The study, published in Drug Discovery Today, surveyed 43 professionals in venture capital and pharmaceutical business development to test whether their expectations matched published industry benchmarks.

A total of 84% of respondents underestimated rare-disease launch performance, even though evidence indicates that a majority of launches meet or exceed analyst expectations. Only 9% correctly identified the most common exit point, with most anchoring their expectations to acquisition patterns typical of treatments for prevalent diseases. More experienced respondents were more likely to give an estimate but were no more accurate than their less experienced peers.

According to the authors, this suggests that experience from the broader biopharmaceutical industry may not transfer well to rare-disease investing, which is shaped by distinct clinical, regulatory, and market dynamics.

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

Rare disease has its own investment dynamics, and conventional assumptions from broader biopharma do not necessarily apply.

Peter Wolpert, CEO of Industrifonden, says the findings matter for how capital is allocated. “Rare disease has its own investment dynamics, and conventional assumptions from broader biopharma do not necessarily apply.”