Rare Disease Therapeutics

America's First Exclusively Orphan Drug Company

Orphan Pharmaceuticals Offers Hope for Patients with Rare Disorders

September, 1999 Nashville Medical News

   People with rare illnesses, known as, “Orphan” diseases, may feel like forlorn orphans as large pharmaceutical companies turn away from their less profitable drug needs. But thanks to advantages from federal orphan drug legislation in the mid-80’s, developers and marketers of orphan pharmaceuticals are carving a financially comfortable niche – and saving lives.

  One such company is Orphan Pharmaceuticals, U.S.A., Inc., founded in Nashville in 1991 as one link in a chain of global drug companies that specialize in orphan product development. The company was established by its president, Milton Ellis, a former executive with then Bristol-Myers, and Bo Allen, vice president of market and business development, who has held positions in several start-up and mid-size drug and bio-technology companies. Together, the partners boast 65 years of corporate pharmaceutical experience.

  “The major pharmaceutical companies don’t have any interest in drugs that have a sales volume of less than $200 million to $400 million. Of course, all of these orphan products, by definition, are for conditions with a prevalence of less than 200,000 patients in the United States,” Ellis says.


“We’ll probably reach about 2,000 patients in the United States with this product. So it’s a patient-driven enterprise, more than profit-driven.” Milton Ellis President

More than 11,000 diseases have been categorized by the federal Food and Drug Administration as orphan disorders, and since passage of the Orphan Drug Act, about 13 orphan drugs annually receive FDA approval. The act gives a drugs’ sponsor marketing exclusivity, a seven-year shelter against competition. It also offers:

Grants to help cover direct costs of clinical research.
Protocol assistance to help particularly the smaller companies negotiate the maze of FDA review.
A tax credit that allows a sponsor to claim 50% of clinical trial costs as a credit against taxes owed.

While Nashville’s Orphan Pharmaceuticals hasn’t yet tapped the FDA grants, it may in the future, Ellis says. The company has four drugs on its front burner and is currently selling one drug in Canada that is expected to receive FDA approval in about six months. That drug is dubbed NTBC, designed for children who can’t metabolize the amino acid tyrosine. Children with this genetic disorder eventually die of liver failure, but one NTBC pill daily, allows them to lead normal lives.

  “The drug has been recognized by the FDA as an essential, life-saving drug, so it’s been given fast-track review,” Ellis explains. “It’s also been given a rolling review, which means you don’t have to submit all of the information at once. You can submit toxicology, and then you can submit chemistry, pharmacy, and clinical at separate times for review, whereas with traditional pharmaceuticals, you submit the whole package.   Another drug is flammercerium, a topical therapeutic agent for severe burn patients. The product helps stop septic shock and cuts mortality by 50%. Orphan Pharmaceuticals is involved in a 15-center study of the product across the country, and approval and registration are expected in three to five years.

  A third product of Orphan Pharmaceuticals is a new delivery system for HES-Deferoxamine, currently the only treatment for a rare disorder that stops its victims from clearing iron from their bodies. From infancy, these patients require eight-hour infusions five to six nights a week.

  “The problem is the tremendous caregiver burden that this imposes, as well as the life restrictions it puts on the patient,” says Allen, whose company has taken a natural starch polymer and attached it to the drug. The starch helps the drug stay in the blood stream for about a week, after one 30-minute infusion. “And that’s with fewer side effects and a greater safety profile,” Allen says. “This is the first really big advance for treatment of this disorder in about 20 years.” Phase 3 trials are scheduled to commence in January, and Allen and Ellis are hoping for availability by 2002.

The fourth drug is known as PTH34, a human parathyroid hormone under development in collaboration with the National Institute of Health. Orphan Pharmaceuticals’ involvement with PTH34 was the result of a request for help from a young woman in Iceland who turned to affiliate Swedish Orphan International AB. The sister organization in Stockholm called Nashville to facilitate the product’s development.

“It’s not a huge opportunity financially, but it’s a significant opportunity for us,” Ellis says. “We’ll probably reach about 2,000 patients in the United States with this product. So it’s a patient-driven enterprise, more than profit-driven.”

“Running a
company like this requires a lot of business savvy. You have to be very frugal, decisive, and pragmatic...”

Bo Allen, VP of Market and Business Development

Allen says it’s the individual-helping-individual nature of orphan pharmaceuticals that drew Ellis and him into the business. “I’ve been in big pharma and big biotech, and you deal with issues such as key financials and market share, and basically you have an investor-driven company with high risks and high rewards. This orphan drug venue is completely different,” Allen says. “Milton, for example, not only knows the physicians, but the patients and their families for whom he’s trying to get these drugs available. It’s personal.”

He continues, “Running a company like this requires a lot of business savvy. You have to be very frugal, decisive, and pragmatic, while at the same time everything is colored with shades of compassion and idealism that are not in any other pharmaceutical venue. It’s a neat company, and a neat experience.”

By: Sharon H. Fitzgerald