Rare Disease Dealmaking Heats Up in August

Rare disease drug developers maintained a steady lead in their financing and dealmaking numbers through August, with dealmaking heating up as big pharma and big biotech snapped up companies and licensed rights to promising technologies in deals worth up to $11.7 billion in total disclosed values, according to data collected by DealForma and Global Genes.

While there were no IPOs of rare disease drugmakers in August, private and public capital continued to flow into the space, up 33 percent year to date compared to the same period in 2020. That compares to a 12 percent increase in public and private capital to all therapeutic drug developers. Rare disease drug developers raised $802 million in private capital in August with platform companies among the top deals. LaRonde raised $440 million in a series B financing to advance its eRNA for a new engineered form of RNA that can be programmed to express therapeutic proteins inside the body, and PepGen raised $112 million in a series B financing to advance its oligonucleotide platform targeting rare neuromuscular and cardiac diseases, including Duchenne muscular dystrophy.

M&A in the rare disease therapeutics space is 66 percent ahead of the same period in 2020 at the end of August, bolstered by two, billion-dollar acquisitions by Big Pharma: Sanofi’s $3.2 billion purchase of mRNA drug developer Translate Bio, with a clinical stage pipeline in cystic fibrosis and other rare pulmonary diseases, and Pfizer’s $2.2 billion purchase of Trillium Therapeutics, with a pipeline in blood cancers, many of them rare.

Sanofi made a firm commitment to accelerate the application of mRNA to develop therapeutics and vaccines with its $3.2 billion acquisition of Translate Bio, reflecting a 56 percent premium to the biotech’s volume-weighted average price per share over the 60 days before the announcement. The deal came one year after Sanofi partnered with Translate Bio to develop mRNA-based vaccines for which it had paid $425 million in an upfront and equity payment.

“Translate Bio adds an mRNA technology platform and strong capabilities to our research, further advancing our ability to explore the promise of this technology to develop both best-in-class vaccines and therapeutics,” said Paul Hudson, Sanofi CEO in announcing the deal. “A fully owned platform allows us to develop additional opportunities in the fast-evolving mRNA space. We will also be able to accelerate our existing partnered programs already under development. Our goal is to unlock the potential of mRNA in other strategic areas such as immunology, oncology, and rare diseases in addition to vaccines.”

The acquisition of Trillium by Pfizer, which already had an equity stake in the company, has an implied equity value of $2.3 billion, representing a 118 percent premium to its 60-day weighted average share price. Trillium’s portfolio includes biologics that are designed to enhance the ability of patients’ innate immune system to detect and destroy cancer cells. Its two lead molecules, TTI-622 and TTI-621, block the signal-regulatory protein α (SIRPα)–CD47 axis, which is emerging as a key immune checkpoint in hematological malignancies. TTI-622 and TTI-621 are novel, potentially best-in-class SIRPα-Fc fusion proteins that are currently in phase 1b/2 development across several indications, with a focus on rare hematological malignancies.

Pfizer plans to accelerate the clinical development of SIRPα fusion proteins as a potential new scientific breakthrough and explore combinations within its own portfolio and with other innovative next-generation medicines for hematological malignancies.

At the end of August, partnering total deal values were up 20 percent since the beginning of the year compared to the same period in 2020. August was also a busy time for collaborative dealmaking in the rare disease therapeutics space with 15 deals signed, three of them potentially worth more than $1 billion each.

In the deal with the biggest potential payout, Roche entered into a multi-target strategic collaboration and license agreement with Shape Therapeutics, valued at $3 billion, focused on neurologic vectors. Shape will apply its proprietary RNA editing platform and technology platform for next-generation tissue-specific adeno-associated viruses (AAVs) to develop gene therapies for certain targets in the areas of Alzheimer’s disease, Parkinson’s disease, and rare diseases. Shape will conduct preclinical research to identify and deliver development candidates and Roche will be responsible for the development and worldwide commercialization of any potential products resulting from the collaboration.

Vertex Pharmaceuticals entered a new collaboration with Arbor Biotechnologies to develop ex vivo engineered cell therapies using Arbor’s proprietary CRISPR gene-editing technology for select diseases. The deal, valued at $1.2 billion in undisclosed upfront, equity, and milestone payments, builds upon the companies’ first partnership established in 2018, gives Vertex rights to use Arbor’s technology to research and develop ex vivo engineered cell therapies towards Vertex’s goal of generating fully differentiated, insulin-producing hypoimmune islet cells for the treatment of type 1 diabetes, for next-generation approaches in sickle cell disease and beta thalassemia, and for the treatment of other diseases.

Ipsen and Exicure signed an exclusive collaboration to research, develop, and commercialize novel spherical nucleic acids as potential treatments for the rare neurodegenerative conditions Huntington’s disease and Angelman syndrome. Ipsen received exclusive options to license spherical nucleic acids (SNA)-based therapeutics arising from two collaboration programs for Huntington’s disease and Angelman syndrome, paying Exicure $20 million upfront. Exicure will be responsible for discovery and certain preclinical development activities. If Ipsen exercises its option, Ipsen will be responsible for further development and commercialization of the licensed products. Exicure will be eligible to receive up to $1 billion in option exercise fees and milestone payments should Ipsen opt into both programs, as well as tiered royalties.