About 1.3 million Americans and 4.9 million globally are today affected by rheumatoid arthritis or RA, a painful, incurable disorder that costs the U.S. $128 billion economically. Its considerable impact merits more sustained investments and funding.
Unlike the wear and tear damage of osteoarthritis, RA occurs when your immune system mistakenly attacks your own body’s tissues. It affects the lining of your joints, which makes them swell, cause pain, erode bones and cause deformit. In the U.S., RA is three times more likely to occur in women than in men, and left untreated can also damage a wide variety of the body’s systems, including the skin, eyes, lungs, heart and blood vessels.
Why it Matters – RA’s Considerable Burden
Rheumatoid Arthritis is costly. Because RA is typically progressive, its symptoms worsen over time and often begins during the middle years of life. The disease often impairs many patients for as long as 30 years, which translates to considerable social and economic costs.
In the U.S., medical care, lost wages and productivity loss due to RA comprise the nation’s $128 billion costs annually, according to the Arthritis Foundation, a non-profit arthritis advocacy group based in Atlanta, Georgia.
Without treatment, 90% of RA patients stop working before retirement, and 10% stop working within a year of being diagnosed. One in three arthritis patients experience impairments at work, if they do manage to stay engaged in the nation’s labor force.
As far as its healthcare burden, the American College of Rheumatology estimates that 250,000 hospital admissions and 9 million doctor visits annually in the U.S. are due to RA. The average annual cost of RA is $8,500 per RA patient in the U.S., excluding pharmaceutical costs; 50% of all health costs for RA are related to hospital admissions.
RA patients who become disabled have higher costs, both to the economy and healthcare system. In one study by the American College of Rheumatology, disabled RA patients can cost more than three times the cost of health care compared to patients who are not. This is not insignificant, and irregardless of a planned repeal by the current administration of parts of the nation’s Affordable Care Act.
Market Size
With its considerable impact to society and the economy, RA’s drug market reach is also as big, with growth anticipated to nearly $19 billion by 2020 according to GBI Research. Large biotech players are involved: the so-called top “Big Three,” Humira, Enbrel, and Remicade, made by Abbvie, Amgen, and Johnson & Johnson respectively, represent about 67% of drug sales.
Biosimilars, a biologic medical product that is almost an identical copy of an original product but is manufactured by a different company, represent the next segment of RA drug providers that is fast growing. Market reach is projected to $5.4 billion by 2020, according to BCC Research. By 2018, a biosimilar of each of the Big Three in the US is expected to come to market. Companies that stand to gain from this trend include Pfizer, Novartis, Amgen, and Merck.
Impact Ventures
Venture capital funds like Boston Scientific, Action Potential VC in the US and Oriza Seed Venture Capital, Boyu Capital, and WuXi Healthcare Ventures in China recognize these trends and are underwriting deals so solutions to Rheumatoid Arthritis may grow to become a key destination for impact investors.
Five noteworthy ventures being invested in:
SetPoint Medical – makes proprietary implantable neuromodulation devices to supplement the body’s “Inflammatory Reflex” —the natural mechanism by which the central nervous system regulates the immune system. $78.6 million from 8 investors with the most recent syndicate funding just in March 2017. SetPoint’s proprietary bioelectronic platform consists of an implantable microregulator, wireless charger and an iPad prescription app. Based in Valencia, California.
KaloBios – biopharmaceutical focused on developing first-in-class human antibody therapeutics, targeting not only RA, but other rare diseases like cystic fibrosis. KaloBios had a rocky recent history, including the arrest of former CEO Martin Shkreli, bankruptcy, and a Phase 2 clinical trial failure for its drug candidate to treat cystic fibrosis. $93 million in 6 rounds from 10 investors. Based in South San Francisco, California.
CStone Pharmaceuticals – another biopharmaceutical focused on rheumatoid arthritis and four additional therapeutic areas – oncology, cardiovascular diseases, hematology and autoimmune diseases. $150 million from 3 investors. Based in Shanghai, China.
Axikin – a biopharmaceutical company focused on the development of small molecule therapeutics, or drugs that are made in chemical reactors rather than in cells or living tissues, for inflammatory disorders like RA as well as other respiratory and auto-immune diseases. $18.5 million in 5 rounds from 2 investors. Based in San Diego, California.
Qu Biologics – is developing a platform of new immunotherapeutic treatments, one of which is called the Site Specific Immunomodulators or SSIs (see video below) that are designed to reverse the chronic inflammation underlying cancer and immune-related diseases, such as Crohn’s or rheumatoid arthritis. $10.58 million in 3 rounds. Based in Vancouver, Canada.
Cheaper Drugs?
An easier regulatory environment in the new administration, some say, will create an opportunity for the industry to accelerate the process of new drug approvals by focusing on clinical trials.
These trials, however, are complex, costly and in many cases inefficient – the process and workflow of randomized clinical trials haven’t really changed since the 1990s.
Trump’s push for fewer regulations and more consumer choices ought to incent better ways to usher in more modern clinical trial processes.
Sources: Crunchbase, Seeking Alpha, Arthritis Foundation, RheumatoidArthritis.net, GBI Research, BioSimilar Development
