Rare Disease Therapeutics Financing and Dealmaking Get Boost in May

Rare disease focused therapeutics developers got a boost in May with several big ticket financings and deals. Though the level of activity at the end of May was below the same period in 2022, overall it represents the greatest level of activity so far this year.

Private and public equity capital flowed into rare disease focused companies in May, bolstering the overall numbers, with venture financings year-to-date down just 18 percent compared to the same period in 2022 as compared to down 29 percent at the end of April. At the same time, the market for initial public offerings for biotech remained chilly, with just one IPO in May—the late-stage biotech Acelyrin raised $540 million.

Two large venture rounds buoyed the numbers in May. ElevateBio, closed a $401 million series D financing to further advance the company’s technology platforms, which include Life Edit gene editing, induced pluripotent stem cells (iPSCs), and RNA, cell, protein, vector engineering, and BaseCamp, its end-to-end genetic medicine cGMP manufacturing and process development business to accelerate the design, manufacturing, and development of cell and gene therapies. A day earlier, Renagade Therapeutics announced it had raised $300 million in a series A financing led by MPM BioImpact and F2 Ventures to enabling the delivery of RNA medicines to previously inaccessible tissues and cells in the body and expanding the potential addressable disease market.

Krystal Biotech raised $160 million in a private offering of public stock after the company received FDA-approval for its redosable gene therapy Vyjuvek for the treatment of patients six months of age or older with dystrophic epidermolysis bullosa. It is the first redosable gene therapy to be approved by the agency.

Two potentially $1 billion plus rare disease focused partnering deals raised May numbers 7.6 percent compared to the same period in 2022. However, the disclosed value of deals at signing fell 11 percent between April and May and was down 39 percent year-to-date compared to the same period in 2022.

Life Edit Therapeutics, an ElevateBio subsidiary, entered into a research and development collaboration with Novo Nordisk potentially valued at up to $1.9 billion to discover and develop gene editing therapies against a select set of therapeutic targets. Under their agreement, Novo Nordisk will leverage Life Edit’s suite of base editing technologies to precisely edit the genome with the aim of developing therapies for rare genetic disorders as well as more prevalent cardiometabolic diseases. The collaboration allows for the development of up to seven programs.

Scribe Therapeutics entered a strategic collaboration worth up to $1.6 billion with Eli Lilly’s Prevail Therapeutics that provides exclusive rights to Scribe’s CRISPR X-Editing technologies for the development of in vivo therapies directed to specified targets known to cause serious neurological and neuromuscular diseases. Scribe’s platform technology enables it to transform bacterial immune systems into therapeutically relevant genome editing technologies that target the specific needs of patients.

Under the terms of the agreement, Scribe will receive $75 million consisting of an upfront payment and equity investment in the form of a convertible note and is eligible to receive more than $1.5 billion in development and commercial milestone payments. In addition, Prevail will pay research funding and tiered royalties ranging into the low double-digits on net future sales. Scribe also has the right to opt-in to co-fund and share profits in the United States on one collaboration program.

At the end of May, rare disease focused M&A was up 49 percent compared to the same period in 2022. And while big pharmaceuticals Pfizer and Takeda have downsized their pipelines in the area, two mid-sized players boosted their rare disease pipelines.

Swedish Orphan Biovitrum, or Sobi, said it would acquire CTI Biopharma, a company focused on blood related cancers and rare diseases, in a deal valued at $1.7 billion. The deal that strengthens Sobi’s hematology franchise by adding Vonjo, a novel oral kinase inhibitor that inhibits JAK2, IRAK1 and ACRV1, while sparing JAK1 that was granted accelerated approval by the FDA in February 2022 for treatment of adults with intermediate or high-risk primary or secondary myelofibrosis.

GI-focused biotech Ironwood Pharmaceuticals said it would acquire Swiss biotech VectivBio and its lead investigational asset, apraglutide, a next-generation, GLP-2 analog in phase 3 studies with plans for topline readout by the end of 2023. Ironwood is paying $17.00 per share in an all-cash transaction with an estimated aggregate value of approximately $1 billion, net of VectivBio cash and debt, and at a premium of 80 percent relative to the volume-weighted average share price over the previous 90 trading days.