I agree insofar as this is probably not a short term priority for Incannex, but as a longer term strategy, there is a lot of merit to it.
Rare diseases are characterised by a couple of attractive traits for drug development:
- Lack of competition
- US FDA incentives
Many of these are spelled out on the following page:
https://www.fda.gov/patients/rare-diseases-fdaBecause the definition of a rare disease in the USA is one where less than 200,000 people suffer from it nationally, diseases that lie just beneath that threshold could be of particular interest. Incannex has shown a proclivity for aiming at indications without any existing therapeutics, and when they run out of more common indications to target, a close look at the financial viability of orphan drug development makes sense.
200,000 patients in the USA might translate into close to 1M in the developed world. Rapidly capture 25% of that market because your drug is the only game in town, and considering a conservative $500/year profit per patient, you're already looking at up to 125M/year within the first few years, with market share growing year on year. Such a drug would easily alone account for multiples of our current market cap, and over the course of a decade or two, if you collect a few of these, alongside your larger market drugs, you have yourself a lucrative, low-competition stream of incomes that provide diversification to the IP and revenue portfolios.
Finding trial participants is more challenging, yes. But feasible. Each US state would have an average, all else being equal, of 4000 sufferers of a disease that afflicts 200,000 nationwide. In larger states, the number would be much higher and many of these would be concentrated in urban centre with high population densities. New York, LA and Chicago have a total population approaching 15M - closing in on 5% of the nation's population, so you can expect to find in the vicinity of 10,000 rare disease sufferers across those three cities, out of a total of 200,000. With the advances in telemedicine and IOT compliance monitoring devices, the opportunities for remote trial pipelines will be multiplying, making geography less of an issue.
Add all this up, and it seems like a great sector for Incannex to be eyeing for the long term. If they have their heads in this space, it becomes yet another reason to be impressed with this company's leadership.
All this is conjecture of course, but I doubt Dr Sud would be giving a talk on this, while the topic is left unexplored by the company.