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3 Companies Looking to Capitalize on Orphan Designation with Multiple Catalyst

02/16/2017

OTC:BIVI
NASDAQ:AVXL
NASDAQ:ABEO

Orphan Designation Provides Incentives, Confidence to BioVie, Inc.

Orphan Drug designation can be a substantial benefit to small biopharmaceutical companies. When the U.S. FDA designates a drug for an orphan indication, it comes with certain advantages that save the developing company time and money, as well as protects the intellectual property of the drug from direct competition. This is important because developing new pharmaceutical products for a "rare disease or disorder" can be rather expensive, and at times unfeasible. The Orphan Drug Act of 1983 was specifically created to provide financial and certain market incentives to encourage the development of new drugs for orphan diseases.

For instance, Orphan Drug designation awards the sponsor company a tax credit in the amount of 50% of qualified clinical testing expenses. Importantly, those credits can be rolled forward up to 15 years for companies that have no tax liability in the year in which the expenses occur. Orphan Drugs are also eligible for significant government grants to defray the costs of development. For 2017, the amount appropriated is $30 million per year. The PDUFA fee (the cost the U.S. FDA charges a company to review the approval application for a new drug) is also waived for orphan drugs. For 2017, that saves sponsoring companies approximately $2.04 million per application.

Another important benefit of Orphan Drug designation is enhanced correspondence with the FDA during the development period. As part of the law, the U.S. FDA must provide the sponsor with "written recommendations for the non-clinical and clinical investigations." This is a big help in streamlining the development pathway. In fact, an analysis conducted by BioMedTracker in 2013 found that drugs with Orphan designation have a higher likelihood of approval than non-orphan drugs, at least during early-stage clinical development.

However, perhaps the most important benefit of Orphan Drug designation is that the U.S. FDA agrees to not approve an application from a different sponsor for the "same drug" for the same disease or condition for seven years post-approval. This protects the sponsor company from generic competition. In Europe and Japan, the protection is ten years post approval.

BioVie Inc. (BIVI)

In September 2016, BioVie Inc. (OTC:BIVI) announced the U.S. FDA granted Orphan Drug designation to BIV201 for the treatment of ascites. BIV201 is a potential new breakthrough treatment for ascites due to liver cirrhosis. Liver cirrhosis is advanced liver diseases often brought on by hepatitis, alcoholism, or non-alcoholic steatohepatitis (NASH). Ascites is the gastroenterological term for an accumulation of fluid in the abdominal cavity. There are no U.S. FDA approved pharmaceutical options for the treatment ascites. In fact, when patients fail conventional (unapproved) treatments, the only available option is surgical paracentesis.

There is a direct link between ascites and the growing problem of NASH in the U.S. It is estimated that 20-30 million Americans have NASH and approximately 1.5 million will go on to develop liver cirrhosis. Ascites is a direct complication of advanced cirrhosis and affects approximately 100,000 individuals in the U.S. each year. It results in 325,000 hospitalizations and 27,000 deaths per annum. This is a significant market opportunity given the unmet medical need, and likely something that larger pharmaceutical companies currently spending billions on R&D for NASH might be interested in.

Take for example a company like Gilead Sciences (GILD). Gilead is spending billions on R&D to reinvigorate its fledgling pipeline, and recent deals have been focused on NASH. In 2016, Gilead paid $400 million to Nimbus Therapeutics to acquire the rights to a Phase 1 drug for NASH. Gilead’s largest franchise, Harvoni® and Sovaldi® target hepatitis C, a leading cause of liver cirrhosis. These drugs combined for over $19 billion in sales in 2015! A drug like BIV201 could be a nice add-on to Gilead’s clear focus on liver disease and its complications. Other companies that are keen on expanding focus into liver disease include Allergan plc (AGN), Shire (SHPG), and Novartis (NVS). Shire is interesting because the company has made a commitment to targeting NASH and has significant experience in developing drugs for orphan indications.

BioVie Catalyst

BioVie's BIV201 is a potent vasoconstrictor used outside the U.S. for the treatment portal hypertension and other similar root causes to ascites. Management is looking to initiate a Phase 1b clinical trial with BIV201 in the near future. Orphan Drug designation facilities the advancement of BIV201 in the U.S. and will protect BioVie's intellectual property once approved. Importantly, as noted above, it also increases the odds of approval at this stage in development. That makes BioVie a name to watch as the company commences the Phase 1b trial.

Anavex Life Sciences Corp. (AVXL)

In May 2016, Anavex (NASDAQ:AVXL) received orphan drug designation for ANAVEX 2-73 for the treatment of Rett syndrome. Anavex Life Sciences Corp., is a clinical-stage biopharmaceutical company engaged in the development of CNS drug candidates. The Anavex’s lead compounds include ANAVEX 2-73, ANAVEX PLUS, a combination of ANAVEX 2-73 with donepezil (Aricept), ANAVEX 19-144, ANAVEX 1-41, ANAVEX 7-1037, ANAVEX 3-71, ANAVEX 1079, ANAVEX 1519 and ANAVEX 1066 being developed to treat Alzheimer’s disease and other central nervous system (CNS) diseases.

Alzheimer’s disease is an irreversible, progressive brain disorder that slowly destroys memory and thinking skills, and eventually the ability to carry out the simplest tasks. Estimates vary, but experts suggest that more than 5 million Americans may have Alzheimer’s.

ANAVEX 2-73 has recently shown promising therapeutic effects in human and mouse models of diseases like Alzheimer's, Parkinson's, Rett syndrome, and others ANAVEX 2-73 Phase 2a was designed primarily for safety, tolerability, bioavailability and exploratory dose finding. In summary, the open label trial in mild to moderate Alzheimer's patients is where most patients have not received optimal dose.

Anavex Catalyst

Anavex is on watch as promising 57-week data from its Phase 2a clinical trial in Alzheimer’s patients as well as positive preclinical data across a broad range of CNS diseases. Stay tuned as Anavex advances its upcoming clinical programs in Rett syndrome, Parkinson’s and Alzheimer’s disease.

Abeona Therapeutics Inc. (ABEO)

In January 2017, the European Medicines Agency (EMA) Committee for Orphan Medicinal Products has granted Orphan Drug Designation (EMA/OD/226/16) for Abeona’s (NASDAQ:ABEO) gene therapy program ABO-101 for children impacted by Sanfilippo syndrome type B (MPS IIIB), a rare autosomal recessive disease that causes neurocognitive decline, speech loss, loss of mobility, and premature death in children.

ABO-101 has previously been granted the U.S. Food and Drug Administration (FDA) Orphan Product Designation in the United States and received the Rare Pediatric Disease Designation as a pre-requisite part of the FDA’s Priority Review Voucher (PRV) process.

ABO-101, Abeona’s first-in-human, adeno-associated viral (AAV)-based gene therapy for MPS III (Sanfilippo syndrome), which involves a one-time intravenous delivery of a normal copy of the Naglu gene to cells of the central nervous system and peripheral organs with the aim of reversing the effects of the genetic errors that cause the disease.

Abeona Catalyst

Abeona is on watch as the FDA allowed the IND for a Phase 1/2 clinical trial of its lead drug. Abeona is soon going to be enrolling the first patients in a trial of its gene therapy for the lysosomal storage disease Sanfilippo B.

If the results are positive, the Abeo intends to move swiftly ahead with discussions with the FDA, aiming to get a breakthrough designation and agree to a design for a registration trial.

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