Collaborations and licensing deals were a sweet spot in October in an otherwise slow month for M&A and financings among companies developing rare disease therapeutics, according to data gathered by Dealforma and Global Genes, with 19 deals, 11 of which disclosed potential total deal values that together totaled $8.3 billion.
Year to date, total potential deal values for rare disease therapeutics companies accounted for 31 percent of all therapeutics partnering deals and are up 22.7 percent compared to the same period in 2020. This belies the fact that deal value at signing is just 13.8 percent of the total deal value year-to date. Nevertheless, that still is above the 11.2 percent for therapeutics deals overall for the same period a year ago.
Often deal value at signing is hard to discern as companies may choose not to disclose financial terms, when they do, segregate upfronts payment from the total potential deal value.
Three deals involving Takeda Pharmaceuticals accounted for $5.7 billion in deal values. The company struck agreements with Selecta Biosciences, Poseida Therapeutics, and Immusoft. That include a $45 million upfront payment to Poseida at signing.
Poseida granted Takeda exclusive rights to develop and commercialize up to eight non-viral in vivo gene therapy programs using Poseida’s nanoparticle delivery technology and genetic engineering platforms for the treatment of rare genetic and hematologic diseases. The companies will initially develop up to six in vivo gene therapy programs for liver- and hematopoietic stem cell (HSC)- directed indications. Takeda has the option to add two additional programs and will also provide research funding for all collaboration programs. Poseida will receive up to $125 million in an upfront payment and up to $80 million in success-based preclinical milestones. Poseida is also eligible for up to $3.6 billion if the milestones related to all eight programs are also achieved, plus undisclosed tiered double-digit royalties.
Selecta Biosciences granted Takeda rights to develop and commercialize gene therapies by leveraging Selecta’s ImmTOR platform for the treatment of lysosomal storage disorders. Selecta will receive an undisclosed upfront payment and is eligible to receive up to $1.124 billion in development or commercial milestone payments, plus undisclosed royalties.
Finally, Takeda entered a research partnership with Immusoft, valued at up to $900 million, to discover, develop, and commercialize cell therapies using Immusoft’s Immune System Programming (ISP) technology platform for the treatment of rare neurometabolic disorders. Takeda has an exclusive option to license the programs at preclinical stage.
After a hot third quarter 2021, M&A among rare disease drug developers came stalled in October, with just one announced deal. Cell and gene therapy biotech ElevateBio acquired Life Edit Therapeutics for its suite of gene editing technologies that have the potential for any genomic sequence of interest to be removed, added, or altered.
Although venture financings of rare disease drug developers slowed in October, with only $264 million raised by these companies, it is still tracking 38 percent ahead of the same period in 2020 with $8.1 billion in venture financings so far this year.
Intergalactic Therapeutics launched with $75 million in series A funding to develop non-viral gene therapies, Rectify Pharmaceuticals launched with $100 million in series A funding to develop disease-modifying therapeutics that restore ABC transporter function for patients with serious genetic diseases, and ReCode Therapeutics raised $80 million in series B funding to advance its lead mRNA and gene correction therapies for cystic fibrosis and primary ciliary dyskinesia into human clinical studies.
Year to date public financings of rare disease drug developers have also slowed compared to the same time period in 2020. After a roaring first half of the year, initial public offerings of these companies stopped in the beginning of August with just one completed IPO, Entrada Therapeutics’ $182 million raise, at end of October. In 2020, during the same three-month period, there were nine IPOs among rare disease drug developers that raised a combined $1.35 billion. Most of these companies are preclinical and while venture capital is flowing freely in the sector, public investors seem to be taking a more cautious attitude, waiting for proof of concept for many of the newer technologies before diving in.