Global Genes, a rare disease advocacy organization, and DealForma, a biopharma database, published a new report on funding invested in rare disease drug development.
Strong Investor Activity Across the Board
According to the report, the rare disease business sector saw increased interest and funding in 2021. Craig Martin, CEO of Global Genes, said about the report:
“Rare diseases continue to have a strong allure to investors, as evidenced by the significant capital raised in 2021 to advance companies and pipelines focused on rare conditions.”
“We hope and expect that the sector will continue to be strengthened by the vast array of opportunities to advance promising biotechnologies, under expedited review, that can address the tremendous burdens and underlying causes of thousands of rare, genetic conditions currently without approved treatments,” he added.
Here are some of the most important findings outlined in the report:
Companies that develop rare disease treatments secured a total of $22.9 billion in public and private funding and debt financing in 2021, 28% more than $18 billion in 2020.
The rare disease drug development business sector has seen a record amount of venture capital deployed into the sector, raising a total of $8.8 billion, compared to $7.2 billion in 2020.
29 of the business funding rounds in the rare disease sector exceeded $100 million, up from 22 rounds in 2020.
There was a continued interest in providing funding for early-stage companies. Rare disease drug developers secured a total of $2.4 billion in Series A business funding rounds, compared to $2.2 billion in 2020. Moreover, Series A funding rounds represented more than 27% of the total VC raised by rare disease drugmakers.
Average venture capital (VC) funding raised by rare disease drugmakers stood at $83.2 million in 2021, compared to $74.7 million in 2020.
Initial public offering (IPO) activity in the rare disease space was significantly high at the start of 2021. However, this trend declined sharply in the second half of the year. Rare disease drugmakers secured a total of $4.3 billion across 23 IPOs in 2021, down from $4.5 billion a year ago.
17 IPOs raised by rare disease treatment developers were completed by June 30, representing 80% of the total IPO funding raised in 2021. In the first half of the year, the average IPO deal size stood at around $200 million, compared to an average of $108.7 in the second half.
Rare disease drug companies participated in a total of 48 M&A (mergers and acquisitions) deals in 2021, down from 49 in 2020. As many as 32 of those business deals totaled $53.2 billion, while the remaining 16 were undisclosed. Rare disease M&A deals constituted about 29% of all biopharma therapeutic M&A transactions and for 54% of all reported M&A deal values in 2021.
Global Genes and DealForma published new findings on funding activity in the rare disease drug space, indicating increased investor interest in 2021. Among other findings, rare disease drugmakers raised a total of $22.9 billion in public and private business funding in 2021, which represents an increase of 28% compared to 2020.