July turned out to be a hot month in many ways—as temperatures soared, so did IPOs and venture financings during a period that often tends to be slow—with rare disease drug developers raising $1.5 billion in private and public financings during July, according to data gathered by Dealforma and Global Genes.
Total new capital raised in 2021 by companies focused on rare disease therapies rose to $15.6 billion, up 32 percent compared to the same period in 2020. This compares to an increase of just 8.7 percent for new capital raised through public and private financings by all therapeutics companies since the beginning of year. A 34 percent drop in capital raised through public equity and debt financings (excluding IPOs) compared to the same period in 2020, accounted for the difference as gains in venture financing soared 80 percent and IPOs of therapeutics companies shot up 58 percent.
Companies developing therapies for rare conditions raised $1 billion in private funding rounds in July, with five companies accounting for $759 million, or three quarters of the total. Prime Medicine launched in mid-July with a combined series A and B funding of $315 million to advance drug discovery programs targeting genetic liver, eye, ex-vivo hematopoietic stem cell, and neuromuscular indications with the potential of providing lifelong cures. The company’s next-generation gene editing, called prime editing, acts like a DNA word processor to “search and replace” disease-causing genetic sequences at their precise location in the genome, without resulting in double-strand DNA breaks that cause unwanted cellular changes.
Deep Genomics, which uses AI and machine learning to program and prioritize RNA therapeutics for genetic diseases, closed $180 million in a series C financing to advance its first 10 AI-discovered programs, including experimental therapies for the rare genetic disorders Wilson disease, Niemann-Pick Disease Type C, and frontotemporal dementia, toward the clinic, expand the AI Workbench, and scale its pipeline to 30 programs.
Three rare disease-focused biotechs were among the 18 companies that completed IPOs in July adding a combined $422 million to their coffers: Tenaya Therapeutics ($180 million) for rare heart conditions, Imago Biosciences ($134 million) for rare bone cancers, and Rallybio ($81 million) for rare blood and immunological disorders.
Total potential partnering deal values remained below their values at this time in 2020, as many companies choose not to disclose deal financials. Among deals focused on rare diseases, partnering deal values at signing are down 7.3 percent for the year compared to the same period in 2020. There were 16 rare disease-focused collaborations in July, with $823 million in upfront payments at signing and accounting for a quarter of the upfront cash and equity raised by all therapeutics companies in July.
In the largest deal at signing, GlaxoSmithKline and Alector entered a global collaboration to develop and commercialize two clinical-stage, potential first-in-class monoclonal antibodies, AL001 and AL101, targeting neurodegenerative disorders, including frontotemporal dementia, amyotrophic lateral sclerosis, Parkinson’s disease, and Alzheimer’s disease. GSK paid Alector $700 million in upfront payments and will pay up to an additional $1.5 billion in clinical development, regulatory and commercial launch-related milestone payments. Alector will lead the global clinical development of the two antibodies through phase 2 proof-of-concept, after which the companies share development responsibilities for all late-stage clinical studies for and all costs for global development. The companies will be jointly responsible for commercialization in the United States and will share profits and losses. Alector will lead commercial efforts associated with AL001 in orphan indications and GSK will lead the commercialization of AL101 in Alzheimer’s and Parkinson’s disease. Outside the United States, GSK will be responsible for commercialization of AL001 and AL101 and Alector will be eligible for tiered royalties.
Therapeutics M&A continued to pace ahead of 2020 numbers, despite the lack of any deals greater than $2.5 billion in July. Potential deal values for rare disease-focused M&A accounted for $1.5 billion in July, but only $275 million at signing. In the one potentially large deal, Novo Nordisk branched out from its traditional focus in diabetes and obesity to acquire Prothena’s clinical stage antibody PRX004 and broader ATTR amyloidosis program for up to $1.2 billion. Novo Nordisk paid Prothena $100 million in upfront and near-term clinical milestones and will pay up to $1.2 billion in development and sales milestones.