4 Orphan Drugs Making Waves in 2013: Sanofi SA (ADR) (SNY) and More

Page 1 of 2

Orphan drugs — medications meant for small patient populations with rare, dangerous diseases — can be a rewarding business for biotech firms that strike gold. Drugs can cost hundreds of thousands of dollars, and even with potential patients only numbering in the thousands, rather than hundreds of thousands, millions, or more like with some blockbusters — the dollars can add up. Small biotech firms have used orphan drugs to catapult them from speculative play to established player.

Which companies — and orphan drugs — should you be watching out for throughout the year?

Sanofi SA (ADR) (NYSE:SNY)NPS’s Gattex is ready to roll out
One of the most exciting orphan drugs to watch in 2013 won FDA regulatory approval back in December. NPS Pharmaceuticals, Inc. (NASDAQ:NPSP)‘ Gattex, its first successful drug and approved to treat short bowel syndrome, hasn’t helped the company’s stock so far this year despite the victory. Although shares are down more than 13% so far in 2013, NPS — and Gattex — deserve your attention.

Short bowel syndrome, or SBS, impacts the lives of 10,000 to 15,000 Americans. Patients afflicted with the disease rely on parenteral nutrition — intraveneous feeding — due to their bowel’s inability to absorb adequate nutrients, a costly treatment. Gattex helps reduce the reliance on that, and while it’s costly in its own regard — NPS priced the drug at $295,000 annually — the impact on patient quality of life makes it an attractive treatment.

It’s good enough that the company has projected peak sales of $350 million for Gattex. For a company that had previously relied on sales royalties for revenue, that’s just what NPS needs to secure its place in the biotech industry. It’s possible that Gattex could be approved for other, more widespread bowel-related indications as well; don’t count on such approvals, but their possibility means even more potential upside for this drug.

NPS has another orphan drug, Natpara, in its pipeline, and this company’s future looks strong. Keep a watch on Gattex’s rollout this year as NPS enjoys its first year of real sales. Predictions vary for 2013, but some analysts have pegged possible revenue this year at more than $21 million.

Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) squares off with Genzyme and Isis
Not all orphan drug firms are success stories like NPS, however. Aegerion Pharmaceuticals scored a big victory when the FDA approved Juxtapid, its orphan drug pill for rare cholesterol disorder homozygous familial hypercholesterolemia, or HoFH. Good news, right? Not when another biotech company barges into the same market.

First, the good news for Aegerion: Its FDA approval back in December gives the company its first drug on the market. Juxtapid won’t be cheap; Aegerion’s pricing the drug at more than $200,000 per year. It will need every dollar it can get, however, because the market for HoFH fits the definition of “orphan drug” to the letter.

Estimates on how many patients suffer from HoFH in the U.S., but they range from as few as 400 to as many as Aegerion’s own estimate of up to 3,000. The company expects to get 250-300 patients on Juxtapid by the end of 2013, bringing in revenue between $15 million to $25 million. However, the company’s job got a whole lot harder in late January.

The FDA approved another orphan drug for HoFH on Jan. 29, ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS)‘ and Genzyme’s Kynamro. The drug is a lot bigger for Isis than Genzyme as the latter is a subsidiary of major pharmaceutical firm Sanofi SA (ADR) (NYSE:SNY); nonetheless, it also brings in a significant direct competitor to Aegerion’s own lofty goals.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!