WASHINGTON (Reuters) - A unique new institute will look for ways to treat rare and neglected diseases and take the first and riskiest steps toward bringing new drugs to market, U.S. health officials said on Wednesday.

Congress has provided $24 million a year for five years to start the Therapeutics for Rare and Neglected Diseases Program, or TRND at the National Institutes of Health, acting NIH director Dr. Raynard Kington told reporters in a telephone briefing.

The program will use taxpayer money to get drugs through the most costly and dangerous phase of development, known as the "Valley of Death" because so many fail there.

It will publish details of failures as well as successes to guide other researchers, the NIH said.

"Twenty-five to 30 million Americans suffer from rare or neglected diseases," Kington said.

A rare disease is one that affects fewer than 200,000 Americans, and NIH estimates there are about 6,800 of these conditions, ranging from multiple symmetric lipomatosis or Madelung's disease, characterized by large fat deposits around the neck and nervous system abnormalities, to pseudomyxoma peritonei, in which tumor cells swell up the abdomen.

Only about 200 of these conditions, many of which affect fewer than a dozen people, have treatments.

"We don't know yet exactly which diseases this program will take on," Dr. Alan Guttmacher, acting director of the National Human Genome Research Institute, told the briefing.

He said the new institute would be opportunistic, pouncing on promising research studies, some of which may be funded by advocacy groups for rare diseases.

Often drug companies are afraid to take on this work, Guttmacher added. "Getting a promising chemical through the pre-clinical stages of drug development is fraught with failure," Guttmacher said.

"It is colloquially called the "Valley of Death." This stage of drug development can take two to four years of work, costs tens of millions of dollars," and still fail, he added.

90 PERCENT FAILURE

The NIH estimates that up to 90 percent of all potential drugs fail to make it from the lab into human volunteers for safety testing.

The group will publish details even of failures -- something that rarely happens in the world of medical publishing now and a focus that can sometimes lead researchers to cover up or minimize dangers.

"We are going to tell everyone what we are doing," said Dr. Christopher Austin of the NIH Chemical Genomics Center. "That alone will be revolutionary." Early-stage research is often considered proprietary by companies.

One project that may get funding -- a potential new drug to treat schistosomiasis, which is not rare but is considered a "neglected" tropical disease. The parasite kills 280,000 people a year.

A researcher came to the NIH to test a promising new drug and the team published a study last year showing the compound -- still known only by its chemical name 4-phenyl-1,2,5-oxadiazole-3-carbonitrile-2-oxide -- may work.

"When we go to this point there were no resources to carry this project forward. This, I think, is one of the projects that we are going to put into the trend queue," Guttmacher said.

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