Investment in rare disease biotechs has increased following renewal of the FDA’s Priority Review Voucher (PRV) program, but the US remains dominant, says Dan Williams, CEO, SynaptixBio.
In February this year the PRV program was signed into law and will remain in place until reviewed again in September 2029.
According to VC firm V-Bio, “Reauthorization of the FDA’s Rare Pediatric Disease Priority Review Voucher (PRV) scheme has restored financial certainty and sparked intense interest from large pharma.”
PRVs are viewed as 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 rare disease biotech SynaptixBio, said; “The US dominates because the PRV program 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 $150m to $200m.
Dan 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 program, 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, ‘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’.
In an article in Cure, Sergey Jakimov, founding partner at specialist biotech VC firm LongeVC, said “Orphan therapies are already projected to be roughly a fifth of global prescription revenue.
“Pharma needs de-risked, clinically validated assets, and rare disease programs tend to show up better in diligence—clearer endpoints, smaller trials, engaged patient communities, and a higher likelihood of approval from Phase I.”
Jakimov added; “You usually know the gene, you know the protein, and you know the patient.
“When a modality finally catches up to the biology, such as AAV gene therapy, ASOs, siRNA, base and prime editing — you can move from target ID to a clinical hypothesis in a shorter time span.”
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.
Dan 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 1 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.
To find out more about SynaptixBio please visit www.synaptixbio.com.
