From Niche to Notable: Rare Diseases Reshape Biotech

Approval of elamipretide and Mirum Pharma deal point to growing investor interest in high-need therapies with small patient populations

20 Sep 2025

A series of advances in rare disease treatments is reshaping parts of the biotech industry, drawing renewed investor interest and encouraging companies to move earlier into markets once seen as marginal.

The approval of elamipretide for Barth syndrome has become one of the most closely watched regulatory decisions of the year. It marks the first approved therapy for the life-threatening genetic condition and is being widely read as a signal that regulators are more open to approving medicines for very small patient populations.

Elamipretide, which aims to improve energy production within cells, was cleared on the basis of limited clinical data. For many in the sector, that decision reflects a shift in how the US Food and Drug Administration weighs evidence in areas of high unmet need. “This is a field that has struggled for decades, and now we are finally seeing real movement,” said one industry analyst.

The regulatory milestone has been followed by a rise in dealmaking. Mirum Pharma has recently acquired a therapy targeting chronic hepatitis D, underlining a broader push by mid-sized biotech groups to assemble portfolios focused on rare and underserved diseases.

Such transactions suggest that companies are increasingly willing to invest before late-stage trial results, betting that early entry will secure long-term advantages in markets with limited competition. Analysts say rare disease assets, once viewed as high risk, are now attracting capital because of clearer regulatory pathways and the potential for durable pricing power.

The momentum does not remove long-standing challenges. Small trials, high development costs and the need to demonstrate lasting safety and effectiveness continue to pose risks for developers. Regulators and patient groups are also expected to scrutinise how benefits seen in tightly controlled studies translate into real-world use.

Even so, the outlook for the segment has brightened. Increased collaboration between researchers, patient organisations and drugmakers is helping to accelerate development timelines and refine trial design.

If current trends persist, rare disease therapies are likely to play a larger role in shaping biotech investment and strategy. For conditions long overlooked by large pharmaceutical groups, the coming years may offer opportunities that previously appeared out of reach.