Big Pharma Targets Rare Disease Market Amid Patent Expirations

Global competition for investments in rare disease treatments is intensifying. As major blockbuster drugs approach patent expiration, big pharmaceutical companies are seeking new growth opportunities by exploring external pipelines. The rare disease sector, characterized by a small patient population but significant unmet demand, has emerged as a promising alternative.

According to industry reports, the global market for rare disease treatments is projected to reach $187 billion by 2024. In South Korea, improvements in regulations and expanded collaborative development are expected to invigorate the market further.

While the overall patient population for rare disease treatments may be small, the clear diagnostic criteria and distinct patient groups allow for efficient clinical trial designs. Additionally, the limited availability of alternative treatments makes pricing strategies easier to establish. For global pharmaceutical companies facing revenue gaps due to patent expirations, the rare disease sector offers a dual opportunity for profitability and differentiation.

Global transactions are also on the rise. Biogen recently acquired Apellis Pharmaceuticals for approximately $5.6 billion to enhance its rare disease portfolio. Apellis holds treatments for rare kidney diseases, including 'Empaveli,' and a therapy for geographic atrophy, 'Syfovre.'

Vertex Pharmaceuticals has also invested around $10 billion to acquire Crinetics Pharmaceuticals, a company specializing in rare endocrine diseases. This acquisition provides Vertex with access to 'Palsofia,' an FDA-approved oral treatment for acromegaly, and a candidate for congenital adrenal hyperplasia, 'Atumelanant.'

The domestic rare drug market in South Korea is still in its early stages and heavily reliant on imports. According to the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, the domestic production of rare drugs is estimated at 263 billion won, while imports amount to about 405 billion won as of 2024.

As a result, companies are opting for strategies that involve role-sharing and collaborative development rather than large-scale mergers and acquisitions. Given the market's relatively small size, it is more effective for companies with strengths in different stages of development to collaborate, enhancing the likelihood of commercialization.

Government policies are also supporting market expansion. Earlier this year, a joint government announcement outlined measures to strengthen support for rare and severe intractable diseases, reducing the time for drug registration from 330 days to 150 days. This expedited registration process is expected to increase investment and development incentives in the rare disease sector.

Domestic companies are achieving notable development milestones. Yuhan Corporation's candidate treatment for Gaucher disease, 'Y35995H,' has received rare disease designation from both the U.S. FDA and the European Medicines Agency (EMA). GC Pharma and bio-venture Nobel Pharma are jointly developing 'GC1130A,' a treatment for Type A Sanfilippo syndrome, which has secured rare disease designations from the FDA and EMA. Additionally, GC Pharma and Hanmi Pharmaceutical are collaborating on a Fabry disease treatment, 'LA-GLA,' which has also received FDA rare disease designation.

The Pharmaceutical and Bio-Pharma Manufacturers Association stated, "As interest in rare drugs continues to grow within the pharmaceutical and bio sectors, related pipelines are steadily increasing. With the rising proportion of biopharmaceuticals, companies are actively engaging in development, leading to the accumulation of innovative research and development capabilities in South Korea." They further emphasized the need for comprehensive and systematic support, including regulatory improvements, financial assistance, and enhanced clinical infrastructure, to ensure that domestic companies can translate their development capabilities into actual products and market entry.