Investors embraced companies developing therapies for rare diseases in the first half of 2021 with $13.7 billion in new investment through private and public offerings, a 42 percent increase from the same period in 2020, according to data from DealForma and Global Genes.
The biggest gains came from initial public offerings, which have skyrocketed in 2021 as 58 therapeutics companies went public raising $9.4 billion, up 90 percent compared to the first half of 2020. Rare disease drug developers accounted for 17 of those deals (29.3 percent) and $3.55 billion (37.7 percent) of the money raised. That compared to 10 rare disease therapeutics companies raising $1.9 billion in IPOs during the first half of 2020.
Three rare disease biotechs went public in June: Verve Therapeutics, a preclinical biotech focused on gene editing for rare cardiovascular diseases, raised $307 million; Graphite Bio, a phase 1 biotech with a gene editing/gene therapy platform, raised $274 million; and Aerovate Therapeutics, a phase 2 biotech developing inhaled drugs for idiopathic pulmonary fibrosis, raised $140 million.
Half year 2021 venture funding for all therapeutics companies, at $19.7 billion, is at an all-time high and 83 percent more than the $10.7 billion raised in the first half of 2020. It’s also up 30.6 percent for rare disease therapeutics companies, collectively accounting for $4.8 billion (24.4 percent) of the total raised.
June, however, saw a lull in venture financings of companies focused on rare diseases. During the month, rare disease companies raised only $266 million. U.K.-based Apollo Therapeutics raised $145 million in funding to advance a pipeline of more than 15 programs across oncology, major inflammatory disorders, and rare disease. Apollo’s business model is similar to that of BridgeBio in that it looks to accelerate the translation of breakthrough academic discoveries to medicines for unmet needs.
M&A is another bright spot for rare disease drug developers as transactions soared 225 percent in the first half of 2021 compared to the same period in 2020. As AstraZeneca’s bid to acquire Alexion cleared regulatory hurdles. Other major players are getting into the precision medicine/rare disease space. June saw German oncology pharma Morphosys snap up Constellation Pharmaceuticals for $1.7 billion, a 68 percent premium to its share price ahead of the deal. The acquisition strengthens MorphoSys’ rare cancer portfolio with Constellation’s BET inhibitor in phase 3 for myelofibrosis, and second-generation EZH2 inhibitor in phase 2 for hematological and solid tumors.
Total disclosed deal values for partnering deals involving rare disease companies were down in the first half of 2021 compared to the same period in 2020, but that may be because more companies are not disclosing the financials of their deals. Fifty-seven partnering deals involving drug discovery and development were announced in June, but only 17 of them included the financial arrangements. Nine of these collaborations focused on rare disease drug discovery and development with none of them including details of the financial arrangement.