Rare Disease Focused Therapeutics M&A Soars in April

Two sizable acquisitions marked an otherwise slow April for rare disease focused therapeutics financings and deals, with total potential M&A deal values year-to-date up more than 300 percent compared to the same period in 2003, according to data from Dealforma and Global Genes.

Vertex Pharmaceuticals acquired immunotherapy developer Alpine Immune Sciences for $4.9 billion, gaining lead experimental therapy povetacicept for the treatment of the rare, autoimmune disease IgA nephropathy. Povetacicept has shown potential best-in-class efficacy in IgA nephropathy, Vertex said, is on track to enter phase 3 clinical development in the second half of 2024, and has potential for other serious autoimmune diseases of the kidney and autoimmune cytopenias.

At the end of the month, Japan-based ONO Pharmaceutical said it would acquire Deciphera Pharmaceuticals for $2.4 billion, gaining a portfolio of rare cancer therapeutics that include the marketed drug Qinlock for the treatment of fourth-line gastrointestinal stromal tumor, and vimseltinib, in development for the treatment of tenosynovial giant cell tumor and potentially other indications.

After a strong first quarter, major biotech indices reached new lows in mid-April before heading upward again. The IPO market for biotech was quiet with only one therapeutics developer managing to complete an initial public offering in April. Despite few public financings among rare disease-focused biotechs in April, the total raised year-to-date remains well above last year’s numbers. Driven in large part by robust private investment in public equity, there has been a 238 percent increase in funding compared to the same period a year ago.

In April, Zura Bio completed a $112.5 million PIPE to support the planned phase 2 trial in systemic sclerosis, and the initiation of a phase 2 trial evaluating tibulizumab for the treatment of hidradenitis suppurativa.

At the same time, venture investment in private companies focused on rare disease therapeutics remains muted and is down 18 percent year-to-date compared to the same period last year.

Six private rare disease focused companies raised a combined $510 million in April with half of that going to just two of them. Diagonal Therapeutics, which is pioneering a new approach to discovering and developing agonist antibodies, launched in April with $128 million in a series A financing and is first focusing on hereditary hemorrhagic telangiectasia, a rare, severely debilitating bleeding disorder. Endeavor BioMedicines raised $132.5 million in a series C financing to advance lead candidates for rare fibrotic lung diseases and solid tumors.

Partnering total potential deal values remained below 2023 numbers at the end of April, down 11 percent from last year’s numbers. The month saw two significant potential billion-dollar deals.

Regeneron Pharmaceuticals and Mammoth Biosciences entered an in vivo CRISPR-based gene editing therapies collaboration using Regeneron’s adeno-associated viral vectors, that have antibody-based targeting for specific tissues and cell types, with Mammoth’s ultracompact nucleases and gene-editing systems. Mammoth received $100 million upfront, $95 million of which was an equity investment, and is eligible to receive up to $370 million per target in development, regulatory and commercial milestone payments, and royalty rates on future net sales of all collaboration products.

Ipsen entered into an exclusive, global collaboration with Skyhawk Therapeutics to discover and develop small molecules that modulate RNA for rare neurological diseases. Skyhawk is eligible to receive up to $1.8 billion in upfront, development, regulatory, and commercial milestones, plus the potential for tiered royalties. Ipsen has the option to acquire exclusive license for the worldwide rights to develop successful development candidates. Skyhawk’s technology accelerates building RNA-targeting small molecules across several therapeutic areas, including rare neurological diseases, allowing for the exploration of previously undruggable RNA targets with small molecules.