RARE Daily

Investors Pile $2.2 Billion into Rare Disease Therapeutics Developers in April

May 19, 2021

The numbers, buoyed by continued interest in genetic medicines, included $758 million in venture capital financing for 10 companies, $676 million in three initial public offerings, and $799 million in public financings. Rare disease drug developers accounted for one quarter of the $3 billion raised in venture capital in April, more than half of the $1.3 billion in capital raised through eight IPOs, and almost half the capital raised through public company equity and debt deals.

Notable deals included Recursion Pharmaceuticals’ $436 million IPO to advance its industrialized drug discovery platform focused on rare diseases and other indications; Jaguar Gene Therapy’s $139 million series B financing to accelerate the development of its preclinical pipeline targeting severe genetic diseases; Forge Biologics’ $120 million series B financing to support its hybrid gene therapy contract manufacturing and therapeutic development activities; and Ionis Pharmaceuticals $550 million private placement of convertible senior notes to support a late stage clinical trial of an experimental antisense therapy in patients with amyotrophic lateral sclerosis with mutations in the fused in sarcoma gene, a rare form of ALS.

Partnering activity involving rare disease drug developers accounted for 55 percent of the $8.4 billion in total partnering potential deal values, and $1.1 billion of the $1.2 billion paid at signing. Vertex Pharmaceuticals, a big player in the cystic fibrosis space, made a big move into gene editing through a development and commercial licensing deal with CRISPR Therapeutics for its sickle cell disease and transfusion-dependent beta thalassemia experimental gene editing therapy CTX-001 that was developed through a 2015 agreement between the two companies. Vertex upped its stake in the program to 60 percent of costs and profits, paying CRISPR $900 million upfront and $200 million in potential milestones. Vertex continued its push into gene editing through a discovery and option deal with Obsidian Therapeutics to develop and commercialize up to five gene editing therapies using Obsidian’s cytoDRiVE platform, with Vertex having an option to license exclusive, worldwide rights to the therapies and responsibility for development and commercialization. Vertex paid Obsidian $75 million upfront, and will contribute equity and research payments over five years. Obsidian is eligible to receive up to $1.3 billion in milestones for five potential programs, plus tiered royalties.

April was not a strong month for M&A dealmaking, with only $1.7 billion in total deal values for therapeutics developers of which $710 million focused on companies developing therapeutics for rare conditions. The only significant deal in the rare disease space was Sanofi’s acquisition of privately held rare cancer drug developer Tidal Therapeutics for $470 million, with $160 million of that paid upfront.

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