Student Dissertation

Agency : Orphan Drug Market; Pharmaceutical Industry; Drug Manufacturer; Market Capitalization; Market Analysis

Objective : • To study and analyze the trends in orphan drugs approval • To categorize the orphan drug manufacturer based on market capitalization and analyze the orphan market dynamics • To analyze the trends of mergers and acquisitions amongst pharmaceutical companies

Background : Rare/Orphan diseases are a large, complex, and heterogeneous group of conditions with a few similarities affecting a total of 350 million patients worldwide. There are 6,000-8,000 identified known rare diseases and fewer than 500 have treatment. The etiology for these known rare diseases is linked to genetics in approximately 80% of the cases. Children make up 75% of all identified cases with 30% of those never reaching their fifth birthday. With only a limited number of the population affected by a rare disease, the justification for investing considerable funds for clinical studies by the pharmaceutical industry has always been a challenge and a real barrier to innovation. The introduction of the Orphan Drug Act (ODA) for the US in 1983, has been the catalysts for many reformatory changes. Also, due to curtail in the mass market of patients, the pharma industry will be encouraged to look at rare diseases as an opportunity. The present study helps to know the trend in the number of new orphan drugs approval by FDA during 2010-2016. The shift of various pharma companies, which are segregated based on their market capital, towards orphan drug market and, the number of mergers and acquisitions that has happened during this time span. Aim: To get an overview of US orphan drug market figuring out the driving factors responsible for the shift of the pharma companies towards this unchartered area of therapeutics

Methodology : Study design and Tools a) Type of study: Non-Systematic review of literature. Desk research was undertaken b) Geographical scope: US. First to launch the orphan drug act to enable pharma companies to shift in this area c) Time frame of the study: The study is based on the pharma companies with orphan drugs approval by FDA during the period between 2010-2016. d) Type of data: Publicly available secondary research data sources were deployed

Findings : Through this study, it was analyzed that the percentage sales of orphan drug market are increasing with every succeeding year. The shifting of mid and small cap pharmaceutical industry has also been noticed besides the drifting of large companies. Also, it was assessed that the big industries have started acquiring the mid and small companies. This has resulted in increase in the overall value of the firm, better financial planning, diversification of the scope of operation, better research and development and reduced competition. Boost to the shift of pharmaceutical companies in this domain was observed after the enactment of orphan drug act by FDA which offered many incentives to the companies, thereby, influencing many companies for the shift in this area. Other factors include less competition as orphan market has still not been accepted by many firms due to great uncertainty associated with it.

Recommendations : A number of pharmaceutical industries have started expanding their pipeline in orphan market by smart utilization of technologies, but, still for many rare diseases medications are unavailable, which shows that there is need of right planning as well as understanding their risk and benefits.