Record funding went to cell and gene therapy companies in 2020

Expanding Endeavor

Almost $20 billion in funding was poured into biotech companies that develop cell-, gene- and tissue-based therapies in 2020, a huge increase over the amount invested in 2019 and totaling 50 percent higher than the prior record of $13.5 billion established in 2018, according to an article by Ned Pagliarulo in BioPharma Dive (https://www.biopharmadive.com/news/gene-cell-therapy-funding-2020-arm-report/596790/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-03-18%20BioPharma%20Dive:%20Gene%20Therapy%20%5Bissue:33074%5D&utm_term=BioPharma%20Dive:%20Gene%20Therapy).

The industry association Alliance for Regenerative Medicine compiled the numbers in a recently published report. The report shows a fast-growing sector that is getting increased attention from venture capital backers, public company investors and big pharmaceutical companies. 

Over $5.5 billion of 2020's investments were made by venture capital financing for startups in the sector, most significantly the $700 million raised by the cell therapy developer Sana Biotechnology before its initial public offering in February. Almost $10 billion came by means of IPOs and secondary stock offerings. Another $3 billion was raised through upfront payments in partnerships and collaboration deals.

Pagliarulo’s take is that biotech in total had a strong year in 2020. The Nasdaq Biotechnology index was up by almost 25 percent, rising from a spring slump to recapture its footing. He claimed that cell and gene therapy companies performed even more strongly. In terms of the regenerative medicine sector, which comprises tissue-based treatments and cell- and gene-based medicines, there was also significant growth. There are approximately 1,100 developers worldwide, an increase of about 100 from 2019.

Janet Lambert, the Alliance for Regenerative Medicine CEO, said, "The future is now. 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."

The problem is that some of the most advanced companies have encountered regulatory roadblocks or revealed disappointing study results. Cancer cases reported in trials of two closely followed gene therapies have elicited safety concerns, even if it seems that the experimental treatments were not the cause of the cancer.

Lambert believes that setbacks can be expected because of the sector's rapid growth. She pointed out that there are about 150 late-stage studies now in progress. Many of those programs are not likely to succeed because of the usual rates of biotech clinical trial failure.

On the other hand, unlike past history, the pipeline of cell and gene therapies is so large, and the number of companies involved so big, that problems with any one program are not as likely to hamper the entire sector than in previous times. While the Food and Drug Administration (FDA) has not approved any new gene therapies since landmark approvals for Roche's inherited blindness treatment Luxturna and Novartis's spinal muscular atrophy therapy Zolgensma, the FDA recently approved new CAR-T cell therapies for varieties of lymphoma.

Regulators in Europe, China and the U.S. and China are expected to decide on approvals for eight regenerative medicine therapies in 2020. In the U.S., cancer cell therapies from Bristol Myers Squibb and Johnson & Johnson, as well as a tissue-based treatment from Mallinckrodt for severe burns, could get to market. Developers and regulators are also increasing their knowledge rapidly, especially in areas like manufacturing and quality control. 

Lambert added, "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. It's clearly a place we've struggled."

She said that Alliance for Regenerative Medicine members hope to have more and earlier interfaces with the FDA, but the FDA division in charge of cell and gene therapies is overwhelmed. The alliance hopes the division will receive more resources and staff.