Financing drug discovery for orphan diseases

Drug Discov Today. 2014 May;19(5):533-8. doi: 10.1016/j.drudis.2013.11.009. Epub 2013 Nov 20.


Recently proposed 'megafund' financing methods for funding translational medicine and drug development require billions of dollars in capital per megafund to de-risk the drug discovery process enough to issue long-term bonds. Here, we demonstrate that the same financing methods can be applied to orphan drug development but, because of the unique nature of orphan diseases and therapeutics (lower development costs, faster FDA approval times, lower failure rates and lower correlation of failures among disease targets) the amount of capital needed to de-risk such portfolios is much lower in this field. Numerical simulations suggest that an orphan disease megafund of only US$575 million can yield double-digit expected rates of return with only 10-20 projects in the portfolio.

Publication types

  • Review

MeSH terms

  • Animals
  • Capital Financing / economics*
  • Capital Financing / methods
  • Clinical Trials as Topic / economics
  • Clinical Trials as Topic / methods
  • Drug Discovery / economics*
  • Drug Discovery / methods
  • Fund Raising / economics*
  • Fund Raising / methods
  • Humans
  • Orphan Drug Production / economics*
  • Rare Diseases / drug therapy
  • Rare Diseases / economics*