Rare Disease Therapeutics Financings and Deals Continue to Lag 2021

Rare disease therapeutics developers continued to struggle in November as the list of restructurings and workforce reductions rose to 40 companies since the beginning of the year and year-to-date numbers lagged in most financings and deals compared with the same time period in 2021.

Overall, companies developing rare disease therapeutics have raised $15.3 billion in public and private capital in 2022 through the end of November, down 30.6 percent compared to the same period in 2021, according to data gathered by Dealforma and Global Genes.

Only a handful of private companies have gone public so far this year, raising a total of $800 million, down 80 percent from the $4 billion raised as of the end of November 2021.

There were a few significant rare disease focused financings in November. Human Immunology Biosciences launched with $120 million in financing and multiple clinical-stage programs for severe immune-mediated diseases. HI-Bio’s clinical-stage assets include felzartamab, an anti-CD38 antibody, and HIB210, an anti-C5aR1 antibody. Felzartamab targets a protein expressed on the surface of mature plasma cells whose dysfunction is thought to drive several immune-mediated diseases. HI-Bio is testing felzartamab for membranous nephropathy (MN) and IgA nephropathy (IgAN), both rare conditions, with potential to be the best-in-class therapy for autoantibody diseases. HIB210 is currently in ongoing phase 1 safety testing, with anticipated studies in IMDs currently being planned.

Zenas BioPharma raise $118 in a series B equity financing that will support advancing a pipeline of programs targeting autoimmune and rare diseases, including the clinical advancement of the company’s lead product candidate obexelimab in a global phase 3 registration trial in patients with IgG4-related disease (IgG4-RD), which will be initiated in late 2022. In addition, the new funding will progress the company’s other global autoimmune disease programs into clinical development in 2023.

Dealmaking also lagged in November, with total potential rare disease focused partnering and licensing deal values down 26 percent and potential M&A deal values down 60 percent year-to-date compared to 2021. One bright spot that will brighten rare disease M&A is Amgen’s announcement in early December that it is acquiring Horizon Therapeutics for $28 billion (not included in these figures).

November was not totally devoid of activity though. In M&A, Merck followed many of its Big Pharma competitors in expanding into the rare disease space by scooping up Imago BioSciences for $1.4 billion. Imago is developing therapies for myeloproliferative neoplasms and other bone marrow diseases. Lead candidate bomedemstat is an investigational orally available lysine-specific demethylase 1 inhibitor, currently being evaluated in multiple phase 2 clinical trials for the treatment of essential thrombocythemia, myelofibrosis, and polycythemia vera, in addition to other indications.

While partnering activity has been robust among therapeutics companies, the financials of many of these deals are not disclosed. Data from Dealforma shows that of the 692 therapeutics licensing and collaborative agreements signed so far in 2022, only 228, or less than one third of them have disclosed deal values.

The biggest rare disease focused collaboration in November was a second agreement between Roche and Jnana Therapeutics, a company leveraging its next-generation chemoproteomics platform to discover medicines for challenging-to-drug targets, covers multiple targets from a diverse range of target classes to address diseases with high unmet need. Jnana will receive $50 million upfront and potentially in excess of $2 billion in milestones. Their first collaboration, signed in July 2020 and valued at more than $1 billion, was for the discovery of small molecule drugs directed at the solute carrier family of metabolite transporters as a broad, innovative approach for modulating cellular metabolism to treat immune-mediated and neurological diseases. Jnana also closed a $107 million financing to advance its lead program in proof-of-concept clinical trials for the treatment of the rare genetic disease phenylketonuria.