Regulator and Funder? FDA’s Orphan Products Grants Program awards significant funding to help move promising treatments through clinical development

The U.S. Food and Drug Administration (FDA) plays a pivotal role in fostering the development of treatments for rare diseases through its Orphan Products Grants Program.  Each year, FDA selects a limited number of clinical trials to fund to help sponsors pursue development of medical products for rare diseases and advance their field.  In October, FDA announced seven new clinical trial grants awarded in fiscal year (FY) 2024 – including one for a Phase 3 trial – totaling $17.2 million over the next four years.  FDA also funds natural history studies under the grants program.  The Agency announced the FY2024 funding for the three natural history study grant awardees provides $4.7 million over four years.

While the various expedited programs for serious conditions (Fast Track Designation, Breakthrough Therapy Designation, Accelerated Approval, and Priority Review Designation) are in many cases well understood by companies and academic sponsors developing therapies for rare diseases, the Orphan Products Grants Program represents a lesser known but highly impactful program that importantly can serve to support advancement of novel therapies for rare disease patient populations. This post will highlight the interesting and impactful features of the Orphan Products Grants Program, both financial and non-financial, that we believe could be highly relevant to many audiences within the rare disease ecosystem, including companies with ambitions to develop novel therapies for rare diseases and to investors in rare disease drug development seeking to better understand the Orphan Products Grants Program criteria and potential regulatory insight to be derived related to companies that are awarded these grants.

Background on the Grants Program

Launched as part of the Orphan Drug Act of 1983, this program aims to encourage research and development of drugs, biologics, medical devices, and medical foods for rare diseases, defined as conditions that affect fewer than 200,000 people in the U.S.  While treating rare diseases presents significant challenges due to small patient populations and limited financial incentives, the Orphan Products Grants Program provides crucial financial support to help bridge the gap between early research and successful treatment development. Remarkably, since inception, the FDA Orphan Products Grants Program has funded clinical trials that have facilitated the approval of more than 85 products. This program is administered by the FDA Office of Orphan Products Development (OOPD) within the Office of the Commissioner.

As previously mentioned, the Orphan Products Grants Program includes two key funding opportunities: the Clinical Trials Grants Program and the Natural History Studies Grants Program.  The Clinical Trials Grants Program provides funding for clinical trials that evaluate the safety and efficacy of potential treatments for rare diseases to help move promising treatments through clinical development.  The Natural History Studies Grants Program funds natural history studies that collect gather data on how rare diseases progress over time without treatment.  These studies are crucial because understanding the natural course of a disease helps in designing better clinical trials and defining meaningful endpoints for future drug development.  The rest of this blog will focus on the Clinical Trials Grants Program.

The FDA’s Orphan Products Clinical Trials Grants Program is open to academic institutions, industry sponsors, non-profit organizations, and public or private entities, both within and outside the U.S. who intend to evaluate a drug, biologic, medical device, or food for medical purposes that targets a rare disease in a clinical trial.  Specifically, the clinical trial must aim to obtain data on the safety and/or efficacy of a product for diagnosing or treating a rare disease and, importantly, both randomized controlled trials and other designs, such as single-arm or open-label studies, may qualify, regardless of whether the study is early-stage (Phase 1) or later-stage (Phase 2 and 3).

Applications for Orphan Products Clinical Trials Grants are subject to a rigorous review process and the FDA uses a peer-review system to evaluate grant applications, considering several criteria:

(1) rationale;

(2) study design;

(3) inclusion of patient input;

(4) investigator(s), infrastructure and financial resources; and

(5) ability to advance the current field.

Generally, consultation with the relevant FDA review division occurs during the review process to determine whether the proposed study will provide acceptable data that could contribute to product approval.  A score is assigned to each application based on the scientific/technical review criteria.

The FDA offers substantial financial support for qualified projects, depending on the stage of the trial: Phase 1 clinical trials can receive up to $250,000 per year and Phase 2 and 3 clinical trials can receive up to $500,000 per year.  The duration of funding is typically up to four years, with some trials eligible for extensions under certain circumstances.  For many sponsors in the rare disease space, applying to the Clinical Trials Grants Program could be incredibly helpful because it provides an opportunity not only for direct funding for a clinical trial (which are notoriously expensive endeavors), but the review process generally involves OOPD consulting with the relevant FDA review division.  We would not expect clinical trials to be funded if there was not a meaningful degree of alignment between the FDA review division on the trial design, particularly for later stage trials.  Receiving a Clinical Trials Grant provides insight that the FDA review team likely considered the proposed study as being capable of providing acceptable data that could contribute to product approval.

FY2024 Awardees & Observations

For the FY2024 Orphan Products Clinical Trials Grants Program, FDA received 51 grant applications and awarded only seven new clinical trials a grant, providing more than $17.2 million to clinical researchers over the next four years to advance the development of medical products for rare diseases.  The seven awardees included six early-stage trials (e.g., Phase 1, Phase 1/2, and Phase 2) across rare cancers (n=3) and hematology (n=1), endocrinology (n=1) and ocular (n=1) diseases, and one Phase 3 trial for a rare skin disease.  Interestingly, based on a review of the 709 Orphan Products Clinical Trials Grants awarded since 1983 that are listed in FDA’s public database, as of October 1, 2024, only 48 Phase 3 trials have been granted an award (eight of which were Phase 2/3 trials). These have included clinical trials for rare diseases across metabolic (n=5), oncology (n=5), cardiology (n=3), dermatology (n=3), pulmonary (n=3), hematology (n=2), hepatology (n=2), ocular (n=2), transplant (n=1), gastrointestinal (n=1), immunology (n=1), infectious (n=1), neurology (n=1), orthopedic (n=1), and toxicology (n=1) indications.

Of note, FDA states that this year’s grants include “additional funding to support innovative and efficient trial designs that can be used to advance treatments through product development and as models for future drug development in rare diseases.” We note that the only Phase 3 study funded in the FY2024 announcement is the first-ever late-stage clinical trial for the indication of microcystic lymphatic malformations, a serious, rare genetic skin disease with no FDA-approved therapies.  This study design is both innovative and efficient, leveraging a single-arm, baseline-controlled design.  Relative to other areas of medicine (e.g., metabolism, neurology, oncology), there has not been the same focus by medical product developers on drugs for rare diseases in dermatology.

The FDA’s Orphan Products Grants Program is a cornerstone of the effort to develop treatments for rare diseases.  By providing funding for both clinical trials and natural history studies, the program supports vital research that might otherwise face financial barriers.  With grants available for up to four years and a robust review process to ensure scientific rigor, the program helps drive innovation and bring much-needed treatments to patients affected by rare conditions.

We at Hyman, Phelps & McNamara congratulate the seven FY2024 Clinical Trials Grants Program Awardees, three Natural History Studies Grants Program Awardees, and those past awardees that continue to develop treatments for patients with rare diseases.