The potential investment impact of improved access to accelerated approval on the development of treatments for low prevalence rare diseases

Table 3 Cost to approval and NPV calculations and analysis for all three clinical development programs.

	Cost to approval			% Decrease in cost to approval		Net present value
Disease	Clinical (all values in millions)	Two-study surrogate	One-study surrogate	From clinical to two-study surrogate	From clinical to one-study surrogate	Clinical	Two-study surrogate	One-study surrogate	Difference between clinical and one-study surrogate
α-Mannosidosis	76	42	28	45%	63%	(29)	(14)	(5)	24
Aspartylglucosaminuria	70	32	23	54%	67%	(0)	17	28	28
Galactosialidosis	76	42	28	45%	63%	(41)	(27)	(19)	22
MPS IVA	85	53	34	37%	60%	188	201	248	59
MPS VII	68	32	23	52%	66%	(24)	(8)	(1)	23
GM1 Gangliosidosis	80	32	23	59%	71%	(16)	9	19	34
LINCL	49	42	28	14%	42%	8	14	28	20
MLD	119	39	28	68%	76%	213	289	342	129
MPS IIIA	119	39	28	68%	76%	19	66	86	67
Niemann-Pick B	56	50	34	10%	39%	39	39	58	19
LAL Deficiency	77	50	34	35%	56%	(35)	(23)	(13)	23
Primary Hyperoxaluria	284	42	28	85%	90%	68	242	290	223
RDEB	105	49	34	54%	68%	(14)	18	33	46
X-Linked HED	57	35	27	39%	53%	(15)	(3)	4	19
CDG-Ib	28	21	17	23%	38%	(21)	(19)	(17)	4
AVERAGE	90	40	28	46%	62%	23	53	72	49

These estimates are for comparison between clinical and surrogate based programs using the NPV spreadsheet in reference 40. The specific value for any program can be substantially different with different assumptions, however for a comparison, these values were considered reasonable based on author experience. In this paper, cost to approval represents total cash invested in a development program after a drug is identified and until the pivotal approval event occurs, when revenue begins. Net present value (NPV) represents a measure of investment return in which the cost of invested capital over time is balanced against the benefit of future revenue, while adjusting for the time value of money. No adjustment for risk of failure was used to avoid having another independent variable complicating interpretation. We chose a standard overhead cost of $2 M/year. We then put in place a 4-year ramp to maximal revenue at 80% of maximum market size. We chose seven years of orphan drug exclusivity, after which we assumed the introduction of a generic that eliminates all further revenue.

ISSN: 1750-1172