RARE Daily

Rare Disease Drug Developers’ Deals and IPOs Boost February Numbers

March 24, 2021

Rare disease drug developers raised $2.6 billion in private and public equity during February and $10.7 billion in M&A and partnering transactions in what proved to be a busy month for transactions.

Year to date, total equity and debt capital raised by these companies rose to $5.5 billion up from $2.0 billion for the same period a year ago. M&A activity rose to $11.3 billion compared to just $73 million for the same period a year ago.

The only area where deal values were down was in partnering transactions, which saw an 83 percent decline in disclosed potential deal values despite the number of deals being unchanged.

The month started with specialty rare disease pharmaceutical Horizon Therapeutics acquiring rare disease drug developer Viela Bio in a deal valued at $3 billion, a 53 percent premium to its value ahead of the announcement.

The acquisition strengthens Horizon’s R&D capabilities with Viela Bio’s mid-stage biologics pipeline focused primarily on autoimmune and severe inflammatory diseases, plus Uplizna, approved in June 2020 for the treatment of adults with a particular antibody who have neuromyelitis optica spectrum disorder (NMOSD), a rare, severe, neuro-inflammatory autoimmune disease that attacks the optic nerve, spinal cord and brain stem. Uplizna is only the second approved treatment for the disorder, besides Alexion’s

Soliris, approved one year earlier.

Two days later, Jazz Pharmaceuticals said it would acquire GW Pharmaceuticals for $7.2 billion, expanding its neuroscience pipeline with GW’s cannabinoid platform and products focused on rare diseases. The deal represented a 50 percent premium over GW’s closing price ahead of the announcement.

The acquisition of GW bolsters Jazz’s neuroscience pipeline, adding GW Pharma’s proprietary cannabinoid product platform that addresses a broad range of rare diseases. GW Pharma’s Epidiolex is the first plant-derived cannabinoid medicine ever approved by the U. S. Food and Drug Administration for use in patients one-year and older to treat seizures associated with Lennox-Gastaut syndrome, Dravet syndrome, and Tuberous Sclerosis Complex, all of which are rare diseases characterized by severe early-onset epilepsy. In addition to the approved indications for Epidiolex, Jazz says there are considerable opportunities to pursue other indications within the epilepsy field, including other treatment-resistant epilepsies where significant unmet needs of patients exist.

Three initial public offerings in the first week of February also added to rare disease drug developers coffers. It began with Sana Biotechnology, which completed the largest IPO of a preclinical biotech company raising $676 million and putting its market capitalization at $4.9 billion.

Sana’s vision looks to repair and control genes, replace missing or damaged cells, and make its therapies broadly available to patients. The company has a broad preclinical pipeline covering a range of both in vivo and ex vivo treatments targeting rare and more common indications in oncology, hematology, metabolic, and neurology.

Danish biotech Pharvaris and Vor Biopharma quickly followed with IPOs that added $342 million more to rare disease drug developers war chests.

Pharvaris raised $165 million to advance the development of small molecule bradykinin-B2-receptor antagonists for the treatment of hereditary angioedema (HAE) and other bradykinin-B2-receptor-mediated indications.

Preclinical biotech Vor Biopharma raised $177 million to advance its work in engineered hematopoietic stem cell (eHSC) therapies that are combined with targeted therapies for the treatment of hematological cancers. Vor’s technology removes biologically redundant proteins from eHSC therapies to create next-generation, treatment-resistant transplants that unlock the potential of targeted therapies, enabling these therapies to selectively destroy cancerous cells while sparing healthy cells.

A fourth and final IPO of the month for rare disease drug developers was completed by Decibel Therapeutics, a company developing gene therapies treatments to restore and improve hearing and balance, which raised $127 million in an upsized offering priced at the top of its proposed range.

Looking ahead, March bodes well for IPOs of these companies with six lined up in the queue and two offerings completed as of this report.


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