RARE Daily

Financings and Deals for Rare Disease Therapeutics Developers Continue to Slide in September  

October 20, 2022

Marie Daghlian

Although there was only one restructuring in September—Exicure cut 66 percent of its workforce—there were 32 workforce reductions among rare disease drug developers during the first three quarters of the year. Wall Street turmoil and difficult capital markets for biotech in particular, have made access to capital difficult for most small and medium companies. The one bright spot was public financings, up 11 percent in 2022 at the end of September for rare disease therapeutics developers. This was due to two massive convertible note offerings by commercial companies—Sarepta Therapeutics’ $1 billion deal and Alnylam Pharmaceutical’s $900 million offering.

Despite these deals and a slight uptick in public equity and debt offerings in general, total public and private equity and debt raised by rare disease drug developers is down 32 percent for the first three quarters of 2022 compared to the same period in 2021. This includes a drop of 43.4 percent in venture capital financings and an 83 percent drop in money raised through initial public offerings.

In venture financings, genetic medicine platforms continued to receive significant funding. In September, Capstan launched with $102 million in a series A financing to develop and deliver precise in vivo cell engineering to patients and Pretzel Therapeutics launched with a $72.5 million in a series A financing to develop novel therapies to modulate mitochondrial function to treat rare and common diseases. 

M&A and partnering deals among therapeutics companies slowed in September. Rare disease focused M&A was down almost 50 percent for the first three quarters of 2022 compared to the same period in 2021. The largest deal was Novo Nordisk’s acquisition of Forma Therapeutics for $1.1 billion to expand its presence in sickle cell disease and rare blood disorders.

Partnering focused on rare disease has held steady, down just 1.4 percent in total deal values for the first three quarters of 2022 compared to the same period in 2021; whereas the value at signing slumped 63 percent, compared to 2021, with most of the total value dependent on reaching development, regulatory, and sales milestones.

The largest deal in September was SpringWorks expansion of its non-exclusive license and collaboration agreement with GSK for its investigational oral gamma secretase inhibitor, nirogacestat, in combination with Blenrep, GSK’s antibody-drug conjugate targeting B-cell maturation antigen, to treat multiple myeloma. The deal includes a $75 million equity investment in SpringWorks by GSK and up to $550 million in milestone payments.



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