On Friday, the Food and Drug Administration approved a pill called Orenitram, to treat pulmonary arterial hypertension. It is an oral version of an injected drug called Remodulin, which treats the same disease. According to Mark Schoenebaum at ISI Group, the approval is “an enormous surprise — arguably, one of the top 10 biggest upside surprises in the history of the biotech sector.”
Why? Well, for one thing, Orenitram’s benefit isn’t that compelling. The FDA-approved labeling for the product characterizes the treatment effect as “small.” And the FDA had already rejected it twice, in March and October 2012. It seemed nearly impossible that the medicine would be approved without additional data. Yet that’s exactly what has happened.
This is obviously a win for United Therapeutics, the drugs maker, and for Martine Rothblatt, the company’s chief executive and founder. It’s not clear how big a drug this will be. It could cannibalize sales from United’s other drugs, Remodulin and an inhaled version of Remodulin called Tyvaso. Those betting against the stock are likely to hope that this is its peak, Schoenebaum writes, and that sales will disappoint. The biggest threat against them is an experimental drug from rival Actelion whose clinical trials will read out later this year. Schoenebaum expects the drug to be priced at $150,000 per year, similar to Tyvaso, and says that every $100 million in sales will amount to about a dollar of earnings per share — about a 10% increase.
In 1990, 6-year-old Jenesis Rothblatt’s lips turned blue. The little girl gasped for breath, could not climb stairs and was soon in the intensive care unit of Children’s National Hospital in Washington, D.C.
The disaster began a transformation for Jeni’s father–and a change in the way drugs for rare diseases are developed. Martin Rothblatt, a lawyer and businessman, turned his childhood passion for outer space into founding a series of companies that made him millions of dollars. First came GeoStar, a GPS-based navigation system, in 1986, then an early satellite radio company called Worldspace and finally Sirius Satellite Radio in 1990. In 1994 he underwent gender reassignment surgery and changed his name to Martine. Now a she, 55, Martine remains married to Jeni’s mom.
When Jeni became sick, Martine felt useless. “I was an expert in satellites, and I didn’t know anything about medicine,” she says. Jeni had pulmonary arterial hypertension (PAH), a rare and fatal disease that is caused when the artery between the heart and lungs is damaged. With 200,000 cases worldwide, PAH was too uncommon to win drug-development money. Martine Rothblatt sold her telecom stock and started a $3 million foundation to fund research, but three years went by without any progress.
In the end, this story led to a successful biotechnology company, and an entrant in the new world of drugs with six-figure price tags. It’s just one of those stories nobody could ever make up — at least, not if they expected to be believed.