SUZHOU, China – The rare disease space continues to be an area of focus across the sector worldwide, and China is no exception, with regulators rolling out long-awaited incentives and drugmakers viewing the field as a promising area to drive growth.

"Today, the world's most groundbreaking and dynamic field that can create the greatest benefits to our society and economic and technological development is rare diseases and innovative drugs," said James Xue, CEO of orphan drugmaker Canbridge Pharmaceuticals Inc., at the China Biotech Innovation and Investment Conference.

"In this field, all advanced technologies are applied for translational medicine. It is the field that is most likely to see success and breakthrough," he added.

Xue explained that around 80% of the diseases are related to single-gene mutations and the cause is very clear. If drugmakers can target the cause directly, the success rates can be very high.

Indeed, many biotech companies are eyeing the rare disease space and projects have yielded success.

"Over 50 percent of these new drug approvals [by the FDA] are related to rare diseases. The priority review for orphan drugs is one explanation to this," Travis Hu, senior director, head of life sciences of greater China at Clarivate Analytics.

The rare disease space also sees robust M&A activity. Data from J.P. Morgan showed that the segment ranks second in terms of the number of deals worth more than $1 billion and the total transaction value of deals, behind oncology.

Orphan drugs will remain a focus in global drug R&D, Hu said. More companies will be encouraged to develop them due to the lack of effective treatments, which in turn gives rise to favorable policies.

The FDA, which serves as a global benchmark, has long had the orphan drug designation program to create financial incentives for drugmakers to develop new drugs for rare diseases. Those include a partial tax credit for clinical trial expenditures, waived user fees, and eligibility for up to seven years of marketing exclusivity.

Far later than the U.S., China has finally mentioned rare diseases in its recently revised drug administration law this year; it published the first national list of rare diseases, which includes 121 indications, in May 2018.

The list defines albinism, amyotrophic lateral sclerosis, Gaucher disease, Kallmann syndrome, Marfan syndrome, Fabry disease, hemophilia and many more as rare diseases. Prior to that list, the country relied on industry consensus to decide what counted as rare – a disease with a prevalence of fewer than one in 500,000 people, or a neonatal morbidity of less than one in 10,000.

With an official definition now available, regulators have rolled out favorable policies for rare disease drugs and put them into law.

"Drugs for rare and pediatric diseases can be granted priority review or even exemption from clinical trials when seeking marketing clearance," Xie Songmei, deputy director of office of clinical evaluation II of China's Drug Evaluation Centre, said of the revised drug law.

Due to the low incidence rate of rare diseases, drugmakers can ask to submit less patient data for NDA applications or even use overseas clinical data to skip trials in China if there is no evidence of racial disparity in the data.

Previously, imported orphan drugs had to go through clinical trials again in China, which meant drugmakers had to file for an IND, and, assuming the data proved favorable, another application for marketing, Xie explained.

"We are now simplifying the review process for orphan drugs," she added. "Drugmakers can file for an NDA directly if they can prove there are no racial differences."

The NMPA also identified much-needed new orphan drugs marketed outside China. That has resulted in an expedited review last year for Sanofi SA's Aubagio (teriflunomide) for treating patients with relapsing multiple sclerosis.

Untapped opportunity

China needs more orphan drugs. There are fewer than 10 approved drugs to treat rare diseases, while the country takes up 20% of new genetic disease cases globally.

Canbridge's chief financial officer, Glenn Hassan, said the market potential for rare disease drugs in China is estimated to be 35% to 40% of the U.S. market with a value of $15.5 billion.

"It's a large and untapped opportunity," he said. In China, 1,423 rare diseases are identified. Its population is four times the size of the U.S., but only 20% of the people have access to proper diagnosis and treatment.

The world also identifies 30 new rare diseases every year due to advances in precision medicine and genomics.

Now that regulators have handed out the invitations, Chinese drugmakers are eager to jump on board.

"2018 was a breakthrough year in China for the acceleration and advancement of addressing treatment for rare diseases. 2019 is shaping up to be the implementation year," said Hassan.

Canbridge is a major player in the space. Calling itself the "first real innovative rare disease company in China," it has six assets that aim to tackle rare diseases. Among those are CAN-101, an enzyme replacement therapy for treating mucopolysaccharidosis II. The drugmaker expects an NDA approval in China in the first half of 2020.

It also has CAN-106, a monoclonal antibody for complement-mediated diseases, and CAN-103, another enzyme replacement therapy, aimed at treating Gaucher disease. They could be IND-ready in the first half of next year.

Also in Canbridge's rare disease portfolio are CAN-104, CAN-105 and CAN-107, which are in preclinical studies.

Other Chinese biotechs that contribute efforts include AI-driven diagnosis firm Wuxi Nextcode, drugmaker Cstone Pharmaceuticals Co. Ltd. and rare blood disease specialist Shanghai Syndegen Biotech Co.

All are looking to regulators to help bolster the space.

"The biggest challenge faced by Chinese drugmakers that develop orphan drugs is the constraint due to policy. China has only identified 121 rare diseases, when there are over 7,000 in the world," Vivian Li, associate vice president of Cstone, told BioWorld.

"Can the government come up with a policy that points to the sustainable development of the rare disease space, so as to encourage more investors to take risks in developing rare disease drugs and guaranteeing a reasonable return for them?" asked Canbridge's Xue.

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