Investment in rare disease BioTechs has increased following renewal of the FDA’s Priority Review Voucher (PRV) programme, according to SynaptixBio, but the United States remains dominant compared to the UK.
In February this year the PRV programme was signed into law and will remain in place until reviewed again in September 2029.
According to VC firm, V-Bio, “Reauthorisation of the FDA’s Rare Paediatric Disease Priority Review Voucher (PRV) scheme has restored financial certainty and sparked intense interest from large pharma.”
PRVs are considered to be a prime source of non-dilutive capital. When a PRV is sold, the cash generated does not require the seller to issue new equity.
Dan Williams PhD, CEO at leading rare disease BioTech, SynaptixBio, said: “The US dominates because the PRV programme creates a highly valuable and, more importantly, tradable asset.
“VCs and private equity firms are far more willing to invest in rare disease BioTechs simply because they provide a financial return on investment.”
PRVs have been sold recently for between US$150 million to US$200 million.
Williams added: “While the UK is known for high-quality science and innovation, it has seen a sharp contraction in BioTech fundraising. Without an equivalent to the FDA PRV programme, UK rare disease BioTechs rely heavily on public markets, private investment or acquisition by larger global pharma to secure capital. “
According to market analysis by Schroder’s, from April this year, “With public markets grappling with valuation volatility, the UK’s ‘golden triangle’ of innovation – spanning London, Oxford, and Cambridge – continues to produce the next generation of BioTech champions.
“Historically, the UK’s Achilles’ heel has been the ‘Valley of Death’ – the gap between brilliant seed-stage science and the massive capital required for clinical trials. Too often, UK companies were forced to list in New York just to access the depth of capital needed to scale.”
Historically, it has been the US that has set the pace in rare disease drug design and development, creating incentives that make it very attractive for smaller BioTechs who typically focus on addressing a single disease.
The Orphan Drug Act of 1980 set out a range of incentives that includes market exclusivity, tax credits and support with getting into the clinic.
In the UK, the Medicines & Healthcare Regulatory Agency (MHRA) is consulting on a new regulatory framework for bringing rare disease drugs more quickly to market.
Williams concluded: “It would be ideal if the UK could introduce a scheme similar to the PRV. With the proposed new framework we have everything in place to better manage the clinical trial and marketing authorisation process for rare disease therapies, but it stops there.
“Reducing regulatory and approvals timescales and costs can only be good for rare disease patients and their families, but adding this stronger incentive could transform the industry, making the UK a leading player in research and development in this key area.
“We still aim to conduct clinical trials in the UK, using the results to inform further trials in the US, but this all depends on raising further investment.”
SynaptixBio last year chose its lead candidate drug, an antisense oligonucleotide (ASO), for taking forward into clinical trials; ASOs are a form of gene silencing technology, they stop mutated genes forming toxic proteins. Critically, they don’t alter the gene itself.
Around one in 17 people will be affected by a rare disease during their lifetime. In the UK, this amounts to over 3.5 million people, but only around 5% of rare diseases have an approved treatment. The vast majority of the c10,000 known rare diseases have no effective therapy.
Around 80% of rare diseases are monogenic, caused by a mutation in a single gene, which makes them more suitable for highly targeted treatments such as gene silencing.
