Rare disease has always been part of our thesis. It is not a new investment area for us. What has changed is the set of enabling conditions that make specific programs — particularly enzyme replacement therapies and next-generation ERT platforms — more compelling now than they were in the 2018-2020 period.
The basic investment logic for rare disease has always been sound: defined patient populations with understood natural history, high willingness-to-pay from payers who have few therapeutic alternatives, and regulatory pathways with accelerated designations that can compress development timelines. What made rare disease frustrating for investors historically was the execution difficulty — running adequate clinical trials in populations of 1,000-50,000 patients globally, getting enrollment to work, and navigating endpoints that regulators would accept.
Several of those constraints have meaningfully improved.
Natural History Data Is Finally Adequate
One of the persistent frustrations in rare disease drug development has been the quality of natural history data. To run a meaningful single-arm study or an accelerated approval program, you need to know what the untreated disease progression looks like — and for many rare diseases, that data has historically been sparse, collected retrospectively, and not collected in ways that map cleanly to the endpoints regulators want to see.
That has changed substantially over the last five years. Patient registries have matured for many of the most investable rare disease indications. Disease-specific natural history consortia have been running prospective observation programs long enough to have meaningful longitudinal data. Several academic medical centers with rare disease expertise have formalized biomarker collection alongside standard of care that gives companies access to natural history datasets that simply did not exist in 2018.
For enzyme replacement therapies specifically, which are often targeting lysosomal storage disorders with well-characterized biochemical disease markers, the combination of mature patient registries and validated biomarkers creates a development context that is substantially more tractable than it was five to eight years ago.
Natural history data is the unsung asset in rare disease. Companies that have it — through academic partnerships, patient advocacy collaborations, or their own registry investments — have a genuine informational advantage that reduces trial execution risk in ways that are hard to price from the outside.
Platform ERT Technologies Are Changing the Economics
Traditional enzyme replacement therapy has been limited by two recurring problems: immunogenicity and the need to re-engineer the manufacturing process essentially from scratch for each new enzyme. Both constrain the economics of the space in ways that make it difficult to build multi-program companies without very large capital bases.
Next-generation ERT platforms are attacking both problems. Glycoengineering approaches that reduce immunogenicity have shown promise in clinical programs, with some platforms demonstrating the ability to extend dosing intervals from weekly to monthly — a change that matters both for patient quality of life and for manufacturing economics. Mannose-6-phosphate receptor targeting improvements have expanded the range of enzyme products that can achieve adequate lysosomal delivery. And fusion protein platforms that combine enzyme payloads with targeting moieties are opening up enzyme delivery to tissue compartments, particularly the CNS, that were previously inaccessible.
The platform dimension matters because it changes the capital efficiency calculation. If a single platform can support multiple enzyme programs with shared manufacturing infrastructure and overlapping clinical development approaches, the cost per program drops materially compared to building each enzyme therapy independently.
Regulatory Tailwinds Are Real
The FDA's rare disease programs have become meaningfully more helpful over the last few years. The STAMP (Structured Approach to Milestone Programs) initiative has improved interaction quality for early-stage rare disease programs. The expansion of accelerated approval use in rare disease has given developers a more navigable path to initial approval on biomarker endpoints, with post-marketing confirmation requirements that are more clearly defined than they were historically.
The EMA's experience with adaptive pathways and conditional marketing authorizations for rare disease has also created a more predictable European development context. For programs with genuine unmet need and adequate patient identification, the regulatory environment is as favorable as it has been in the thirty-year history of the Orphan Drug Act.
Where We Are Looking
Our focus within rare disease has narrowed to a few specific areas where we think the convergence of better natural history data, improved platform technologies, and favorable regulatory context is most pronounced.
Lysosomal storage disorders with CNS involvement are a priority area. The clinical need is high, the patient populations are well characterized, and the technical challenge of CNS delivery — which has historically been the limiting factor in this category — is being addressed by multiple credible approaches. Companies that have cracked delivery to the CNS for a specific enzyme, with validated biodistribution data in relevant animal models, are in a different position than where the field was even three years ago.
Metabolic rare diseases where there is a clear enzymatic defect, an established biomarker that correlates with clinical outcomes, and an existing natural history registry are the most de-risked development contexts we see. They are not the most exciting stories at the pitch stage, but they are the programs most likely to reach approval on disciplined timelines. That matters for a fund with specific return requirements.
The window for rare disease investment is not unlimited. As more programs advance, patient populations become more competitive, and the natural history datasets that are currently a differentiating advantage become more broadly available. The companies building now, with access to the right patient networks and the right platform technologies, have a timing advantage. We intend to use it.
