In our Healthcare & Lifesciences Report 2026 we called rare diseases one of the most strategically attractive areas for biopharma M&A. 10 months into 2026, we look at the fundamentals, the pipeline, how commercial conditions differ across regions, and how our view has held up against the year’s deals.
Key Takeaways
- Rare disease remains one of the most attractive areas for biopharma M&A: confirmed.
Around 15 takeovers of companies focused on rare diseases have been announced since January, each worth USD 0.5–10bn. They include Vertex – Crinetics (~USD 10bn), Biogen – Apellis (USD 5.6bn), Angelini – Catalyst (~USD 4.1bn), Neurocrine – Soleno (~USD 2.9bn), Servier – Edgewise’s muscular dystrophy business (up to USD 2.65bn) and Shionogi – IntraBio (USD 2bn). Novartis also closed its USD 12bn Avidity acquisition in March, however the del-desiran (DM1)’s Phase 3 HARBOR study missing its primary endpoint resulted in harsh reactions of investors. The strategic distribution and commercialization area also witnessed significant M&A activities illustrated by DKSH’s acquisition (USD 390m) of NewBridge Pharmaceuticals, a leading healthcare commercialization platform for specialty and rare disease medicines in the MENA region. - Buyers target companies with their own lead assets, holding orphan drug status: confirmed.
Most targets already had an approved drug or one close to approval, viewed as a capital-efficient innovation. Shionogi signed for IntraBio days after its drug became the first approved treatment for ataxia-telangiectasia. Apellis and Catalyst brought marketed drugs with existing sales, so buyers gain revenue immediately. - Deal sizes in line with 2025 (EUR 0.25–10.9bn): confirmed.
The market is still made up of many mid-sized deals, with no deal comparable to Amgen–Horizon (USD 28bn). Deals cluster in neuromuscular and neurological disorders, rare endocrine disorders, myelofibrosis and complement-driven diseases. - Premium pricing and policy protection: confirmed and extended. Orphan drugs are now excluded from Medicare price negotiation even when they have several orphan indications, and they qualify for a zero US tariff rate.
- The growth advantage will narrow and competition will rise: too early to judge.
Valuations show no strain yet: Biogen paid an 86% premium over Apellis’ 90-day average share price. More bidders competing for the same small pool of assets is the first sign of the more competitive market we expected. The FDA calendar also brings new competitors into established franchises.
Why rare diseases attract buyers
- Large unmet need.
There are around 10,000 known rare diseases, and about 95% have no approved treatment. Rare-disease drugs are expected to reach roughly 20% of global prescription drug sales by 2030, about double their share a decade earlier. - Clearer science.
About 75% of rare diseases are caused by a single gene. That links the drug target directly to the clinical outcome and improves the odds of success in development. - Faster, cheaper development.
Special regulatory pathways typically need about 60% fewer trial patients. Around 40% of 2025 EMA approvals were orphan-related. - Strong economics.
Orphan drugs cost on average about USD 400k a year, against about USD 300k for non-rare oncology drugs and USD 50k for non-rare immunology drugs. Limited competition keeps commercialisation costs low
Remaining challenges
US-first strategy and a gap in international planning: Biotech leaderships focus on FDA approval and the US market. When they recruit patients abroad, they still design trials for the US FDA rather than for ex-US bodies, and plan launches internationally late – usually limited to larger EU markets. US MFN pricing adds uncertainty, though orphan-only drugs are largely exempt so far. Licensing rights elsewhere represents an opportunity for (ultra) rare disease commercialization platform with established teams in high prevalence countries.
Patient identification and late diagnosis: Patients often wait years for a correct diagnosis, because general practitioners know little about these conditions and genetic testing and pediatric screening are unevenly available.
Unequal access: access and reimbursement vary widely and patients often depend on early-access or named-patient programmes which are fragmented and differ from country to country.
Rare-disease commercialization requires specialised teams, close ties with patient groups and centres of expertise, and negotiations often patient by patient.
A deep, maturing pipeline
- Size. Rare-disease drugs make up almost 30% of all pharma pipelines.
Rare-disease studies accounted for nearly half of all clinical trials started in 2024, against just over a third in 2015. About 70% of that trial activity is in rare cancers.
- Untapped potential.
Since 1983, around 4,700 drugs have received a US orphan designation, but only about 700 (around 15%) have reached an orphan approval. That leaves a large pool of programmes still in development.
- Regulatory output: a strong record, a softer 2026 so far.
Orphan drugs have become the largest category of new FDA approvals. 26 of the 50 novel drugs approved in 2024 (52%) and 25 of 46 in 2025 (54%) carried orphan designation, above the 35–50% range seen earlier. The first half of 2026 was weaker: of the 26 novel drugs approved, only six were for orphan indications, according to industry tallies. Notable rare-disease approvals this year include treatments for Hunter syndrome, Menkes disease, arginase 1 deficiency and ataxia-telangiectasia. We see the dip as a matter of timing rather than a change in trend, because rare-disease decisions are heavily concentrated in the fourth quarter. The FDA’s official 2026 orphan figures are due in January 2027. Evaluate still expects orphan drug sales to exceed USD 400bn by 2032, over 21% of global prescription sales.
- A busy approval calendar.
More than 25 FDA decisions on rare-disease drugs are scheduled between late October 2026 and February 2027. Several will test the value of recent acquisitions:
- Anito-cel (Gilead/Arcellx), multiple myeloma, 23 December. A next-generation CAR-T therapy and the first approval test for an asset bought in 2026 (USD 7.8bn).
- Povetacicept (Vertex), IgA nephropathy, 30 November. Gained through Vertex’s acquisition of Alpine, and a sizeable entry into one of the largest rare kidney markets.
- Duchenne muscular dystrophy: Dyne (21 January 2027) and Capricor (22 November). Dyne uses the same technology as Avidity, which Novartis bought for USD 12bn. A positive decision would support that valuation and add competition.
- Bezuclastinib (Cogent), systemic mastocytosis, 30 December. A direct challenger to the drug behind Sanofi’s USD 9.5bn Blueprint acquisition.
- First-ever therapies: BridgeBio’s BBP-418 for limb-girdle muscular dystrophy (27 November), Sanofi’s venglustat for neurological Gaucher disease (25 November) and Praxis’ relutrigine for severe genetic epilepsies (27 December).
- Competition for established drugs: BridgeBio’s oral infigratinib (4 February 2027) would compete with BioMarin’s daily-injection Voxzogo in achondroplasia.
Each positive decision creates a new commercial-stage asset, the type of target buyers have favoured this year. The coming months could feed the next round of rare-disease M&A.
One drug, three commercial realities
United States: the profit pool, and better protected than before
- Pricing and launch: prices are set freely at launch and reimbursement is fast. The US generates the majority of global orphan-drug revenue.
- Medicare negotiation: under the One Big Beautiful Bill Act (July 2025), drugs with one or more orphan designations are excluded from Medicare price negotiation. The clock starts only once a drug gains a non-orphan approval, which rewards companies that pursue several rare-disease indications.
- Tariffs: orphan drugs qualify for a zero rate under the 2026 tariff guidance.
European Union: protected on paper, slower in practice
- Exclusivity is getting shorter. The EU pharmaceutical package agreed in 2026 cuts standard orphan market exclusivity from 10 to 9 years. Products for diseases with no satisfactory treatment get 11 years, and exclusivity now applies per product rather than per indication. The changes apply from around 2028 and do not affect existing approvals.
- Access remains slow and uneven. Across all innovative medicines, the median time from approval to patient availability is 532 days, ranging from 56 days in Germany to over 1,200 days in Romania. Only 28% of new medicines are fully reimbursed across Europe.
- Launches are being postponed. Under US “most favoured nation” (MFN) pricing, a low European price can become the US benchmark, and the EU’s new Joint Clinical Assessment adds evidence requirements. One study found about 38% fewer launches in the EU states facing both pressures. Orphan cancer drugs and advanced therapies fell about 23%. All rare-disease drugs come under the Joint Clinical Assessment in 2028.
Emerging markets: small today, growing unevenly
Public reimbursement for high-cost orphan drugs is limited. Access often runs through early-access and named-patient programmes, special funds or court-ordered access, and commercialisation usually goes through regional partners.
- Central and Eastern Europe: EU approval applies, but on average only about a third of EU orphan drugs are reimbursed. The rate ranges from under 20% in Estonia to around 50% in Hungary and Czechia. Hungary and Slovakia accept higher cost-effectiveness thresholds for orphan drugs. The region is attractive for patient recruitment and as a later EU launch wave.
- Russia: a state-backed fund (Circle of Kindness) finances orphan drugs for children, including unregistered drugs. Adult access depends on regional budgets. Medicines are exempt from sanctions, but many Western companies have halted new investment. For most acquirers, Russia is a market they keep supplying rather than one they invest in.
- CIS / Eurasian Economic Union: there is no shared orphan framework. Russia lists 294 orphan diseases, Belarus 151 and Kazakhstan about 70, while some members have no list at all. Registration has to be handled country by country.
- Turkey: market entry often lags Western Europe by years, but approved orphan drugs can be reimbursed quickly (191 days for one recent SMA drug, faster than the UK, Italy or Spain). Prices are referenced to Europe but converted at a fixed exchange rate below the market rate, which squeezes margins.
- Saudi Arabia and the Gulf: a growing priority market. Genetic disorders are more common than average, the payer is willing to pay and procurement is centralised. In 2026 the Saudi FDA launched an accelerated rare-disease pathway (NADR) open to drugs already approved elsewhere. Local manufacturing commitments increasingly shape market access. The Gulf is often now an early launch market after the US and EU.
Michel Le Bars, Sector Lead Healthcare & Lifesciences: “Valuations are anchored on US revenue. For European biotechs, a credible US launch plan is now central to valuation. Ex-US rights, especially for emerging markets, are increasingly carved out and licensed separately. And because of MFN pricing, the order of European launches has become a question for the deal itself."
Conclusion
Our view?
The fundamentals are intact: high unmet need, efficient development, strong US pricing power and added policy protection. A deep pipeline and a dense FDA calendar into early 2027 should keep producing new commercial-stage targets. We expect rare disease to remain a core M&A theme into 2027. Commercial conditions are diverging: the US is better protected, Europe is slower and shortening exclusivity, and emerging markets need tailored, partner-led approaches. Each asset’s value therefore depends increasingly on its regional strategy. Sellers with approved or late-stage orphan drugs face an open, competitive market. Preparing clinical, regulatory and commercial data early, setting out a clear US and international plan, and engaging a broad set of buyers including mid-size specialists will be key to getting full value.
What we did not fully anticipate?
The buyer base has broadened. Mid-size European companies have been among the most active buyers. Many are building dedicated rare-disease franchises with a US commercial presence, often by buying it outright. For European biotechs, this means more potential buyers and more competitive sale processes.
Read the report: Healthcare & Lifesciences Report 2026 – M&A Insights and Outlook
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