Cell and Gene Therapy – The Next Frontier in Lifesciences

In this era of rapid scientific and technological advancements, we are at the precipice of a healthcare revolution. Cell and Gene therapy (CGT), pioneering treatments that leverage our own biology, are poised to challenge traditional healthcare frameworks. CGT has been witnessing an expanding total addressable market and is expected to grow exponentially. However, the potential gains are not merely financial. Investments in this growing field also help propel the momentum of scientific and medical progress, funding vital research that brings us closer to a more efficient, personalized, and holistic healthcare future. This article attempts to present the current and future landscape of CGT, with a focus on the clinical pipeline evolution, strategic collaborations, and financing and investment environment globally.

How has cell and gene therapy been evolving globally over the years?

Cell and gene therapies (CGTs) hold the promise of transforming the healthcare sector, with radical shifts in not only patient outcomes but also the financial dynamics of the industry. CGT applies to diverse, challenging conditions including advanced, late-stage cancer; rare, inherited genetic disorders; and neurodegenerative disorders, thereby increasing the extent of personalization and providing unprecedented cures for diseases once thought incurable.

Over the last two decades, the CGT space has seen remarkable advancements. The two key approvals of Zolgensma (Novartis – Spinal muscular atrophy) in 2019 and Breyanzi (Bristol-Myers-Squibb – Lymphoma) in early 2021 have been a cornerstone for next-gen innovation.

There has been significant progress in vector selection, design, and management of immune responses, thereby improving efficacy and minimizing side effects. Although the FDA approved only 27 CGTS in 2022 (representing ~8% of 340 approved biologics), when viewed through the lens of innovative drugs, CGTs continue to make up a large proportion of total approvals.

What does the clinical trial landscape for cell and gene therapy hold for the future?

As per a 2022 FDA report, CGT developers submitted more than 650 applications for clinical trials in the past two years, with over half of the trials focusing on oncology (sponsored equally by industry, academic participants, and governments).

In cell therapy, efforts are being made toward enhancing autologous therapy manufacturing, reducing costs and shortening vein-to-vein time. The aim is to achieve breakthrough efficacy in solid tumors while improving the overall patient/customer experience. Meanwhile, in gene therapy, interventions aim to address current vector limitations such as transgene size, tropism, and immune response triggers. These platforms facilitate nonviral delivery methods, lower manufacturing costs, and expand capacity.

Promising clinical results boost the pace of CGT advancement. Illustrative examples include positive preliminary results for Pfizer and Sangamo's for SB525 (hemophilia A) and Amicus's AAV-CLN6 (in 7 Batten disease patients). Success rates for CGT products surpass those of small molecule products, possibly due to focused targeting of specific disease drivers instead of broader targets.

Considering the number of clinical trials in various stages, the US FDA expects to receive more than 200 investigational new drug applications every year through 2025. Additionally, it estimates the approval of up to ~20 CGT products a year by 2025.

To what extent are strategic collaborations prevalent and how significant are these initiatives within this domain?

Pharmaceutical and biotechnology companies are showing a growing interest in CGT assets, as evidenced by a rise in acquisitions and licensing agreements. They utilize spin-offs and acquisitions to realign their portfolios, embrace new growth strategies, and strengthen their commercial pipelines.

Notable examples include the acquisition of Novasep's viral vector manufacturing business by ThermoFisher; Bayer's complete acquisition of allogeneic stem cell therapy company BlueRock Therapeutics for ~USD 600 million, and the acquisition of Semma Therapeutics (stem cell-derived human islets for diabetes) by Vertex for ~USD 950 million. The trend of acquisitions and collaborations is likely to continue, where small biotechnology companies would serve as an innovation hubs providing niche capabilities and competencies to large pharma companies.

Despite the peak in M&A activity in 2022, partnerships remained the dominant form of transactions, comprising over 80% of the total. Biopharma firms predominantly choose partnerships as a means to invest in CGT, particularly those that offer access to all assets within a specific modality. They prioritize access to cutting-edge technology irrespective of the indication or therapeutic area, enabling the development of technologies that provide the most clinical benefit.

What is the level of financing and investment activity in this field?

Despite having a limited number of approved drugs, CGT companies continue to attract an increasing amount and proportion of private and public investment.

Over USD 3.9 billion had been raised through IPOs by September 2021, a remarkable 110% increase from the USD 1.8 billion raised in 2018. CGT tool providers have also gained investor attention, raising nearly USD 1.6 billion through IPOs in 2021.

With programs progressing rapidly from clinical to commercial stages and targeting larger patient populations, investors are now placing greater emphasis on manufacturing, which constitutes ~50% of the CGT development and commercialization process. A notable example of this trend is AGC Biologics' acquisition of a commercial manufacturing facility previously owned by Novartis Gene Therapies.

Private equity (PE) and venture capital (VC) investment has experienced significant growth, with average growth rates of ~ 59% for gene therapy and ~63% for cell therapy from 2010 to 2021, surpassing the overall life sciences domain growth rate of ~18%. This increase has provided crucial support to emerging companies.

• Biopharma companies forge partnerships with VC firms or biotech originators for innovation and market expansion. Collaborations with academic institutions allow licensing of new technologies, enabling early-stage investments and fostering rapid innovation. PE firms are also increasingly investing not only in emerging specialty companies (predominantly those with EBITDA of USD 10 million or lower) but also in companies focusing on the plasmid DNA and viral vector space.
• Century Therapeutics with USD 250 million in venture financing – July 1
• Astellas Pharma signs a USD 80 million upfront agreement with Frequency Therapeutics to develop and commercialize therapy for hearing loss – July 17

How is the regulatory and reimbursement landscape evolving within the CGT space?

A rise in filing of applications is expected, particularly for breakthrough and regenerative medicine advanced therapy designations, which would be supported by robust documentation. The FDA's Bespoke Gene Therapy Consortium under the NIH Accelerating Medicines Partnership Program streamlines small-batch gene therapy research, addressing barriers and providing guidance on research, manufacturing, and regulations. It serves as a central hub for these therapies. Moreover, the FDA has launched a gene therapy pilot program that would enable real-time input for sponsors during clinical development, speeding up the development cycle and review process through frequent interactions with regulators.

Globally, there have been significant innovations in pricing and reimbursement. Some of the key developments include the issuance of final national coverage determination of CAR-T therapies for Medicare beneficiaries by The Centers for Medicare & Medicaid Services and launch of the Embarc Benefit Protection plan by Cigna for employers, Health Maintenance Organizations, and other insurers to fully cover the costs of Luxturna and Zolgensma initially, which could then be extended to other therapies.

In summary, global CGT is rapidly advancing, offering revolutionary approaches to treat diseases at their root cause. It has potential to transform healthcare by providing targeted and personalized treatments, along with ongoing R&D efforts focusing on harnessing the full potential of these therapies to benefit patients globally.