New Research Highlights Gaps in How Investors Assess Rare-Disease Opportunities

New research co-authored by Jonathan Ilicki, MD MBA, Life Science Strategy Lead at Industrifonden, highlights gaps between how investment and business-development professionals perceive rare-disease opportunities and what published evidence suggests.

In the study, published in Drug Discovery Today, the authors surveyed 43 professionals working across venture capital and pharmaceutical business development to examine whether practitioners’ expectations around rare-disease assets align with established industry benchmarks.

The findings point to consistent miscalibration in several areas of rare-disease investing. Respondents frequently underestimated commercial launch performance and showed limited accuracy when assessing when rare-disease assets are most commonly acquired.

“Investment decisions are ultimately shaped by the underlying assumptions we have about an opportunity,” said Ilicki. “If those assumptions systematically differ from reality, investors risk making less accurate decisions and missing opportunities that they otherwise would have acted on.”

Key findings

• 84% underestimated launch performance. Respondents estimated rare-disease launch performance below published benchmarks, despite evidence indicating that a majority of launches meet or exceed analyst expectations.
• Only 9% correctly identified the most common exit point. Most respondents anchored their expectations to acquisition patterns more commonly associated with treatments for prevalent diseases.
• Experience did not translate into greater accuracy. More experienced practitioners were more likely to give an estimate, without demonstrating greater accuracy than less experienced respondents.

The findings suggest that experience developed across the broader biopharmaceutical industry may not always transfer effectively to rare-disease investment decisions. Rare-disease development and commercialization are shaped by distinct clinical, regulatory and market dynamics, which can affect both development outcomes and acquisition patterns.

For investors, the implications extend beyond individual assumptions. Miscalibration can influence how opportunities are assessed, how risk is priced and ultimately where capital is allocated.

“Rare disease has its own investment dynamics, and conventional assumptions from broader biopharma do not necessarily apply,” said Peter Wolpert, CEO of Industrifonden. “At Industrifonden, we believe that investment decisions should be grounded in evidence and continuously challenged as we learn more. Research like this helps strengthen how we think about the opportunities and risks in an area where better capital allocation can ultimately contribute to bringing important treatments to patients.”

The study draws on behavioural decision science to explore why experienced professionals may systematically misjudge certain aspects of rare-disease investing. By comparing practitioner expectations with published benchmarks, the research provides a framework for identifying where intuition and established industry assumptions may diverge from observed outcomes.

Read the full article here.