Rare Disease Therapeutics M&A Maintains Momentum in May

Rare disease focused M&A transactions maintained their momentum in May as total potential deal values year-to-date were 192 percent above the same period in 2023, according to data compiled by Dealforma and Global Genes.

This compared to a 43 percent drop in M&A total potential deal values for all therapeutics year-to-date compared to the same period in 2023. Public financings year-to-date also ran ahead of the same time period last year and were up 200 percent, while venture financings of rare disease focused biotechs were down 32 percent year-to-date compared to the same time period in 2023. There were no biotech IPOs in May.

Three sizeable series C venture financings made up the bulk of private capital raises during the month. Zenas BioPharma raised $200 million to support mid- to late-stage clinical programs for lead product candidate, obexelimab, in a rare systemic fibro-inflammatory IgG4-related disease, in multiple sclerosis and systemic lupus erythematosus, and in warm autoimmune hemolytic anemia. Ajax Therapeutics raised $95 million to support the clinical development of its Type II JAK2 inhibitor for the treatment of myelofibrosis. And Aardvark Therapeutics raised $85 million to advance its late-stage experimental therapy, ARD-101, to treat hyperphagia in patients with Prader-Willi syndrome.

Two sizeable transactions made up the bulk of rare disease focused M&A in May: Biogen’s acquisition of Human Immunology Bio for up to $1.8 billion; and Asahi Kasei’s acquisition of Calliditas Therapeutics for $1.1 billion.

Biogen strengthened its immunology portfolio with the acquisition of Human Immunology Bio (HI-Bio) for $1.15 billion upfront and up to $650 million in potential milestone payments. HI-Bio’s lead late-stage asset, felzartamab, is a potential first-in-class therapeutic candidate with promise as a pipeline-in-a-product across a range of rare, immune-mediated diseases. Phase 2 studies have been completed in primary membranous nephropathy and antibody-mediated rejection in kidney transplant recipients and remain ongoing in IgA nephropathy, and HI-Bio has plans to advance each indication to phase 3.

The Calliditas acquisition gives Asahi Kasei Calliditas’ marketed drug Tarpeyo for IgA nephropathy, and will accelerate its transformation into a global specialty pharmaceutical business by solidifying its presence in the U.S. market and establishing a presence in Europe.

Total rare disease focused partnering potential deal values are down 24 percent year-to-date compared to the same time period in 2023, despite an uptick of 10 percent for all therapeutics partnering potential deal values for the same time period.

Fulcrum Therapeutics entered into a collaboration and license agreement with Sanofi to develop and commercialize losmapimod, an experimental oral small molecule in late-stage development to treat facioscapulohumeral muscular dystrophy (FSHD). Sanofi paid Fulcrum $80 million in cash upfront to obtain global commercialization rights outside the United States. Fulcrum is eligible to receive up to an additional $975 million in specified regulatory and sales-based milestones, plus royalties. The companies will equally share future global development costs.

Gossamer Bio entered a global collaboration and license agreement with Chiesi Farmaceutici to develop and commercialize seralutinib to address rare, pulmonary diseases. Gossamer will continue to lead global development of seralutinib in PAH and PH-ILD, and the companies will evenly split most development costs. The companies will evenly share commercial profits and losses in the United States while Chiesi will have the exclusive right to commercialize seralutinib outside of the U.S. and will pay Gossamer an escalating mid-to-high teens royalty on net sales. Chiesi will pay Gossamer $160 million as a development reimbursement and Gossamer will be eligible to receive up to $146 million in regulatory milestones and $180 million in sales milestones.