February Roars with $3.2 Billion Raised by Public Rare Disease Therapeutics Developers

Wall Street interest in biotech boomed over the past few months as rare disease drug developers raised $3.2 billion, according to data gathered by DealForma and Global Genes. That represented a 318 percent increase compared to the same period in 2023.

Some $2 billion of the funds raised came in the form of nine PIPE financings—negotiated deals in which publicly traded companies sell shares to private investors such as institutional and hedge funds, which have surged over the past two months.

Multimillion dollar PIPE financings in February by rare disease focused biotechs included $500 million raised by Denali Therapeutics, $400 million raised by Avidity Biosciences, and $350 million raised by Crinetics Pharmaceuticals.

The surge in public financings also included IPOs and the first two rare disease focused initial public offerings were completed in February by Kyverna Therapeutics and Metagenomi.

Kyverna Therapeutics raised $319 million in an upsized initial public offering, becoming the first rare disease therapeutics developer to complete an IPO in 2024. Kyverna develops autologous CAR T cell therapies that target B cell-driven autoimmune diseases.

Gene editing biotech Metagenomi raised $94 million in an IPO to advance its technology, which uses AI and metagenomics to quickly identify novel gene editing systems with properties that include the capability to precisely edit genomes via single base changes, knockouts, or integrations, with lower potential for off-target effects.

The surge in availability of public capital was tempered by the paucity of venture financings for rare disease therapeutics developers in February as no new money was added to their coffers and capital raised in 2024 to date down 35 percent compared to 2023.

On the partnering front, there was one significant billion-dollar deal signed in the month with total potential partnering deal values up 15.5 percent in 2024 compared to 2023 over the first two months of the year.

Neomorph entered into a collaboration and licensing agreement with Novo Nordisk to discover, develop and commercialize molecular glue degraders for cardiometabolic and rare diseases that is potentially valued at up to $1.5 billion. While exact financial terms were not disclosed, Neomorph will lead discovery and preclinical activities against selected targets with Novo Nordisk having the right to exclusively pursue further clinical development and commercialization of the compounds.

Rare disease focused M&A numbers also benefited with Gilead Sciences announcing that it would acquire CymaBay Therapeutics for $4.3 billion, ending February with M&A total potential deal values up 83 percent compared to the first two months of 2023.

Gilead Sciences expanded its liver portfolio through the acquisition of CymaBay Therapeutics for $4.3 billion

Gilead Sciences and CymaBay Therapeutics signed definitive agreement under which Gilead will acquire CymaBay for $32.50 per share in cash or a total equity value of $4.3 billion, a 27 percent premium to CymaBay’s closing share price ahead of the announcement.

The deal adds and complements CymaBay’s investigational lead product candidate, seladelpar, to Gilead’s existing portfolio, which has been accepted and granted priority review by the U.S. Food and Drug Administration for the treatment for the management of primary biliary cholangitis including pruritus in adults without cirrhosis or with compensated cirrhosis who are inadequate responders or intolerant to ursodeoxycholic acid.