The cell and gene therapy (CGT) space is experiencing a transformation period. With a growing focus on therapeutic innovations, companies must navigate a complex landscape of funding challenges, market adoption hurdles, and evolving business models. At this critical juncture, insights from industry experts Greg Crescenzi (CEO Nirrin), Antoine Espinet (CEO MFX), Nina Bauer (CBO SmartCella), Brian Hanrahan (VP Business Development Planet Innovation), and David Lewandowski (Director of Business Development AmplifyBio) offer valuable perspectives into what it takes to succeed today.
This article explores trends and strategies shaping the CGT sector, weaving expert perspectives into a cohesive roadmap for innovators and investors alike.
The funding conundrum: Strategic positioning is key
Securing funding in the CGT sector has never been more competitive. Experts emphasize that investors are increasingly selective, seeking proven value and operational efficiency. Greg Crescenzi highlights the importance of aligning with investors who not only understand the CGT space but also align with the company’s vision. Antoine Espinet echoes this, advising companies to secure revenue-producing customers early to demonstrate product-market-fit, a factor investors weight heavily in their decisions in the competitive product and service space.
The competitive market demands not just a good story but one that can withstand intense scrutiny. Nina Bauer stresses the need for compelling data, realistic timelines, and a minimum viable product (MVP) that delivers clear value to early adopters. Brian Hanrahan adds that successful fundraising hinges on a clearly articulated value proposition that is more holistic. Solutions must include capabilities to integrate digitally, leverage AI/ML, and support automation compatibility.
While decreased interest rates might suggest an easing of financial pressures, experts caution against oversimplification. Brian Hanrahan highlights that while lower interest rates may signal an uptick in financing rounds, the impact depends on the broader market’s ability to enable successful exits. Investors are closely monitoring for signs of IPO or acquisition activity, which could free up capital for new investments. Antoine Espinet points out that the real bottleneck lies in the lack of successful exits, which are crucial for replenishing venture capital. To date investors have been unable to exit via IPO or sales, and are thus unable to deploy new capital. At the same time, Nina Bauer notes that acquisitions by major players are increasing, freeing up funds for reinvestment in promising startups. This dynamic suggests a potential uptick in funding activity as the market adjusts and we see more IPOs on the horizon. The end of the year has brought optimism to the industry with recent activities such as Roche’s acquisition of Poseida Therapeutics and Novartis’ acquisition of Kate Therapeutics.
Beyond capital: Accelerating market adoption
Funding alone does not guarantee market adoption, especially in a cautious, risk-averse biotech segment like CGT. Experts agree that robust data and customer validation are the best indicators of future market success. Greg Crescenzi underscores the need for time and mindset shifts among customers, who must embrace innovation over traditional R&D approaches.
Brian Hanrahan emphasizes that achieving market adoption now requires solutions to be more holistic and integrated rather than introducing new technologies for individual processing steps. Workflow simplification and integration – particularly through digital capabilities, automation, and data – are essential. Data from beta sites and KOLs demonstrating improved yields and cell potency is increasingly critical. Antoine Espinet advocates for solving critical customer problems through deep engagement – whether via voice-of-customer interviews, surveys, or early-adopter programs.
Evolving business models: rethinking revenue streams
Traditional revenue models like the razor/razorblade approach remain popular in CGT, but experts suggest room for innovation. Greg Crescenzi appreciates the model’s predictability, which appeals to investors, but notes that subscription-based approaches may gain traction due to their mutual benefits.
Brian Hanrahan observes that the CGT industry’s low product volumes, compared with other industries like in vitro diagnostics, pose unique challenges. The value of the ‘razor’ (consumable) in CGT is much greater, and volumes do not yet allow for significant cost reductions or improved profit margins. He emphasizes that partnerships and collaborations could be key to increasing revenue in this complex landscape. Antoine Espinet adds that capex barriers associated with the razor/razorblade model could be addressed through leasing or rental alternatives.
The first customer often sets the tone for broader adoption as this client serves as a benchmark to other potential customers. Experts advise choosing early adopters carefully, ensuring data-sharing agreements allow companies to showcase success stories. In addition, early reference sites and agreed communication plans which benefit both sides are optimal outcomes. David Lewandowski adds that scalable solutions and operational efficiencies, paired with automation, can significantly lower costs and broaden market reach. Nina Bauer anticipates a growing role for AI and data-driven services, shifting focus from physical consumables to software and analytics.
Trends and innovations shaping the future of CGT
The CGT landscape is seeing an ever-increasing rise with innovation, from scientific breakthroughs to technological advancements. Greg Crescenzi points to the transformative potential of mRNA and lipid nanoparticles (LNPs) non-viral methods, which are opening new avenues for therapeutic development. Antoine Espinet highlights promising data in cell therapy, particularly for solid tumors and autoimmune diseases, which could lead to significant commercial successes in the coming years for larger patient populations.
Brian Hanrahan identifies AI, ML, robotics, and automation as significant trends in the sector. While their game-changing potential remains to be fully realized, he sees Autologous CAR-T therapies that enable near-patient or point-of-care solutions as revolutionary. These approaches can reduce logistical challenges, shorten processing times, and expand access for more patients—an impactful development in a sector aiming to scale. David Lewandowski echoes the need for scalability. Beyond technical performance, companies must design solutions that can serve larger markets at lower costs. Automation, operational efficiency, and intuitive design are essential for achieving this scalability and building customer trust.
Looking ahead, experts predict a steady but cautious trajectory for the CGT sector in 2025. Clinical breakthroughs and successful exits will be essential for maintaining momentum. As Antoine Espinet observes, the industry needs visible wins to further inspire confidence and fuel long-term growth.
Conclusion: A collaborative path forward
The CGT sector is at a crossroads, where challenges intersect with unprecedented opportunities. By focusing on operational efficiency, leveraging data, and embracing innovative business models, companies can navigate this complex landscape and unlock new levels of industry success. Collaboration and the ability to share learnings will be critical as the industry continues rapid growth.
As we look to the future, one thing is clear: the CGT sector’s potential to transform patients’ lives is boundless. Let’s keep the conversation going and explore how we can collectively shape the next wave of innovation in this exciting field.
