. It is worthy to note that NurExone’s ExoPTEN is one of a relatively small number of drugs for acute spinal cord injury with an Orphan Drug Designation.
“Orphan-drug designation is expected to streamline our go-to-market, shorten our regulatory process saving the company millions of dollars, and provide valuable market exclusivity,” said Dr. Shaltiel, CEO of NurExone in a press release on the new ODD. “We appreciate the formal recognition of the potential impact of our therapy on the lives of patients suffering from acute spinal cord injuries,” he added.
NurExone holds an exclusive worldwide license from the Technion and Tel Aviv University for the development and commercialization of the technology. Proof-of-concept was demonstrated at the Technion, Israel Institute of Technology where a rat with a completely severed spinal cord and paralyzed rear legs regained functionality of its rear legs after exoPTEN treatments. A video showcasing the amazing recovery can be viewed at https://nurexone.com/study-results/.
The company is still flying under the radar of the general investment community as evidenced by a market capitalization of just CDN$14 million (US$10.3 million), but the trend looks to be changing. An uptrend began in late-September and has seen shares gain 50 percent already. With the ODD and upcoming human trials planned, odds are more people are going to start hearing about NurExone and its revolutionary treatment.
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NurExone Biologic Inc. (TSX-Venture: NRX) Full Corporate Write-Up: Click Here.
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