Rare Disease Trailblazers’ Lawsuit Offers Lessons for Others 


Shortly after I first began my involvement in the rare disease community, I was taken by the story of Chris and Hugh Hempel, the parents of twins Addi and Cassie, who have the ultra-rare and fatal genetic disease Niemann-Pick Type C.

Niemann-Pick Type C is a lysosomal storage disorder. The metabolic condition results from an inability to properly breakdown fats. As a result, lipids accumulate in organs including the brain and cause progressive damage including dementia, seizures, and cataplexy. There is no treatment or cure for the condition, which afflicts about 500 people worldwide.

Rather than wait for researchers and drug companies to develop new treatments, and refusing to watch the condition slowly take their daughter’s lives without doing something, the Hempels took it upon themselves to find a therapy. They identified cyclodextrin, a sugar that’s used in household projects and is an inactive ingredient in pharmaceuticals, as a potential treatment. They raised money for research, drove studies of cyclodextrin, and even won approval from the U.S. Food and Drug Administration to administer the experimental therapy intravenously to their daughters.

The Hempels were not the first parents to dive head first into drug discovery and development in the hopes of saving their children. Folks like John Crowley and Brad Margus had proceeded them, and other have followed, motivated by the awareness that time is their enemy and that no one is moving with enough urgency to help their children. But I became aware of their unfolding story as I was becoming involved in the world of rare diseases. The Hempel’s story is an example of the extraordinary things that parents of rare disease patients can accomplish in the face of impossible odds. But it is also turning into a cautionary tale.

Earlier this month, the Hempels filed suit in United States District Court for the District of Nevada against Cydan Development, Cydan II, Vtesse, and Sucampo Pharmaceutical alleging breach of contract, misappropriation of confidential data, violations of a confidentiality agreement, and the misappropriate of the Hempel’s confidential business plans. Hugh Hempel is a board member of Global Genes, publisher of Rare Daily.

Cydan is a venture capital-backed drug development incubator that the suit said approached the Hempels about forming a joint venture to develop and commercialize a cyclodextrin treatment based on the Hempels’ private research. Vtesse is a Cydan affiliate created to develop a cyclodextrin therapy for Niemann-Pick type C, and Sucampo is a pharmaceutical company that subsequently acquired Vtesse for $200 million. Sucampo is currently being acquired by Mallinckrodt Pharmaceuticals for $1.2 billion.

“The Hempels dedicated their lives and spent millions of dollars of their own capital and community donated funds to develop medical treatments for an ultra-rare, genetic disease known as Niemann-Pick disease, Type C (“NPC”) that afflicts their identical twin daughters. The Hempels planned to commercialize those treatments, and pour the proceeds back into the NPC community, allowing those affected by NPC disease to control the treatments, the development, and the pricing,” the suits says. “Instead, Cydan, Vtesse, and Sucampo swooped in to misappropriate the Hempels’ confidential information and trade secrets, developed a directly competitive treatment, and sold it to an international pharmaceutical company for hundreds of millions of dollars. Cydan’s, Vtesse’s, and Sucampo’s misconduct robbed the NPC community of its power to fund and control future developments in NPC treatments, and their ill-gotten gains must be disgorged.”

Sucampo said in a statement to the press that it cannot comment on ongoing litigation, but noted that it is pleased “to play an active role in advancing the science around this potential treatment for Niemann-Pick Disease Type C with the scientific rigor that a clinical trial demands – all in efforts to benefit the patients and families living with this devastating, fatal disease for which there is no approved therapy in the U.S.”

Cydan also told reporters that it cannot comment on ongoing litigation, but that the Hempel’s “claims are without merit” and that it plans to “vigorously defend” itself.” It also expressed its commitment to improving the lives of patients with rare monogenic diseases and expressed its pleasure in advancing a potentially meaningful treatment for NPC.

The rare disease community will watch the unfolding case with interest. The controversy, though, should already serve as a reminder to rare disease patients and rare disease advocacy groups, particularly as their desire to move as fast as possible to find treatments for loved ones with rare conditions. As they immerse themselves in the world of rare disease, they must not only navigate issues of science and policy, but business as well.

When a rare disease parent receives a diagnosis, they often begin to climb a steep learning curve about genetics, biology, drug development, and drug regulation. If they are successful at raising money to fund research and advance potential therapies, they will interact with government representatives, academic researchers, and drug development companies.

But while science can be complex, so too can be business. It’s not enough to believe goals are aligned. Adequate steps need to be taken to protect intellectual property rights and lawyers need to craft clear agreements spelling out the rights and obligations of those involved. Even when things are done right, they can go wrong.

 I’m not sure what went wrong in the case of cyclodextrin. That may become clear as the lawsuit unfolds. What I do know, to borrow from Cyndi Lauper (who borrowed from Tom Gray and The Brains), is that money changes everything. That’s something rare disease patients and their parents should remember.

January 19, 2018

Filed Under: Business, Deals, In Rare Form, Insights, People & Organizations, Rare Community

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