Orphan drugs have drawn a complex cast of players in the rare-disease therapeutics space. From fired-up parents and advocates, to new companies and business models, all of the stakeholders seem to have vital roles in filling the empty niches of medical need. Cydan created its own new model to answer the business challenge of developing new orphan drugs. Serving as a central hub, the development accelerator finds, selects, and acquires therapeutic candidates, then forms, virtually operates, and ultimately spins off or sells companies, or “New- Cos,” focused on specific products or product groups.
It has recently closed a new financing for “Cydan II” with $34 million in new capital for de-risking and business development. The experiment was successful enough to produce a $200-million sale of Cydan’s first new company, Vtesse, to Sucampo, as well as clinical-development progress of its second company, Imara. Though superficially similar to multi-spinoff organizations such as Velocity, which we examined previously (June 2015), Cydan presents a new and original business model for orphan-drug innovation.