Rare Disease Therapeutics M&A Tops $29 Billion in Third Quarter of 2021

Marie Daghlian

Big Pharma’s appetite for rare disease drug developers drove strong M&A activity in the third quarter of 2021 with $29.3 billion in total disclosed deal values, according to data collected by DealForma and Global Genes.

The values, which are up 241 percent compared to the same period in 2021, were bolstered by six transactions during the quarter valued at more than $1 billion each in which Big Pharma staked a foothold in the rare disease space, including deals by Merck, Sanofi, Pfizer, and Novo Nordisk.

September M&A added $22.4 billion in total disclosed deal values, capped by Merck’s announcement that it would take a significant step into the rare disease space through the acquisition of Acceleron for $11.5 billion. The deal will give it the late-stage candidate sotatercept, an add-on therapy for pulmonary arterial hypertension, and the marketed drug Reblozyl for the treatment of anemia of certain rare blood disorders.

Sanofi, which paid $3.2 billion to acquire mRNA drug developer Translate Bio for its clinical stage pipeline in cystic fibrosis and other rare pulmonary diseases in August, shelled out $1.9 billion in September to acquire Kadmon Holdings, immediately adding an approved therapy for chronic graft-versus-host disease to its portfolio.

In another notable M&A transaction in September, Swedish Orphan Biovitrum went private in an $8 billion takeover by a consortium of global private equity firms.

Total disclosed deal values for rare disease therapeutics focused partnering activity year to date is up 17.5 percent compared to the same period in 2020. In the largest deal, Syndax Pharmaceuticals granted Incyte exclusive, worldwide rights to develop and commercialize Syndax’s anti-CSF-1R monoclonal antibody, axatilimab for the treatment of chronic graft-versus-host disease and other fibrotic diseases. The deal, valued at up to $602 million, included an upfront payment of $117 million in cash, $35 million in an equity investment, up to $450M in regulatory, development, and commercial milestones, plus undisclosed double-digit royalties on ex-U.S. sales.

September saw no IPOs of rare disease drug developers, which have slowed for therapeutics companies in general. IPOs of rare disease drug developers, While 17 rare disease focused companies completed initial public offerings that raised $3.4 billion during the first half of 2021, just three companies completing IPOs in the third quarter, raising $422 million.

Venture and private financing, however, has continued apace with a total of $7.9 billion raised through the first three quarters of 2021, up 47.6 percent compared to the same period in 2020, and comprising more than a quarter of the $28.7 billion raised by drug developers so far this year. Investors remain highly confident about precision medicines genetic therapies and the technologies in development to make them happen, including gene and cell therapies, gene editing, RNA-based therapies, and novel modes of delivery to enable them.

Attralus closed a $116 million series B financing to advance a pipeline focused on treatments for systemic amyloidosis, a diverse group of rare diseases that occur due to accumulation of toxic amyloid deposits in tissues and organs, a consequence of aberrant protein misfolding events. The company’s pan-amyloid removal (PAR) therapeutics are peptide drugs designed to directly bind to and remove toxic amyloid in organs and tissues. Attralus will use proceeds from the financing will be used to advance its first PAR candidate into clinical trials.

AAV-mediated gene therapy focused Lexeo Therapeutics closed a $100 million series B financing to support the development an expanded pipeline that includes an IV-administered gene therapy for cardiomyopathy associated with Friedreich’s ataxia, a central nervous system-administered gene therapy for CLN2 Batten disease, and a CNS-administered gene therapy for APOE4-associated Alzheimer’s disease.

Disc Medicine, a clinical-stage biotech developing therapies to treat rare and more prevalent hematologic diseases, closed a $90 million series B financing to advance the development of a pipeline that includes conducting a phase 2 study of its lead program bitopertin, an oral, clinical-stage GlyT1 inhibitor with potential to become the first disease-modifying treatment for erythropoietic porphyrias, a family of rare and debilitating genetic disorders caused by dysregulated heme synthesis.

ADARx Pharmaceuticals closed a $75 million series B financing to advance its drug development pipeline of RNA targeting therapeutics that includes RNA platform technologies for base editing, inhibition, degradation, and delivery, and to transition ADARx’s pipeline of nine research phase products into the clinic.