September 30, 2019 BARRON’S 19
data, and analyzing the data in a different way.
Also, new and exciting modalities are arising
in oncology, including the ability to edit cells in
the body, and alter T cells outside the body and
reinfuse them. We have seen a big push in the
development of drugs for rare diseases. The
patient populations are very small, so you need
fewer patients for trials. Things can move
quicker. But this is leaving out some of the big-
gest killers, such as heart disease and diabetes.
We need to see the science move there.
Why has the focus been largely on rare diseases?
Schenkein: Probably the riskiest part of creating
a new medicine is understanding the biology of
the targeted disease. In a rare genetic disease,
you know what the biology is. If you can figure
out how to fix what’s broken in the single gene
or amino acid driving this disease, your probabil-
ity of technical success is high. Ziad mentioned
the AveXis drug, which got approved based on a
trial of 15 patients. In a case like this, where you
need a much smaller number of patients to
prove that your drug works, the regulatory time-
line and your spend are compressed.
Casdin: Knowing the biology of these diseases
reduces the chance of developing a drug that has
little chance of working. On the regulatory side,
the FDA is designed as a risk-mitigation and
risk-management organization. From a risk per-
spective, any approved orphan drug by definition
will be used in a small number of patients, limit-
ing the danger of unforeseen toxicity in a large
patient population. Similarly, the potential for
dramatic positive impact is huge, as the alterna-
tive to a successful treatment for these patients
is often death or a life of high morbidity. The
agency often views the risk/benefit proposition of
a rare-disease drug program as far more favor-
able, and is more willing to give it accelerated
approval over a drug developed for a common
and complex disorder like heart disease.
Wang: In heart disease and other big diseases,
you need to run multiple drug trials with at
least several thousand patients. With rare-dis-
ease treatments—a rare disease is considered
one with 200,000 or fewer patients—you can run
a single trial with as few as 15 or 20 patients
and no control group. The drug-development
path can shrink from five to 10 years to maybe
two or three, and the cost is dramatically lower.
Then, approved drugs have pricing power, and
insurance coverage is usually good.
Bakri: Here is a good example. When David was
CEO of Agios Pharmaceuticals [AGIO], which
focuses on rare cancers and other rare diseases,
he sought to raise money from many investors,
including T. Rowe Price Group [TROW]. The
selling point for me was that he said the biology
is defined, the company would know early on
whether its drug worked, and it could sell the
drug itself. Unlike many typical Big Pharma
companies, such as Pfizer [PFE], a company
with a rare-disease therapy doesn’t have to hire
a huge sales force. I like the idea of investing in
a small company like that, which can redeploy
its capital to go after other diseases using a
similar playbook.
So, you gave him money?
Casdin: We all gave him money. He built a great
company and made investors money along the
way. That’s a really good investment formula.
What does the focus on rare diseases mean for
the treatment of common diseases?
Schenkein: Some companies are going after the
big diseases that cause so much morbidity and
mortality, but the biology is really hard. One of
the most important breakthroughs we need as a
society is to understand neurodegenerative
diseases, such as Alzheimer’s.
Wang: When I was in graduate school more than
15 years ago, we were already talking about beta
amyloid plaques and tau protein tangles in Alz-
heimer’s patients. Since then, to David’s point,
there has been little scientific advancement.
Casdin: There has been a lot of investment in
cancer research for a long time. It is time to
direct capital to teasing out the genetic drivers of
disease in other areas. Better data aggregation
and analysis is a critical component of this. There
is a huge and largely untapped opportunity to
Picks
Regenxbio
RGNX
$33.
Sarepta Therapeutics....................
SRPT
$72.
Gena Wang
Director,
Biotech Equity Research
Barclays
Note:Pricesasof9/26/
Source: Bloomberg
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