Record funding flowed into cell, gene therapy companies last year

Tuesday, March 16, 2021

Source: Biopharma Dive

Dive Brief:

  • Nearly $20 billion in funding flowed into biotech companies developing cell-, gene- and tissue-based therapies last year, widely eclipsing the total invested in 2019 and ending up 50% higher than the previous record of $13.5 billion set in 2018.
  • The numbers, compiled by the industry association Alliance for Regenerative Medicine in a report published Tuesday, reflect a fast-expanding sector that's drawing increased attention from venture capital backers, public company investors and large pharmaceutical companies. 
  • More than $5.5 billion of last year's investments came via venture capital financing for startups in the space, most notably the $700 million raised by cell therapy developer Sana Biotechnology ahead of its initial public offering last month. Nearly $10 billion came via IPOs and secondary stock offerings, and another $3 billion through upfront payments in partnerships and collaboration deals. 

Dive Insight:

Biotech as a whole had a strong year in 2020. The Nasdaq Biotechnology index, which tracks the industry's stock market performance, rose by nearly 25%, recovering from a spring slump as COVID-19 became a pandemic to regain ground strongly. 

Cell and gene therapy companies did even better, according to ARM, which calculated in its report stock performance that surpassed the broader NBI index. 

The regenerative medicine sector, which includes tissue-based treatments as well as cell- and gene-based medicines, got larger, too. ARM counted roughly 1,100 developers worldwide, up about 100 from 2019. 

"The future is now," said Janet Lambert, ARM's CEO, in an interview. "It's not like we're waiting for there to be a big and meaningful cell and gene therapy sector. There is a big and meaningful cell and gene therapy sector."

Recently, however, some of the most advanced companies have run into regulatory roadblocks or revealed disappointing study results. Cancer cases reported in trials of two closely followed gene therapies have renewed safety concerns, even if it appears the experimental treatments have not played a causative role. 

Setbacks are to be expected amid the sector's fast growth, said Lambert, who noted the roughly 150 late-stage studies now ongoing. Many of those programs likely won't succeed, given the usual rates of clinical trial failure in biotech. 

Unlike in the past, however, the pipeline of cell and gene therapies is so broad, and the number of companies involved so high, that setbacks for any one program are less likely to slow the entire sector than in past decades. And while the Food and Drug Administration has not cleared any new gene therapies since landmark approvals for Roche's inherited blindness treatment Luxturna and Novartis's spinal muscular atrophy therapy Zolgensma, the agency recently OK'd new CAR-T cell therapies for types of lymphoma. 

Across Europe, the U.S. and China, regulators are expected to decide on approvals for eight regenerative medicine therapies this year, according to ARM. In the U.S., cancer cell therapies from Bristol Myers Squibb and Johnson & Johnson could reach market, as well as a tissue-based treatment from Mallinckrodt for severe burns. 

Developers and regulators are also learning quickly, particularly in areas like manufacturing and quality control.  

"One of the important things we need to work on is how best to regulate the [chemistry, manufacturing and control] aspects of cell and gene therapy," said Lambert.

"It's clearly a place we've struggled," she added, noting recent disagreements between the FDA and developers over CMC issues like testing assays. 

ARM members are hoping to have more conversations with the agency earlier, Lambert said, although the FDA division in charge of cell and gene therapies has been stretched thin. In comments to the agency, ARM has advocated for the division to receive more resources and staff in renegotiations for the next FDA user fee agreement that will start in 2023. 

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