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In 2010, the National Institutes of Health (NIH) established the Therapeutics for Rare and Neglected Diseases (TRND) program within the National Center for Advancing Translational Sciences (NCATS), which was created to stimulate drug discovery and development for rare and neglected tropical diseases through a collaborative model between the NIH, academic scientists, nonprofit organizations, and pharmaceutical and biotechnology companies. This paper describes one of the first TRND programs, the development of 2-hydroxypropyl-β-cyclodextrin (HP-β-CD) for the treatment of Niemann-Pick disease type C1 (NPC1). NPC is a neurodegenerative, autosomal recessive rare disease caused by a mutation in either the NPC1 (about 95% of cases) or the NPC2 gene (about 5% of cases). These mutations affect the intracellular trafficking of cholesterol and other lipids, which leads to a progressive accumulation of unesterified cholesterol and glycosphingolipids in the CNS and visceral organs. Affected individuals typically exhibit ataxia, swallowing problems, seizures, and progressive impairment of motor and intellectual function in early childhood, and usually die in adolescence. There is no disease modifying therapy currently approved for NPC1 in the US. A collaborative drug development program has been established between TRND, public and private partners that has completed the pre-clinical development of HP-β-CD through IND filing for the current Phase I clinical trial that is underway. Here we discuss how this collaborative effort helped to overcome scientific, clinical and financial challenges facing the development of new drug treatments for rare and neglected diseases, and how it will incentivize the commercialization of HP-β-CD for the benefit of the NPC patient community.