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Aegerion Pharmaceuticals, Inc. (AEGR), NPS Pharmaceuticals, Inc. (NPSP): Three of the World’s Rarest Diseases (and the Uncommon Profits They Bring)

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.

NPS Pharmaceuticals, Inc. (NASDAQ:NPSP)

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, Inc. (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 Pharmaceuticals, Inc. (NASDAQ:NPSP) 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.

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