[January 13, 2022]

New Report Shows 28% Increase in YoY Funding for Rare Disease Drug Development in 2021

Global Genes, a leading rare disease organization, in collaboration with DealForma, today previewed new data and analysis on the state of investment in rare disease drug development. The findings, to be published in their entirety in Global Genes' NEXT 2022 report in February, indicate growing interest and sustained momentum toward investment in the rare disease space.

"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," said Craig Martin, CEO of Global Genes. "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."

Key topline findings are as follows:

• Rare disease therapeutic developers raised a total of $22.9 billion through public and private equity and debt financings in 2021. That grew 28 percent over the $18 billion raised in 2020.
• The rare disease therapeutic sector set a new record for venture capital financing as the sector raised a total of $8.8 billion, up from the $7.2 billion raised in 2020. In a reflection of the large amounts of capital available through venture financings a total of 29 of the rare disease rounds exceeded $100 million, up from 22 a year ago and just six in 2018.
• While the number of series A deals fell to 39 in 2021 from 45 a year ago, there continued to be a strong appetite for early-stage deals; rare disease drug developers raised $2.4 billion in series A financings in 2021, up from the $2.2 billion raised in series A financings for the same period a year ago. Overall, series A rounds accounted for 27.2% of the total venture capital raised by rare disease drug developers in 2021.
• The average venture funding for rare disease therapeutics developers reached $83.2 million in 2021, up from $74.7 million a year ago.
• While rare disease drug developer IPOs began the year on a record-setting pace, a shift in financial activity during the second half of the year derailed IPO activity for rare disease companies. In fact, IPOs were the one area that rare disease fundraising declined from a year ago. Overall, rare disease drug developers raised a total of $4.3 billion in 23 IPOs in 2021, down from $4.5 billion in 25 deals the previous year.
• A total of 17 of the rare disease IPOs were completed by June 30 and accounted for $3.4 billion or 79 percent of the total raised during the year. Average IPO deal sizes in the first half of the year totaled $200.2 million. That compared to an average of $108.7 for rare disease IPOs in the second half of 2021.
• Rare disease therapeutic developers were the subject of 48 M&A transactions, one less than in 2020. Of those, 32 deals had disclosed values totaling $53.2 billion, $49.4 billion of which was paid at closing. Rare disease transactions accounted for 29 percent of all biopharma therapeutic M&A deals and for 54 percent of all reported M&A deal values in 2021. Overall, the biopharma therapeutic sector saw 167 M&A transactions with a total value of $98.3 billion.
• Though M&A activity fell short of record levels in the absence of blockbuster transactions that bolstered the overall numbers in 2018, 2019, and 2020, acquisitions of rare disease drug developers dominated the largest M&A deals of the year. In all, rare disease M&A transactions accounted for 59.3 percent of all therapeutic M&A deal payouts in 2021, up from 22.8 percent excluding megadeals. In fact, seven of the ten largest transactions in 2021 involved rare disease companies as the target.
• The total value of partnering deals involving rare disease therapeutics rose in 2021 to a total potential value of $59.7 billion, up from $35.2 billion in 2020. The total disclosed value at closing rose to $4.8 billion, up from $4.5 billion in 2020. The total number of rare partnering deals totaled 180, up from 135 in 2020.

About Global Genes

Global Genes is a 501(c)(3) non-profit organization dedicated to eliminating the burdens and challenges of rare diseases for patients and families globally. In pursuit of our mission, we connect, empower, and inspire the rare disease community to stand up, stand out, and become more effective on their own behalf ?- helping to spur innovation, meet essential needs, build capacity and knowledge, and drive progress within and across rare diseases. We serve the more than 400 million people around the globe and nearly one in 10 Americans affected by rare diseases. If you or someone you love has a rare disease or are searching for a diagnosis, contact Global Genes at 949-248-RARE or visit our Resource Hub.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220112005794/en/

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