Profitable Drug Development through Smart Regulatory Strategy:
Doing Well by Doing Good
Robert Michalik, JD, RAC
RegulatoryPro Consulting
17 November 2017
Filling an Unmet Medical Need while Profiting from the Treatment of a Rare Disease
For some time now, Congress and Food & Drug Administration (FDA)
have championed initiatives designed to bring novel therapies for
unmet medical needs to market, and particularly those caused by
rare genetic defects. The pharmaceutical industry is responding.
The most recent example of this public-private collaboration came
on November 15, 2017 with the approval of Ultragenyx
Pharmaceutical’s new drug, Mepsevii™ (vestronidase alfa-vjbk).i
Through a well planned and executed regulatory strategy, Ultragenyx, with a $2 bn market cap,
succeeded in garnering strong praise from FDA and patient advocacy groupsii as well as investors. The
company is now poised to leverage this success to further develop other products in their pipeline.
Doing Good – Treatment for Sly Syndrome
Mepsevii™, enzyme replacement therapy, is indicated for the treatment of patients with an inherited
metabolic condition called mucopolysaccharidosis type VII (MPS VII), also known as Sly Syndromeiii. MPS
VII is a lysosomal storage disorder caused by deficiency of an enzyme called beta-glucuronidase. Phase
III clinical study results (NCT02230566) demostrated modest but significant improvements in stamina
and mobility for patients evaluated relative to a placebo group.iv The approval of Mepsevii™ is, of
course, wonderful news for the very small patient population who are afflicted with this disease (N <
150 patients worldwide). It provides not only a new treatment but also hope for largely neglected
subpopulation suffering from the sequelae associate with this genetic defect.
Ultragenyx Pharmaceutical - New drug approval Mepsevii™ - Doing Well by Doing Good
Keys to Financial Success is their Regulatory Strategy
Mepsevii’s approval is the culmination of Ultragenyx’s smart regulatory strategy for bringing this novel
breakthrough product to market in a financially feasible manner. It also provides tangible evidence that
the FDA remains truly committed to endorsing novel treatment for rare diseases, even when the clinical
efficacy appears modest (albeit with a remarkable decline in urinary glycosaminoglycan concentrations,
a surrogate marker for efficacy). In FDA’s November 15th press release, Julie Beitz, M.D., FDA’s Director
of the Office of Drug Evaluation III in the Center for Drug Evaluation & Research stated that the approval
of Mepsevii “underscores the agency’s commitment to making treatments available to patients with
rare diseases”. A new drug approval alone is impressive, and a positive press release from FDA is
arguably better.
Doing Well – Financial Carrots are better than Compliance Sticks
The range of development and regulatory incentives offered by FDA to Mepsevii™ manufacturer,
Ultragenyx Pharmaceutical to move this product through the pipeline is noteworthy. Not surprisingly,
FDA granted Fast Track designation to the Mepsevii application since the drug is intended to treat
serious conditions to address an unmet medical need. And, due to low incidence of Sly syndrome, the
product also received Orphan Drug designation which qualifies Ultragenyx to receiver various
development incentives, including tax credits for qualified clinical testing, and exemption from paying
the prescription drug user fee which is significant for a drug developer. Particularly attractive is the
granting of a Rare Pediatric Disease Priority Review Voucher, a fungible asset that can be redeemed by a
sponsor(or sold) at a later date to receive Priority Review of a subsequent marketing application for a
different product. See Table 2 for overview of incentive in FDA’s Expedited Program
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Ultragenyx Pharmaceutical - New drug approval Mepsevii™ - Doing Well by Doing Good
From: Sherman, R. M.D., M.P.H., et al., Expediting Drug Development — The FDA’s New “Breakthrough Therapy”
Designation; N. Engl. J. Med, 369;20 (14Nov2013) http://www.nejm.org/doi/pdf/10.1056/NEJMp1311439
Combined, the FDA incentives awarded a drug developer that brings a treatment for a rare disease to
market are quite attractive, but none perhaps more so that the Priority Review Voucher (PRV) signed
into law under section 908 of the FDA Safety and Innovation Act.
To be eligible for a pediatric PRV, the drug or biological product must be novel and be indicated
specifically for treatment of a rare disease in children. Of course, once marketing approval is granted,
the company is free to further explore the new drug’s efficacy in other populations thereby expanding it
commercial value via a supplemental NDA. In this way, the FDA truly becomes a partner in a
coordinated longer-term commercialization strategy that benefits both children and the company itself.
Because the PRV is transferrable to another company without restriction, it has a market value which is
staggering based upon sales reported to date.v It’s a wonderful example of how a well-executed
regulatory strategy can synergistically meet the needs of both the public and investors at the same time.
Another Regulatory Incentive to Consider
A third regulatory carrot that Ultragenyx should consider is a
Patent for Humanity voucher as recognition for its laudable
effort and success in addressing a small but vital humanitarian
challenge, treatment for Sly Syndrome. Established by the U.S.
Patent and Trademark Office, the Patents for Humanity program is an awards competition that
“recognizes innovators who use game-changing technology to meet global humanitarian
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Ultragenyx Pharmaceutical - New drug approval Mepsevii™ - Doing Well by Doing Good
challenges. The program provides business incentives for reaching those in need: winners receive an
acceleration certificate to expedite select proceedings at the USPTO, as well as public recognition of
their work.”vi More specifically, if selected, a developer may receive a patent examination and review
voucher with which they could move a patent re-examination proceeding, a patent appeal case to the
front of the queue; or accelerate the examination of a patent with the goal of a final decision on the
application within twelve months. Though the likelihoood of receiving a PFH award is not known,
uncertainly shouldn’t deter Ultragenyx from applying as it costs nothing to do so and the benefits to the
company, both from a financial and public relations perspective, are incalculable.
Let’s hope that FDA and the USPTO do not remove such regulatory incentives as more smart companies
begin to realize their value. Doing well by doing good - a win-win scenario for both the company and
public.
Endnotes
i
FDA Press Release, FDA approves treatment for rare genetic enzyme disorder, MarketWatch News – Press
Release, 15Nov2017. Accessed 17 Nov 2017 at https://www.marketwatch.com/story/fda-approvestreatment-for-rare-genetic-enzyme-disorder-2017-11-15
ii
Shanley, M., FDA Approves MPS VII Treatment, Rare Disease Report, 15Nov2017; accessed 17Nov2017
http://www.raredr.com/news/fda-approves-mepsevii?t=physicians
iii
Rare Diseases – Sly Syndrome, https://rarediseases.org/rare-diseases/sly-syndrome/
iv
Black, A., Phase 3 Study of UX003 in Sly Syndrome Patients Shows Promising Results, Rare Disease Report,
12Feb2017 accessed 16 Nov 2017 at http://www.raredr.com/conferences/worldsymposium/phase-3-studyof-ux003
v
Ridley, D. et. al., Fuqua Research in Action: Priority Review Vouchers, Duke Univ.
https://faculty.fuqua.duke.edu/~dbr1/voucher/#pediatric
vi
US Patent & Trademark Office, Patents/Initiatives/Patents for Humanity Program, accessed 16 Nov 2017
https://www.uspto.gov/patent/initiatives/patents-humanity/learn-more
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