Rapid Growth in Cell and Gene Therapy Services


Cell and gene therapies are still in their infancy, but have enormous potential, driving rapid growth in outsourced services that support these novel treatments…
Cell and gene therapy represent novel overlapping biomedical fields to treat, prevent, and remediate underlying causes of inherited and acquired diseases. Using different mechanisms of action, both therapies are poised to continue to make revolutionary advances over the next 5 to 10 years, particularly for disorders with shorter-term mortality rates, such as lymphoma and leukemia. As the biopharmaceutical industry strives to develop new labels for dire unmet medical needs, expand the number and scope of clinical trials, and deliver treatments to patients around the world in a cost-effective manner, one of the daunting challenges for the industry is to find the means to manufacture these highly complex and personalized therapies at scale. Process and technological innovations, including identification of failure modes and workflow improvements, such as the use of one-time sterile-fluid transfers, will help advance the sector, but a massive build-out of commercial-scale manufacturing capabilities will be required. Over the past year alone, the clinical pipeline of cell and gene therapies has increased by 25%, resulting in significant capacity constraints for biopharmaceutical companies and CDMOs.

M&A and Investment Implications:
This need for manufacturing capacity will drive rapid growth for cell and gene therapy CDMO services, as well as heightened M&A activity at premium valuations, such as Novartis’ acquisition of CellforCure in late 2018 and Catalent’s acquisition of MaSTherCell in early 2020, and massive capital investments in new cell and gene therapy production facilities and delivery logistics systems, such as Pfizer’s $500 million investment in a new North Carolina facility in mid-2019. CDMO players with advanced manufacturing capabilities stand to benefit from these strong industry tailwinds given their ability to accelerate the commercialization and delivery of these game-changing therapies.

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