Rare Partnering Slows in 2020, but Deal Values Grow

With capital markets a welcoming source of cash, rare disease partnering activity fell 5.9 percent to $4.5 billion at signing from $4.8 billion at signing in 2019. The number of rare disease therapeutics partnering deals with disclosed values fell to 48 in 2020 from 65, but deal values grew richer. The median upfront cash and R&D funding in partnering rose to $40 million in 2020. That compared to median upfront cash and R&D funding value of $30 million in 2019. Partnering activity for all biotherapeutics deals rose 19.7 percent to $18 billion from $15.1 billion the previous year.

Total potential deal value for rare disease partnerships rose to $35.2 billion, a 10.1 percent increase from the $32 billion in partnering deals in 2019. That was a smaller increase than the 37.3 percent in potential deal value for all therapeutics partnering deals in 2020, up from $111.3 billion in 2019. The total number of rare disease partnerships fell to 135 from 192 the previous year. Of the 48 deals with disclosed upfront payments, ten included the sale of equity. That compared to 65 deals with disclosed values the previous year in which 8 included the sale of equity.

Despite the drop in partnering activity, the average upfront payments (including R&D funding) rose to a median of $40 million, a 33 percent increase over the $30 million median upfront payment in 2019, and more than twice the $19 million companies secured through partnerships in 2018. The average total potential deal value grew to $734.9 million, up from $492.4 million in 2019 and continued the upward trend from $308.6 million in 2018.

Takeda was among the most active drug companies on the partnering front, entering seven rare disease therapeutics collaborations in 2020. These included an agreement with Carmine Therapeutics worth up to $900 million to discover, develop, and commercialize non-viral gene therapies for two rare disease targets using the company’s platform technology based on red blood cell extracellular vesicles. As part of the agreement, Takeda committed a $5 million convertible loan to support development of Carmine’s platform technology.

Takeda also entered into an agreement with Evox Therapeutics covering up to five novel protein replacement and mRNA therapies for rare diseases including Evox’s preclinical program in the rare lysosomal storage disorder Neimann-Pick type C disease. Takeda paid $44 million upfront and committed to milestones of up to $838 million.

Sarepta Therapeutics was also active on the partnering front, completing five deals in 2020. The largest of these involved an exclusive global license to develop and promote Hansa Biopharma’s imlifidase as a pre-treatment for gene therapy in Duchenne and limb-gridle muscular dystrophy patients who have pre-existing antibodies to adeno-associated viruses, which are used as vectors for gene therapies. Sarepta paid Hansa $10 million up front and will pay up to an additional $397.5 million in milestones in addition to tiered royalties in the mid-teens on incremental gene therapy sales that arise from treating antibody positive patients enabled through imilfidase pre-treatment.

Other companies that were involved in substantial partnering activity include Moderna, which entered into separate agreements with Vertex focused on genetic therapies for cystic fibrosis, and with Chiesi Farmaceutical focused on mRNA therapies for rare diseases. The three-year collaboration with Vertex provided Moderna with $75 million upfront and up to $38 million in milestones plus tiered royalties on any products that result from the collaboration. The Chiesi agreement, which provided a $25 million up front and more than $400 million in milestones and double-digit royalties on sales, is focused on pulmonary arterial hypertension, a rare and progressive disorder characterized by high blood pressure in the arteries of the lungs with concomitant heart failure.

OVERVIEW
VENTURE FUNDINGS
IPOS
PUBLIC DEBT AND EQUITY
PARTNERING
M&A