David Blaustein waited seven years for the phone call that finally came in December 2010 from BioMarin Pharmaceutical Inc. (BMRN), a maker of medicines for rare diseases.
Blaustein’s 8-year-old son has achondroplasia, a genetic condition that’s the most common form of dwarfism. A doctor turned investor, Blaustein spent years trying to find any company focused on the disease, which affects fewer than 30,000 people globally and for which there are no approved medicines. BioMarin, he learned, was about to announce it was at work on what could be the first one.
“We were trying to raise money and put together scientists and academics, but it was all so tough,” said Blaustein, managing director of health-care investing for Suttonbrook Capital Management in New York. His spirits lifted when he saw BioMarin’s data of tests performed on mice. “People who are knee-deep in genetic diseases say this is one of the most dramatic animal model recoveries they’ve ever seen,” he said.
Typically Blaustein’s son would have to wait eight to 15 years for a drug to reach the market from the earliest stages of testing. BioMarin expects it can do it in half that time.
“Our last three drug approvals have been five years, four years and three years,” Hank Fuchs, chief medical officer for the Novato, California-based company, said in a telephone interview. “Compared to an industry average of eight, we do an average of four.”
BioMarin is one in a growing field of companies looking to profit by treating rare diseases. They develop medicines for as few as 5,000 to 10,000 patients worldwide and make returns by charging as much as $400,000 a year per patient for drugs. The U.S. and Europe give drugmakers exclusive marketing rights to focus on these so-called orphan diseases with no other treatment options, and smaller patient populations mean fewer participants are needed for clinical trials.
It’s a business model that appeals increasingly to investors and large drugmakers that need to refill drying pipelines. Despite the medicines’ steep pricetags, health insurers normally don’t fight the claims because there are so few patients. The drugs also can cut down on medical costs by tackling disorders that cause expensive and recurring health issues, according to Fuchs.
BioMarin’s medicine for dwarfism, BMN-111, is just starting human trials. It’s designed to correct a genetic defect that causes abnormal cartilage and bone formation, leading to severely shortened bones. Men with achondroplasia typically grow to 4 feet, 4 inches (131 centimeters), and women to 4 feet, 1 inch, on average, according to BioMarin.
The company, whose top medicines replace enzymes needed to break down waste products in cells, isn’t trying to cure shortness, Fuchs said. It’s addressing achondroplasia by targeting and then trying to correct the underlying genetic problem.
“Achondroplasia is not a disease that just stunts growth,” Fuchs said in a telephone interview. “Short is part of this, but there are many other medical problems associated with it.”
Patients need many treatments to address the effects of abnormal bone growth, said William Wilcox, a professor of pediatrics and biomedical sciences at the Cedars-Sinai Medical Center in Los Angeles. He’s an adviser to BioMarin, and has been working on achondroplasia since the gene that causes it was discovered in 1994.
The disease can cause compression of the spine, bowing of the legs, fluid build-up in the ears, unequal-sized jaws and obstructed breathing during sleep, many of which require surgery or other procedures, Wilcox said. Some patients undergo limb- lengthening, a process that involves breaking and re-breaking the bones in order to extend them.
Blaustein’s son had that procedure a few months ago, when he was 7. Both his legs were broken in three places, and 15 to 20 pins were inserted in each one. He was placed in traction and, four times a day for six weeks, the pins were rotated to break the bones. Length is gained through formation of scar tissue that transforms to bone at the break site.
Watching his son go through the treatment was devastating, Blaustein said. “It was so hard to see your child in pain all the time.”
His son added 3.5 inches to his legs. He can now run faster and do things like reach the sink to wash his hands, said Blaustein.
Still, the investor is anxiously waiting for the results of BioMarin’s first trials. If they go well, he wouldn’t hesitate to enroll his son in later-stage tests, he said.
BioMarin’s medicine would be taken as a daily injection, similar to the administration of insulin for diabetics. The goal would be to start treatment upon diagnosis, normally by a year of age, and continue until the end of puberty when the growth plates close, BioMarin’s Fuchs said.
“Our hope is that it will be profoundly effective,” if not a complete cure, the medical chief said. It could enable patients who take the drug throughout childhood to reach at least average height and also add inches to those who start treatment later in childhood yet before puberty ends, he said.
BioMarin fell 1.2 percent to $34.78 at the close in New York. The shares have gained 36 percent in the past 12 months.
Eighty percent of children with achondroplasia are born to parents without the disease. Their disorder is the result of a spontaneous gene mutation, said Wilcox, of Cedars-Sinai.
Questioning Drug Development
The prospect of a medicine that restores height to children with dwarfism is controversial. The advocacy group Little People of America encourages its members and society in general to accept rather than seek to alter dwarfism.
“We’re not about research, we’re not about medicine, we’re about support,” said Gary Arnold, president of LPA. “And frankly we don’t look at dwarfism as something that needs to be treated.”
Arnold, who is the only one in his family with achondroplasia, said a diverse culture has formed among people with dwarfism, which includes those of both genders and different races who live in disparate places. The association doesn’t have a formal position about BioMarin’s potential medicine, he said.
“We’re not going to make a decision for people about whether something’s right or wrong,” Arnold said.
The lack of medical options for kids born with achondroplasia has frustrated many parents, who, like Blaustein, have devoted time and resources to finding new treatments. Amer and Munira Haider started a nonprofit organization to fund medical research on the disorder after their second child, Ahmin, 3, was diagnosed with it in 2009.
“When we got in the community, we found it’s very robust and rich, but the amount of medical research and funding going toward medical research was not very strong,” Amer Haider said in a telephone interview.
A vice president of corporate and business development at Cavium Inc. (CAVM), a processor company in Silicon Valley, Haider and his wife have raised $450,000 to spend in the next three years from a group of 35 friends and family members, he said. Their organization, called Growing Stronger, will support the research of BioMarin adviser Wilcox and also William Horton, at Shriners Research Center in Portland, Oregon. Their goal is to partner with members of Little People of America to raise more funds and determine where to direct them.
Few existing options means a clear field for BioMarin. Priced similarly to other orphan drugs at $200,000 to $400,000 a year per patient, the medicine could yield revenue of $900 million annually for the company, said Chris Raymond, an analyst with Robert W. Baird & Co. He estimates there may be 4,500 patients in the U.S. and Europe who could benefit from BMN-111.
There’s no guarantee, of course, that the medicine will reach the market. Drug development is notoriously fickle, with more therapies failing than succeeding. Still, Blaustein said, he’s hopeful.
His son, after undergoing limb lengthening, wondered why he couldn’t get the kind of treatment received by his grandmother, who takes a daily shot of insulin with a “tiny needle” for her diabetes, Blaustein recalled.
“He asked me, ‘Is there any way I could get a shot every day?’” like his grandma, Blaustein said. With BioMarin’s drug on the horizon, he told his son, “Maybe, you know, maybe.”
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