Rare Disease Therapeutics M&A off to a Strong Start in 2023, But Financings Remain Lackluster
February 13, 2023
Two significant acquisitions ushered in 2023 for rare disease drug developers with Chiesi Farmaceutici’s acquisition of Amryt Pharma for up to $1.5 billion and Ipsen’s acquisition of Albireo for up to $1.2 billion.
These deals were the highlight of an otherwise lackluster month for capital raising for rare disease therapeutics developers and drug developers in general. Total equity and debt raised by all therapeutics developers fell 51 percent and was down 17 percent for rare disease focused companies compared to 2022, according to data gathered by Dealforma and Global Genes.
The new year usually brings a spate of M&A activity around the annual J. P. Morgan Healthcare Conference, which often brings with it at least one multi-billion dollar deal. While no such deal was announced this year, total M&A activity was up 28 percent for all drug developers, and 79 percent for rare disease drug developers compared to January 2022.
Chiesi Farmaceutici acquired Amryt Pharma for up to $1.5 billion to expand its rare disease medicine portfolio with the addition of several approved therapeutics. The deal includes approximately $1.25 million in upfront cash, representing a 107 percent premium based on Amryt ADS’ closing price of $7.00 on January 6, 2023, plus CVRs representing an additional approximately $225 million of potential consideration. Amryt’s Filsuvez was approved in the European Union in June 2022 for the treatment of partial thickness wounds associated with dystrophic and junctional epidermolysis bullosa in patients 6 months and older. Filsuvez is the first treatment approved in any market to treat epidermolysis bullosa, a rare and devastating group of hereditary disorders of the skin, mucous membranes, and internal epithelial linings characterized by extreme skin fragility and blister development.
Ipsen is acquiring Albireo, a developer of bile-acid modulators to treat pediatric and adult rare liver diseases, in a move designed to expand its portfolio and pipeline of rare disease therapies, for $952 million, a premium of 104 percent, and up to $227 million in contingent value rights. Albireo’s Bylvay is a once-daily, oral, non-systemic ileal bile acid transport inhibitor approved in 2021 in the U.S. for the treatment of pruritus in patients three months of age and older with progressive familial intrahepatic cholestasis, and in the European Union for the treatment of patients aged six months or older.
While IPO activity remained slow in January, several rare disease drug developers raised capital in the public markets as total public equity and debt raised by these companies in January 2023 rose 103 percent compared to January 2022.
Pliant Therapeutics went to the capital markets to raise $287 million after reporting positive results from a mid-stage trial of its lead experimental therapeutic for the treatment of idiopathic pulmonary fibrosis.
Bluebird Bio said it raised $120 million in a public offering to support the commercialization and manufacturing of its two approved gene therapies, Zynteglo and Skysona. Bluebird also sold a priority review voucher to Bristol Myers Squibb for $95 million.
And Fulcrum Therapeutics raised $125 million in an underwritten public offering of its common stock, on the heels of announcing the departure of its CEO, Bryan Stuart, and the naming of Robert Gould, who headed the company when it launched in 2016, as interim CEO. Fulcrum’s lead program losmapimod is in late-stage development for the treatment of facioscapulohumeral muscular dystrophy.
Venture investment into rare disease drug developers fell 40 percent in January to just shy of $500 million compared to the same month in 2022. Amolyt Pharma closed a $138 million series C financing to advance a rare endocrine disease focused pipeline including potential treatments for hypoparathyroidism and acromegaly. Metagenomi added $100 million in an extension of its series B financing, which it will use to advance clinical development genetic medicines developed using its CRISPR-based gene editing systems.
January saw a spate of partnering deals focused on rare disease therapeutics but few deals with disclosed financials. Rare disease partnering disclosed deal value at signing was just $352 million, down 44 percent compared to January 2023, with total potential disclosed partnering deal values down 50 percent compared to the same period last year.
Among the most potentially lucrative deals, Voyager Therapeutics entered a new strategic collaboration with Neurocrine Biosciences to advance multiple gene therapies for the treatment of neurological diseases in a deal potentially valued at up to $1.725 billion.
The collaboration includes Voyager’s preclinical GBA1 gene therapy program for Parkinson’s disease and other GBA1-mediated diseases, which combines a GBA1 gene replacement payload with novel capsids from Voyager’s TRACER platform. Neurocrine and Voyager have also agreed to collaborate on three new gene therapy programs directed to rare CNS targets, each also leveraging Voyager’s novel TRACER capsids. Voyager received $175 million upfront, which includes $136 million in cash and $39 million in an equity investment. Neurocrine Biosciences has also agreed to fund all costs incurred under the collaboration.
Capsida Biotherapeutics and Lilly subsidiary Prevail Therapeutics entered a multi-year strategic collaboration focused on delivering AAV gene therapy systemically to target the CNS while limiting exposure other organs. As part of the collaboration, Prevail will leverage Capsida’s novel AAV engineering platform to identify and advance clinically translatable capsids paired with Prevail’s cargo to develop best-in-class, IV-administered gene therapies directed to specified targets known to cause serious diseases that affect the central nervous system.
Capsida received $55 million consisting of an upfront payment and a commitment to participate in the company’s next financing round, plus the potential to receive up to $685 million in research and development and commercial milestones as well as tiered royalties. In addition, for one of the programs under the collaboration, Capsida will have an option to participate in development and commercialization in the United States in exchange for a gross margin share in that program. For all programs, Capsida will lead capsid discovery efforts using its high throughput AAV engineering and screening platform and Prevail will be responsible for preclinical and IND-enabling studies with therapeutic payloads.
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