Orphan Therapeutics Accelerator (OTXL)

What is the name of your organization?

Orphan Therapeutics Accelerator (OTXL)

What is the name of your solution?

Orphan Therapeutics Accelerator (OTXL)

Provide a one-line summary of your solution.

A non-profit biotech focused on efficiently advancing stalled clinical-stage treatments for ultra-rare conditions to enable patient access.

In what city, town, or region is your solution team headquartered?

In what country is your solution team headquartered?

• United States

In which countries do you currently operate?

• United States

What specific problem are you solving?

There are more than 10,000 rare diseases, affecting 400 million people worldwide. Most (85%+) of those conditions are “ultra-rare,” with fewer than 3,000 patients identified. More than half impact children. A third of those children will die by age 5. Less than 5% of rare conditions have an approved treatment.

The Orphan Drug Act of 1983 provided incentives that encouraged companies to pursue development of “orphan drugs” (i.e., rare disease treatments that weren’t commercially attractive to develop because of the small disease populations). Over the ensuing four decades nearly 3500 clinical programs were initiated for orphan drugs.

More recently, however, shifting market conditions, policy changes and the potential loss of key incentives have triggered a massive shift away from investment in rare and, especially, ultra-rare treatments. Hundreds of clinical trials for promising rare disease treatments have been shelved or abandoned.

Emerging biotechs with constricted funding have shelved multiple clinical-stage programs to focus on only the most lucrative drugs for higher prevalence conditions. Larger companies, even ones with a long legacy in rare disease, have jettisoned entire rare disease business units.

Academic medical centers that generated exciting early-stage data on treatments for ultra-rare conditions and out-licensed them to biotechs are now increasingly seeing those programs handed back to them, having been de-prioritized by industry partners.

The challenge facing ultra-rare disease communities isn’t scientific (many of these programs have extremely promising data from Phase 1-2 trials); it’s the business model. Our solution is designed to address the immediate needs of patients by advancing late-stage programs through to commercial availability, while demonstrating that there is a repeatable path and sustainable funding mechanism to do this at scale.

What is your solution?

Our mission is to demonstrate that there is an efficient, rapid, commercially viable and sustainable path forward for many of these promising treatments. Our aim is not only to get more than a dozen of these treatments to patients within 4-6 years, but also to reinvigorate investment in ultra-rare diseases by demonstrating we can still deliver a reasonable return to partners and investors from commercialization of ultra-orphan drugs.  

The Orphan Therapeutics Accelerator (OTXL) is a nonprofit biotech that will efficiently advance shelved ultra-rare assets to the market and retain generated revenue to advance similar additional assets.

We identify, vet and ‘adopt’ promising ‘orphaned’ therapeutic candidates for ultra-rare conditions and resume their development through marketing approval. Our focus is on substantially de-risked, clinical-stage assets with demonstrated safety and promising efficacy signals, with an emphasis on assets with the potential to generate Priority Review Vouchers (PRVs) in modalities with well-established regulatory paths.

There must be a reasonably clear pathway to filing a marketing application within 2-5 years that aligns with the capabilities of OTXL’s network partners and sufficient interest from qualified funders. Our asset vetting process combines internal expertise and in-kind due diligence contributions from qualified partners.

Due to OTXL’s nonprofit status, there are attractive tax incentives for intellectual property (IP) contributions by commercial biopharmaceutical companies, and our terms can be more modest and distributed across partners and investors.

OTXL brings together a network of contract development and manufacturing organizations (CDMOs) and other clinical development partners that are willing to provide services on deferred payment schedules, at risk, at cost, or in-kind. These creative agreements reduce the amount of cash required to reach revenue-generating milestones associated with marketing approval, such as PRV sales, out-licensing deals, and spinouts. OTXL partners are motivated by multiple factors, including humanitarian reasons, opportunities for positive public relations, utilization of excess capacity, tax considerations, and/or strategic positioning in modalities or disease categories.

OTXL secures funding from a unique cross-section of biomedical funders. Traditional providers of nondilutive funding include disease foundations, government, philanthropists, corporate giving and donor advised funds (DAFs). OTXL is developing a unique non-profit/for-profit hybrid structure that will allow for-profit spinout companies under the non-profit umbrella, enabling capital raises from investors, including social impact funds, venture philanthropy and venture capitalists. As assets draw closer to marketing approval, venture or impact capital investments becomes more viable due to the short timeline between investment and exit, and the beneficial impact of concentrated nondilutive and minimally dilutive funding from other sources. OTXL’s share of revenue-generating returns are wholly retained by the nonprofit, providing a regenerative source of funding for future development projects. The revenue returned to the Accelerator will initiate a “flywheel effect,” enabling the Accelerator to become a sustainable enterprise (i.e., not substantially reliant on grants or philanthropic funding) within 4-6 years. As a non-profit supported by a dedicated, regenerative fund, OTXL will center on patient need, insulated from investor and shareholder pressures to prioritize assets for development primarily based on anticipated return on investment (ROI) and net peak sales minimums.

Who does your solution serve, and in what ways will the solution impact their lives?

Rare diseases are often serious, debilitating and/or life-threatening. Fewer than 5% have FDA-approved treatments, and the percentage is even lower for ultra-rare conditions. More than 50% of rare disease patients are children, and 30% of those children will not see their 5th birthday.

Ultra-rare communities are disadvantaged in countless ways. The journey to diagnosis is steeper, experienced and evidence-based clinical management is rarer, and the number of change-makers within the community is smaller. Therapeutic development efforts from the private sector are scarce, inconsistent or entirely absent.  Nonetheless, an extraordinary number of these communities have built networks of affected patients, recruited researchers to study their disease, and funded R&D in pursuit of treatments and cures.

These communities have urgent needs. Each year that passes can be a death sentence or a last chance to meaningfully change the trajectory of a disease. Each milestone in the drug development process, from proof of concept to Investigational New Drug (IND) application, is hard-fought and desperately awaited.

For these communities, clinical trials represent unmatched hope. Pauses and delays represent unmatched frustration and gut-wrenching disappointment.

It is heartbreaking to imagine a family’s despair when they learn that the reason that they can’t enroll their child in the final stage of the clinical trial or get coverage for this opportunity through their insurance is because the therapy won’t be a blockbuster commercial success. The initial clinical trial supports the idea that the drug works, but the modest market for the drug means there is no path to patient access, except in the cases where lucky or wealthy patients are able to pay for an extension of the trial. 

Which dimension of the Challenge does your solution most closely address?

What is your solution’s stage of development?

Please share details about why you selected the stage above.

In the past year, OTXL has developed and refined our business model, built our founding team, incorporated as a nonprofit and publicly launched our organization with an external-facing website, speaking engagements and trade press coverage.

Developing our business model required months of researching and validating the needs, preferences and constraints across all relevant stakeholder-types. We modeled expenses and revenue across multiple scenarios to define the required attributes and funding requirements of our initial assets. In addition to the core team, which is described in a subsequent question, OTXL has united a world-class advisory board, representing centuries of elite executive experience in the fields of biopharmaceuticals and rare diseases.

Our current focus includes continued vetting and establishing agreed-upon terms for  assets to be included in our first cohort. While we are not able to name specific academic centers or biotechnology companies due to confidentiality agreements, we have identified several qualified assets with partners who are motivated to see these programs move forward under modest, flexible terms.

We are also focused on developing partnerships compatible with our model, including with CDMOs, prospective clinical sites, and other key service providers, and anticipate announcements of several key strategic partnerships in 2024.

Finally, we’re engaging interested major donors and funders to understand where the social impact of our model is of most interest, and/or which assets or combinations of assets will attract the types of non-dilutive and minimally dilutive funding required to rapidly advance OTXL’s initial portfolio and establish a regenerative funding flywheel for development of additional “orphaned” therapies.   

What makes your solution innovative?

OTXL is the first biotech company in the ultra-rare space to embrace a hybrid nonprofit/for-profit structure with a focus on late-stage clinical assets to create a regenerative funding mechanism. While elements of this model have been leveraged to great effect in a few cases in drug development before, this model has not been applied to rare disease therapies that are not advanced to marketing approval for economic reasons.

The hybrid model allows OTXL to leverage non-dilutive capital to provide the necessary runway to support the first 3-5 programs in the portfolio, get the first few assets to or through a Biologics License Application (BLA) filing, and validate the model (without worrying about excessive ROI from those initial therapies) as we go out to secure a second, larger tranche of impact investor and venture philanthropy capital for the next set of 7-10 programs.

As a non-profit, OTXL can access a wider pool of philanthropic funds and grants for initial programs, we are better positioned to negotiate discounts and other cash-deferred terms from CDMO and other partners and can offer tax benefits to corporations that for-profit firms cannot. Yet our model also recognizes, given the capital required to advance a therapy from Phase 2 to a BLA, that some investment capital will be needed. A corporate structure that includes a for-profit entity allows us to offer return on investment to social impact funds, venture philanthropy and traditional investors.   

OTXL’s focus on clinical-stage assets is also a differentiator. These assets are substantially de-risked, which improves access to funding considerably and enables more rapid arrival at revenue-generating events. Only in the recent past have clinical-stage assets with solid efficacy signals, which simply lacked committed commercial partners, begun to pile up.

Our model also provides an alternate path forward for programs that have been returned by industry partners to academic institutions. These programs, often initiated and funded by patient groups, have advanced into design, development and initial clinical trials in platform modalities like AAV gene therapy, only to be handed back to institutions after being de-prioritized by biotechs.

Our model gives many communities hope. Researchers and patient advocates are painfully aware that a growing number of very promising ultra-rare disease trials are stagnating after Phase 1/2. We provide a much-needed answer to the question at the top of mind of many affected by ultra-rare diseases: If this treatment works, but is for a small population, will there be a path for patients to get it?  OTXL envisions a future where we demonstrate for non-traditional developers that they can  conduct their drug development programs in a way that enables us to efficiently offer the therapy a path to the market. For example, we will be able to set up strategic partnerships with recommended vendors or distribute open-source CMC guidelines that will enable independent developers to develop their therapies so that handovers are minimally expensive and disruptive. We may also be able to develop an external pipeline that has many of benefits traditionally restricted to internal pipelines. 

Why are you applying to the Prize?

The Amgen Prize would provide OTXL funding to secure outside counsel to enable review and refinement of several critical components of our model.

Due to OTXL’s innovative corporate structure and hybrid governance plans, there is a growing need for specialized advice and bespoke language for OTXL’s bylaws and for contracts with the initial class of asset contributors, partners and funders. As agreements proceed past the memorandum of understanding (MOU) and term sheet phases, our need for legal advice will increase. This need is compounded by OTXL’s intentionally flexible approach to developing terms. Approaching each asset and its development program creatively enables us to find the best way forward, but there are increased legal expenses for approaching each asset individually when compared to a one-size-fits-all approach.

Charitable donations of intellectual property are tax-deductible and could be a substantial value add to our model. Tax opinion letters that speak specifically to foreseen circumstances related to valuation and accounting options for donations of intellectual property will be an important tool for securing donated assets and other types of intellectual property. 

Who is the Team Lead for your solution?

Craig Martin, Chief Executive Officer

How are you and your team well-positioned to deliver this solution?

The Accelerator is comprised of and advised by senior professionals with decades of C-level experience in biotech and non-profit management, finance, research, drug development, clinical practice, consulting, business development, advocacy, regulatory affairs and communications. Our team has substantial backgrounds in patient advocacy, clinical research, development and commercialization of gene therapies and other modalities relevant to the Accelerator’s prospective portfolio.

We have applied our skills in service of patient communities for many years:

• Chief Executive Officer Craig Martin is a former board member and CEO of Global Genes, a leading pan-rare disease patient advocacy organization, and longtime consultant to biotech companies advancing new treatments and modalities for rare diseases.
• Chief Business Officer Beth White is a former board member for Parent Project Muscular Dystrophy, a pioneer in patient-led research leadership, and has worked in rare disease development and commercialization for both global biopharmaceutical (Pfizer) and emerging companies.
• As an Entrepreneur-in-Residence for the Juvenile Diabetes Research Fund (JDRG) T1D Fund, Chief Innovation Officer Nandan Padukone led the development of the tech technology platform, clinical pipeline and corporate strategy of IM Therapeutics for the JDRF prior to its financing.
• Deanna Portero, VP of Partnerships and Innovation, has worked directly with patient communities in roles at the National Organization for Rare Disorders, as Executive Director of the FD/MAS Alliance and through coordination of major gene therapy and genome editing programs at National Institutes of Health.
• OTXL’s board also includes patient advocate leadership.

We are deeply familiar with the challenges faced in discovering, developing and commercializing treatments for rare conditions. We’ve shared the frustration of seeing promising therapies advance into trials only to be abandoned in the face of financial pressures. We are on boards, lead companies and/or are otherwise directly connected to programs that have been halted. We are committed to changing the model and demonstrating there is a better way forward.

This solution was designed in direct response to demonstrable need across many ultra-rare communities. We know how challenging it has been for them to negotiate deals that they later learn don’t include claw-back provisions when an industry partner halts development of a program. We’ve heard directly from community leaders, including leaders that had already received one-time treatments for their children, that they wanted a sustainable access solution for their entire community. 

What type of organization is your solution team?

Hybrid of for-profit and nonprofit