We look into some of the top companies, investors, and acquirers focused on treatments for rare diseases, from immune system deficiencies to respiratory diseases.
Rare disease is becoming an increasing area of focus in the pharmaceutical industry, with a market size estimated to reach $169B by 2022.
Defined in the US as conditions affecting fewer than 200,000 people, rare diseases range from brain disorders to diseases affecting the skin, kidneys, and lungs.
In recent years, companies in this sector have received substantial valuations, with clinical-stage companies like Synageva and AveXis both being acquired for more than $8B (by Alexion Pharmaceuticals and Novartis, respectively).
Governments are also incentivizing companies to research these less-studied areas: receiving Orphan Drug Designation gives companies developing treatments for rare diseases a minimum of 7 years of market exclusivity in the US and 10 years in the EU. Additionally, the US provides a 50% tax credit on R&D expenses incurred investigating rare diseases.
We surfaced top startups, recently public or acquired companies, investors, and strategic acquirers in the rare disease space and sorted them across 11 therapeutic areas, ranging from cardiovascular to respiratory disease. Note that we do not include cancer-focused companies in the table below.
The table is not meant to be exhaustive of companies in the space. Categories are not mutually exclusive.
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NAVIGATING THE PERIODIC TABLE
The table lists active private and small-cap public companies developing treatments for rare diseases. Companies are arranged by development phase, with the latest-stage companies appearing first in each section.
On the righthand side, the green and light purple cells recepctively show the top VC/CVC investors and corporate strategic acquirers. The bottom section shows 20 of the largest acquired companies in the rare disease space since 2012.
Cardiovascular: Companies focused on rare diseases affecting the heart and cardiovascular pathway, such as pulmonary arterial hypertension (PAH), which results in the loss of some smaller blood cells in the pulmonary artery that carries blood from the heart to the lungs.
Northern Therapeutics is working on a cell and gene therapy to help repair and regenerate lung microcirculation damaged by PAH.
Central Nervous System (CNS): Companies treating neurological disorders that affect the brain and/or spinal cord. Diseases in this therapeutic area include mental health disorders like OCD, movement disorders like epilepsy, and neurodegenerative disorders like Parkinson’s and Alzheimer’s.
This is the largest category represented in this table, with 40 companies developing products across the rare CNS spectrum.
The only CNS-focused company in the table with a marketed product is Santhera. Its Idebenone product is approved as treatment for Duchenne muscular dystrophy, a degenerative muscle disorder affecting up to 1 in every 3,500 men.
Dermatology: Rare skin diseases include Epidermolysis bullosa (EB), which results in extremely fragile skin and affects about 200 children each year, and Sjogren-Larsson syndrome, characterized by dry, thickened skin, spastic movements, and intellectual and developmental disabilities.
Castle Creek Pharmaceuticals received FDA Fast Track Designation for its EB treatment CCP-020 in early August, giving the company the opportunity for priority review and more frequent FDA interaction. The company had previously received both Orphan Drug Designation and Rare Pediatric Disease eligibility, which, if the product is approved, would provide it with a priority review voucher which can be sold for upwards of $100M.
Endocrinology: The endocrine system includes all the glands in the body that produce hormones. Rare endocrine diseases include congenital adrenal hyperplasia (CAH), a group of genetic disorders that limit hormone production in the adrenal glands.
One company exploring rare endocrine diseases is Spruce Biosciences. The company has raised $20M from Novo Holdings and RiverVest Venture Partners to advance its lead CAH treatment, SPR001, to a Phase II trial.
Hematology: Five companies on the periodic table — Ebelle D’Ebelle Pharmaceuticals, Emmaus Life Sciences, Imara, Modus Therapeutics, and Prolong Pharmaceuticals — are developing products for one of the more-known of the 100+ rare blood diseases: sickle cell disease.
Ebelle D’Ebelle is the furthest along, with a new drug application filed. In 2016, Imara (Phase IIa) raised a $31M Series A from NEA and Bay City Capital, among others.
Hepatology: Companies here are focused on rare diseases of the liver, gallbladder, and pancreas, such as autoimmune pancreatitis and Wilson’s Disease.
Wilson’s Disease affects roughly 1 in 30,000 people worldwide and causes a buildup of copper in the liver. Kadmon has filed for an Abbreviated New Drug Application for its Wilson’s disease product, KD034. The company can undergo a shortened approval process because its candidate is a generic version of drug that has already been approved.
Immunology: Diseases that lead to immune system deficiencies. Many of these are autoimmune diseases, where the immune system attacks itself.
Orchard Therapeutics, the only immunology-focused company featured on the table, is a gene therapy company. In April, Orchard acquired GlaxoSmithKlein’s rare disease portfolio for a 19.9% equity stake in the company. Orchard went on to raise $150M from notable investors Deerfield, RA Capital and Venrock to further develop its clinical and preclinical candidates.
Metabolic: Metabolic disorders, usually caused by a defective gene, affect the body’s ability to convert or use energy.
Two companies in the table are focusing on treatments for Fabry Disease, a lysosomal storage disorder. Avrobio is utilizing a gene therapy approach to potentially cure Fabry Disease in a single dose, while Greenovation’s MOSS-AGAL, which was proven safe and showed preliminary efficacy in a Phase I trial, is produced using genetically modified moss.
Nephrology: Companies here focus on kidney diseases, some of which can require dialysis or kidney transplantation.
Oxthera has raised $53M in total disclosed funding to develop therapies for hyperoxaluria, a rare genetic disorder that can cause kidney stones and currently has no approved therapies. Three other companies — Aurinia, Complexa, and Sarfez — are investigating treatments for focal segmental glomerulosclerosis, a rare kidney disease.
Ophthalmology: Rare eye diseases can lead to excess pressure in the eye, damaged eye tissue, and varying levels of blindness.
AGTC has partnered with Biogen to investigate retinitis pigmentosa, which damages cells in the back of the eye and can result in total blindness. Eyevensys is developing a platform of eye products, initially targeting non-infectious uveitis, which is the inflammation of the uvea.
Respiratory: Companies here focus on rare diseases related to the lungs and breathing.
The most-investigated rare respiratory disease studied by companies in the periodic table is cystic fibrosis, an inherited disorder that causes a buildup of mucus in the lungs and other organs. Six companies pictured here — Savara, Celtaxsys, Spyryx Biosciences, Corbus Pharmaceuticals, Proteostasis Therapeutics, and ProQR Therapeutics — have products in development, with Savara (Phase III) the most advanced.
Most active investors: These investors have backed the most companies in the periodic table since 2012.
Venture capital firm New Enterprise Associates is the most active investor overall, with investments into 9 companies on the periodic table, followed by Cormorant Asset Management (5). Top corporate venture capital firms include Novartis Venture Funds (5 investments) and Johnson & Johnson Innovation (3).
Corporations: Corporates making acquisitions and investments in rare diseases treatment (through means other than formal CVC arms) include American pharmaceutical corporation Pfizer and Swiss healthcare company Novartis.
Exits: The bottom section of the table highlights the most valuable M&A deals in the space since 2012.