Rare disease biotech investment rises after PRV renewal

Investment in rare disease biotechs has increased since the US Food and Drug Administration’s Rare Pediatric Disease Priority Review Voucher (PRV) programme was signed back into law in February, according to SynaptixBio, the only company licensed to commercialise a treatment for the rare, deadly disease H-ABC, though the United States remains dominant.

The programme, which grants tradable vouchers to developers of rare paediatric disease treatments, will remain in place until it is reviewed again in September 2029. Vouchers have recently been sold for between $150 million and $200 million, and because a sale does not require the seller to issue new equity, PRVs are considered a prime source of non-dilutive capital.

VC firm V-Bio said: “Reauthorization of the FDA’s Rare Pediatric Disease Priority Review Voucher (PRV) scheme has restored financial certainty and sparked intense interest from large pharma.”

Dan Williams PhD, chief executive of 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.”

He 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.”

The Association of the British Pharmaceutical Industry warned last September that the UK was slipping in the global race for life sciences investment, with foreign direct investment 58 per cent below 2017 levels.

There are signs of recovery at home. Figures from data platform Tracxn show UK life sciences funding rose 228 per cent to $3.2 billion in the first half of 2026, although the money went to fewer companies.

Market analysis published by Schroders in April said: “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.”

Sergey Jakimov, founding partner at biotech VC firm LongeVC, told Cure: “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.”

The US has historically set the pace in rare disease drug development. The Orphan Drug Act of 1983 established incentives including market exclusivity, tax credits and support with getting into the clinic.

In the UK, the Medicines and Healthcare products Regulatory Agency published a draft rare disease therapies regulatory framework in May, designed to bring rare disease drugs to market more quickly. The consultation closed on 30 July.

Williams said: “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 selected its lead candidate drug, an antisense oligonucleotide, for clinical trials. The technology silences mutated genes to stop them forming toxic proteins without altering the gene itself.

Around 1 in 17 people will be affected by a rare disease during their lifetime, more than 3.5 million people in the UK, but only around 5 per cent of the c10,000 known rare diseases have an approved treatment. Around 80 per cent are caused by a mutation in a single gene, making them more suitable for targeted treatments such as gene silencing.

Amy Ingham

Amy Ingham is a reporter at Business Matters, covering UK business news with a focus on breaking news, business policy, late payments and insolvency. She joined the magazine in 2026 after completing the NCTJ Diploma in Journalism at Harlow College’s journalism school. Her recent reporting includes British Steel’s nationalisation and its impact on SME suppliers, the decline in late payments by large firms, and Insolvency Service director disqualifications. Reach her at aingham@cbmeg.co.uk.