Investment for companies developing cell and gene therapies (CGTs) was discussed during the Genscript Biotech Global Forum London 2024 conference held on 20 November 2024. Following a sharp drop in CGT investment in 2022, trends suggest that CGT investment is currently undergoing a “renormalisation”. However, investors continue to be selective, said speakers Josh Resnik, senior managing director at RA Capital Management, and Ping Shek, managing director at Stifel’s Healthcare Investment Banking Division.
CGTs have faced challenges attracting investment due to the large amount of capital required to manufacture CGTs, as well as hurdles relating to reimbursement of one-off, high-cost therapies and patient access. Resnik noted that investor sentiment about CGTs was impacted by competitive pressures from “not-so-complicated biologics” such as antibody-drug conjugates, radiopharmaceuticals, and T-cell engagers in oncology and immunology.
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Resnik noted that CGTs must demonstrate a strong value proposition that is unable to be replicated by other drug modalities in order to secure sufficient venture financing. A recent example that was highlighted was AvenCell Therapeutics securing $112m in Series B financing in October 2024, led by Novo Holdings, towards its universal switchable chimeric antigen receptor-T-cell platform for the treatment of haematological malignancies and autoimmune diseases.
The importance of ongoing innovation in CGT manufacturing to reduce costs and accelerate timelines was a theme that was reiterated throughout the conference. Resnik noted that while breakthrough advancements in CGT manufacturing are uncertain, historical trends suggest that unit costs for drugs typically decrease over time as manufacturing efficiency improves with technological advancements, which has facilitated the commercial success of other biologics. Furthermore, the speakers emphasised the importance of risk reduction in positioning CGTs as being more attractive to investors, including managing chemistry, manufacturing, and controls complexities in CGT, as well as addressing challenges related to reimbursement, especially in the US, and improving patient access. At leading data and analytics company GlobalData’s Pharma Conference 2024: Cell & Gene Therapies: Current & Future Landscape webinar in November 2024, Sharon Cartic, director of Pharmaceutical Business Fundamentals at GlobalData, commented: “Currently, there are 594 venture capital-backed private companies with a cell or gene therapy innovator drug, out of which 221 have an innovator drug in the clinic, highlighting that venture financing is still required to support the high costs associated with CGT development.”
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