Michael Moussourakis, Vice President of Strategy, Alconox Inc.
The pharmaceutical and biotech industries are undergoing several new and interesting investment trends. The pandemic activated vast improvements in cleaning/disinfection protocols, communications, vaccine manufacturing, and data management. Improvements and approvals in the gene therapy space are moving this technology into an even more mainstream source of therapeutic drug manufacturing. Artificial intelligence (AI) is also an interesting trend. Now that the initial “craze” period has come to a close, biopharma vendors and manufacturers can consider the best applications for AI today and into the future. Items like meeting summaries, document drafts for marcom, and technical and product support purposes, as well as research to focus and narrow down R&D / process development work can all be boosted in productivity and made more efficient by AI. In many ways, AI can assist everyone from supporting staff through senior management. Ultimately, this can help lower costs and/or decrease time to market for critical therapies.
Tim Tyson, Chairman and Chief Executive Officer, TriRx Pharmaceutical Services
Several notable investment trends currently shape the pharmaceutical industry and influence its direction. Primarily, there's a growing emphasis on biotechnology and precision medicine, with investors increasingly favoring companies engaged in developing targeted therapies and personalized treatment approaches. This trend reflects the industry's shift toward more precise and effective treatments tailored to individual patient needs. Additionally, significant investment is directed towards digital health technologies, including telemedicine, remote patient monitoring, and health analytics. This investment is driven by the increasing adoption of digital solutions and the demand for innovative healthcare delivery models. Consolidation and strategic partnerships are also notable trends, with pharmaceutical companies seeking to enhance their pipelines, expand market presence, and diversify revenue streams through mergers, acquisitions, and collaborations. Interest is also growing in areas such as gene therapy, cell therapy, and regenerative medicine, fueled by advancements in biotechnology and the potential for transformative treatments for various diseases. Overall, these investment trends drive innovation, shape the competitive landscape, and influence the strategic direction of the pharmaceutical industry towards more targeted, personalized, and digitally enabled healthcare solutions.
Volker Herrmann, Chief Executive Officer, Sonata Therapeutics; Chief Executive Officer and Partner, Flagship Pioneering
In a continuously challenging funding environment, investors are most interested in those companies with a deep understanding of underlying biology and a clear path to the clinic. In diseases of high unmet need, such as cancer or fibrosis, investors are looking for companies developing novel therapeutics that have a very good chance of translating into clinical success. The complexity of cancer and fibrosis has thwarted much of the billions of dollars invested and spent developing therapies to cure these conditions. This may largely be due to the complex multicellular networks that drive these diseases and their progression. But instead of focusing on a single cell type like most therapeutics, what if there were medicines that modulate all key cell types in a disease network? Approaches to modulating disease networks are being explored in academic labs, biotechs, and the Institute of Cancer Research. At Sonata, we are pioneering the development of Network Medicines™, a new class of therapeutics that reprogram diseased cells to release a defined array of signals that precisely coordinate all key cell types in multicellular networks to drive disease resolution. As investors continue to look for novel solutions to complex diseases, I expect more holistic, network-driven solutions to become a key industry trend.
Robert Gustines, Vice President Business Development, GBI Biomanufacturing
Biopharmaceutical investments were low in 2022 and early 2023 but accelerated in late 2023, with several deals in excess of $50 million. That trend hopefully continues in 2024. Several multibillion-dollar M&A deals in Q1 of this year should spark new investment and enthusiasm for platform companies and those advancing single therapies headed for the clinic or in early clinical seeking additional investment to advance. Of concern, we've seen many biotech layoffs in 2023, not just smaller platform/single asset companies but big pharma as well. Beyond the clinical lead, portfolio development is dormant, and development layoffs ensue. Fortunately, big pharma has taken up some of the slack in hiring in late ’23. Deals from Q4 2023 into 2024 cover multiple technologies: CRISPR, CAR-T, mAbs, and multi-specific antibodies, small molecules, LSDs, and siRNA included. Two standouts: radiopharmaceuticals and antibody-drug conjugates (ADCs). As new investments come to fruition, CDMOs are ready for new projects to ensure developers have access to capacity. Currently, available capacity varies depending upon the CMO, but I expect the sector will respond to demand as funding flows in. We may not see investment pace 2021, but technological advances are too real and irresistible to wait on the sidelines.
Chia Chia Sun, Chief Commercial Officer, Fab Biopharma
There is more investment in immunology and increasing awareness of needs in women's health although investment is severely lacking. Due to the overlap between immunology and women's health, inevitably some of the immunology investment will contribute to women's health. Biden's executive order providing a kickstart of $12 billion towards women's health will accelerate the field's R&D.
Andrew Lewis, Ph.D., Chief Scientific Officer, Quotient Sciences
CDMOs/CROs have a critical role in providing innovative solutions and strategic partnership to their clients. As we continue to see the industry evolve “post-COVID,” 2023 continued to be a difficult year when it came to rising inflation impacting biotech funding and M&A. We remain positive and are already seeing turnarounds happening now several months into 2024, with venture funds and large pharmaceutical companies investing in innovative molecules and platforms supported by robust science. For example, we’re seeing the surging interest in GLP-1 analogues and other incretin hormones for the treatment of obesity, with a notable pipeline of next-gen drugs that are targeting oral administration. We believe that oral administration of these therapeutics has the potential to address many of the challenges faced in this incredibly competitive space — in terms of patient acceptability, control of adverse events, and supply chain capacity issues, which will be of great benefit for patients as more get to market.
Michelle Hall, Vice President, Marketing, Mikart
Some of these trends include increased funding in biotech startups, growing interest in precision medicine and personalized therapies, a focus on digital health solutions, and investments in advance manufacturing technologies, such as continuous manufacturing. These trends are shaping the sector by driving innovation, improving patient outcomes, and streamlining drug development and production processes.
Juergen Nerlich, Head of Strategy & Marketing, Oxford Biomedica
Amid the dynamic landscape, several trends are shaping the pharmaceutical sector. First, there’s a notable de-globalization trend driven by the need to de-risk supply chains in response to macroeconomic fluctuations. Second, companies are allocating higher spending toward innovative modalities like cell therapies and mRNA-based treatments, reflecting a shift in drug development priorities. Third, strategic technology investments aim to mature manufacturing platforms, enhancing efficiency and scalability. Additionally, there’s a surge in capacity investments to meet growing demand. Lastly, the industry is embracing digitalization across operations and the customer journey. Oxford Biomedica’s (OXB) approach to innovation focuses on delivering value through innovative solutions tailored to the unique challenges of cell and gene therapy. Its fourth-generation lentiviral vector delivery platform, the TetraVecta™ system, allows for higher quality, potency, safety, expression level, and packaging capacity. By enhancing viral vector production, OXB is not only industrializing the process but also achieving higher productivity, better quality, and lower costs, thereby benefiting clients and ultimately patients. This combination of platform and process innovation is expected to significantly reduce the cost per dose, accelerating clinical development and democratizing access to these life-changing therapies. As technology becomes more accessible and affordable, the competitive differentiation edge is narrowing. Companies must innovate strategically to stand out. Moreover, the once-constraining GMP capacity is no longer a significant barrier, allowing for smoother production and distribution of critical medications.
David O'Connell, Director of Scientific Affairs, PCI Pharma Services
Sterile injectable dosage forms are a major investment driver in the biopharmaceutical space. CDMOs around the globe, including PCI, are investing heavily in acquisitions or expansions for sterile fill-finish and lyophilization services; given the market is projected to grow at a compound annual growth rate (CAGR) of around 8% in the years ahead, it makes perfect sense to do so. The demand for highly potent oral solid dosage forms also continues to be a major driver for investment in the industry. Drug products containing highly potent active pharmaceutical ingredients (HPAPIs) target specific molecular pathways or receptors, resulting in a more selective treatment while minimizing off-target effects and reducing the risk of adverse reactions. Precision oral medicines are also more patient-friendly than sterile injectable counterparts and are more cost- and time-effective in terms of development processes, so they will remain a consistent presence in terms of industry investments going forward.
Arushi Narang, Senior Business Strategist, Samsung Biologics
As a global contract development and manufacturing organization (CDMO), Samsung Biologics has always aligned its business strategy and development with the evolving trends in the biopharmaceutical industry. Currently, in addition to macro and technological dynamics, we have been monitoring the following trends:
- Diverse modalities
In 2023, ADCs were the number one focus of pharma deals, with a hectic six deals every month on average and a total of $120 billion committed. This was galvanized by a series of stellar successes in the clinic and market: Padcev and Keytruda nearly doubling the overall survival rate in first-line bladder cancer, Elahere’s impressive launch in ovarian cancer, and Enhertu’s pan-tumor approval, to name a few. With lesser fanfare, bi- and multi-specific antibodies are attracting investment, with 376 new clinical trials started in 2023, which is five times more in number than those in 2019. Samsung Biologics invested in ADC conjugation services in 2022, and our dedicated ADC facility is expected to come online in January 2025. For multi-specific antibodies, our proprietary bispecific platform was launched in October 2022. Overall, 50% of our development projects are for complex biologics. We are also following CAR-T in autoimmune disease, where more than $500 million of funds were raised by biotechs in the first quarter. Samsung Biologics is continuously evaluating organic and inorganic growth in new modalities. As drug developers have more modalities in their arsenal, there will be better treatments for more patients. However, R&D and supply chains will naturally get more complex.
- New disease areas and mechanisms
We’ve been fortunate to witness a series of scientific breakthroughs recently: GLP-1 drugs have already become a cultural phenomenon. There are the first disease-modifying treatments for Alzheimer’s, respiratory syncytial virus (RSV) vaccines, and new treatments for small cell lung cancer and chronic obstructive pulmonary disorder, which is the third leading cause of death globally. In the future, we may have treatments for Parkinson’s and other highly prevalent neurological diseases and autoimmune disorders like Sjögren's syndrome. This is good news and cannot come soon enough. However, per our forecasts, the global manufacturing capacity for biologics drugs may not be enough to supply these medicines, even with all the capacity additions announced so far. So, we’re preparing to meet this demand. We already have 604,000 liters at a range of scales from 1,000 to 15,000 liters on our Bio Campus I, the world’s largest site for biologics drug substances. Our next plant, Plant 5 with 180,000 liters, is coming online in April 2025, on a new adjacent Bio Campus II. We plan to subsequently build three more large-scale plants in the second campus to provide over 1.3 million liters of capacity to global biotechs and pharma companies by 2032.
- Longer-term, integrated partnerships with contract manufacturers
As the complexity and capacity needs of pipeline rise, our pharma partners are increasingly engaging us for long-term, product-agnostic, and end-to-end scope contracts. This helps minimize their risk and cost.
Matthew Bio, Ph.D., Chief Scientific Officer, Cambrex
The pharmaceutical industry is increasingly investing in new and diverse modalities to selectively engage therapeutic targets. Heterobifunctional protein degraders, peptides, oligomers, and polymers are examples of the complex synthetic modalities now routinely being developed as new drug candidates. In addition to new modalities, traditional small molecules are becoming increasingly complex. These shifts in the type and complexity of chemical matter in drug development require that CDMOs invest in development and manufacturing capabilities to meet the demands of these investigational new drugs. CDMOs will require a highly skilled workforce able to identify and proactively develop the capabilities for these new modalities. A collaborative partnership between innovator and CDMO, where both parties share in the risk of commercializing new technologies, will facilitate success.
Franco Negron, Chief Executive Officer, Simtra
In the dynamic landscape of the pharmaceutical industry, it's crucial to stay ahead of emerging trends that are reshaping our direction and approach. Today, I want to shed light on some key investment trends and their impact on our strategies at Simtra.
- Harnessing Innovation with Emerging BioPharma Companies (EBPs)
Innovation remains a cornerstone, driven largely by emerging biopharma companies (EBPs). These pre-commercial biotech companies, without any revenue, are spearheading development pipelines, owning over 280 unpartnered assets in phase III. Despite an evolving funding environment for EBPs, their role is pivotal. At Simtra, we recognize the need to cater to this new clientele with tailored support and expertise in manufacturing, offering flexibility and guidance as they navigate the path from discovery to market.
- Meeting the Demand for Highly Active Sterile Products
The rise in highly active (potent) sterile products, particularly in cancer therapies and novel treatments like radiopharmaceuticals and gene therapies, presents unique manufacturing challenges. Our focus on contamination control strategies and primary containment at Simtra underscores our commitment to safely producing these advanced therapies within our multi-purpose facilities.
- Revival of Therapy Areas Through Breakthrough Innovation
Breakthrough innovation is revitalizing previously stalled therapy areas, such as GLP-1s for obesity and new approaches to treat Alzheimer’s disease, schizophrenia, or depression. This resurgence demands increased complexity in manufacturing, particularly with prefilled syringes and cartridge filling for autoinjectors. Fill machines have grown more complex to support multiple vial types and sizes, and container types. It also takes more time for engineering and testing to supply a robust solution. Simtra's strategic equipment selection and capacity expansion reflect our readiness to support this evolving market.
- Leveraging Digital Enablement for Operational Optimization
As capacity constraints persist, digital enablement becomes essential for the most productive operational execution. Harnessing data-driven insights, we aim to enhance efficiency, reduce downtime, and optimize day-to-day operations at Simtra. In conclusion, Simtra is navigating these investment trends with agility and foresight. We're committed to leveraging our expertise to support the evolving needs of our industry partners and deliver innovative solutions that drive progress and improve patient outcomes.
Marc Hummersone, Senior Director, R&D, Astrea Bioseparations
Current investment trends in the pharmaceutical sector reflect significant "internalization" of the supply chain by major corporations. This is evident from acquisitions and investments like Cytiva's expansion of resin manufacturing in the United States, Lonza’s acquisition of Kodiak Bio, and Novo Nordisk’s purchase of Catalent. These moves to control workflow elements for large-scale product manufacturing, though beneficial for supply chain stabilization, might reduce customer choices, potentially affecting pricing and competitiveness.
Besides mergers and acquisitions, persistent high inflation and rising interest rates have propelled strategic and often distressed deal-making. Despite these challenges, over $17.0 billion was raised via venture capital investments in therapeutics in 2023, with an additional $21.5 billion in life sciences, ensuring a continuous flow in the development pipeline.
Private equity has also been active, getting creative in deal-making, highlighted by the Biotage–Astrea Bioseparations merger which combined small and large molecule purification and analysis businesses. The industry remains competitive, emphasizing not only the need for investment but also the efficiency in utilizing available funds to thrive.
Nigel Theobald, Chief Executive Officer, N4 Pharma
With more than 4,000 gene, cell, and RNA therapies in development, biopharmaceutical R&D remains a focus for innovation and investment. However, the effective delivery of new and emerging therapies requires particular attention. The mRNA-based COVID-19 vaccines proved that nanoparticles play a key role in nucleic acid delivery, but there are notable drawbacks to the lipid-based systems currently in use.
Investment is needed in new technologies — such as innovative, non-lipid delivery systems like Nuvec® — when they are in the preclinical phase, especially in Europe. It’s difficult for new technologies to raise funds, particularly in the UK.
When it comes to M&A, 72% of leaders say access to new technologies is a very — or the most — important transaction objective. With that in mind, investment that can help bring new technologies further along the development pipeline, so that more of them are available for M&A and commercialization, is important.
In 2023, large pharmaceutical companies focused on smaller deals, with the proportion of M&A mega deals (valued over $1 billion) having declined 56% since 2021’s record high. Many of these smaller deals involve targets with only pre-commercial products, demonstrating this welcome trend of investment coming through earlier on.
Jan Vertommen, Ph.D., Vice President, Head of Commercial Development of Small Molecules, Lonza
From a CDMO perspective, we are observing a few market trends that drive investments in small molecule manufacturing capabilities and capacity.
The first trend is that many of the newly approved oncology and rare disease products require smaller commercial drug substance quantities. Therefore, new drug substance-related investments are sized to these volumes with reactors of 4–6 m3 capable of handling highly potent compounds versus the 10 m3 standard reactors built in the past.
A notable exception to the above trend is the glucagon-like peptide 1 (GLP-1)–related medicines under development targeting the weight loss market, for which larger reactor investments will still be required to meet the projected drug substance demand.
Within the oncology space, the success of ADCs forms a specific trend requiring additional investments in high containment development and manufacturing facilities for the cytotoxic payload drug portion of these ADCs.
Audrey Greenberg, Founder and Officer, Center for Breakthrough Medicines / SK pharmteco
We’re currently seeing three big trends: biotech, personalized medicine, and digital health. These investments fuel serious innovation, including faster drug discovery thanks to new technology, targeted therapies that hit the bullseye instead of spraying bullets, and better patient outcomes.
In biotech, investments are being made in areas like gene editing, mRNA technology, and next-generation biologics, offering the potential for more precise and effective treatments. Investments in personalized medicine are accelerating the shift from broad-spectrum therapies to treatments tailored to individual patients' unique needs. Digital health investments include areas such as AI to analyze vast data sets of patient information and medical research to accelerate drug discovery and development and analysis of big data to gain valuable insights into disease progression, treatment effectiveness, and potential new drug targets.
Additionally, there's a growing trend of mergers and acquisitions, collaborations, and partnerships. This collaborative approach combines expertise and resources to accelerate research and development efforts and potentially expand access to new markets.
Bridget Seay, Executive Director of Customer Experience & Commercial Consulting, epocrates
The digitization of medicine continues to be reflected in investment trends seen in the pharmaceutical industry. AI, real-world data, blockchain technology, and digital therapeutics are all key elements to most pharmaceutic investments strategies. Downward pressures on cost as a result of recent profit capping legislation have pharma hyper-focused on the achievable gains (increased speed to market, reduction in manufacturing headaches, improved patient adherence) that digital solutions can offer. I suspect this will translate into future focus on white-space opportunities, especially give recent success in spaces like Alzheimer’s disease and obesity. These white spaces are traditionally higher risk, but historically have proven to be significantly more profitable than attempting to carve out a small share of an already overcrowded space.
Anna Codina, Ph.D., Senior Director Biopharma & Strategic Market Development, Bruker BioSpin
We’re seeing investment from manufacturers in originator GLP-1 agonists that are approved to treat type 2 diabetes and other obesity-related diseases. Now that patents are expiring for previously approved therapeutic synthetic peptides, there is also growing interest in the development of generic products, including insulin and GLP-1. The U.S. Food and Drug Administration (FDA) has released recommended guidance relating to filing abbreviated new drug applications (ANDAs) which encourage the use of high-resolution, multi-dimensional nuclear magnetic resonance (NMR) for comparability assessments to reference peptides.
Additionally, since the FDA released its draft guidance on the development of oligonucleotide therapeutics, there has been additional guidance provided that relates to specific therapeutics — for example, givosiran sodium. The FDA recommends testing with orthogonal analytical methods with sufficient sensitivity, discriminating, and resolving power, such as NMR, to demonstrate the uniformity of active pharmaceutical ingredients (APIs). Specifically, NMR is recommended to evaluate the API sequence, chemical structure, and composition.
NMR is a highly sensitive technique that is well suited to the analysis of therapeutic peptides and oligonucleotides that serve as APIs. This is critical in drug discovery, development, and manufacture to ensure the highest possible quality, safety, and efficacy. These drug products benefit from the quantitative nature and wealth of structural information that can be achieved with NMR.
Karen Madden, Chief Technology Officer, MilliporeSigma, the Life Science business of Merck KGaA, Darmstadt, Germany
At MilliporeSigma, we established a central Life Science Technology Office in 2022 to drive long-term innovations and solidify our company as a technology leader. We are focused on investing in strategic innovation vectors, that reflect the intersection of the needs of our customers and trends in science and the industry. The strategic innovation vectors we are investing in include Labs & Facilities of the Future, Novel Modalities, Next-Generation Biology, AI, and Digital while at the same time continuing to innovate in our core markets and technologies and moving toward more sustainable offerings.
As the fields of preventive and personalized medicine evolve, it will be essential to set the standard with robust, scalable, efficient processes for the production of novel modalities, including for ADC, viral vector, and mRNA therapies. This in turn will support the expansion of disruptive novel modalities to treat the most challenging and chronic conditions, including cancer, heart disease, and auto-immune diseases.
For over 350 years, patients have been at the heart of everything we do in healthcare. It drives the discoveries and the technologies we create — and it forms the basis of our future growth.
Fran Brown, Ph.D., Senior Vice President, Certara Drug Development Solutions
There's a lot of excitement right now around how AI is streamlining and expediting drug development. A few examples include generative AI (GenAI) revolutionizing processes like target identification and compound design, making them faster and more effective, and AI's potential to streamline regulatory writing, which could greatly improve efficiency across all stages of drug development. In terms of treatment modalities, the GLP-1 agonists as a class are inviting major attention as recent studies show that their efficacy extends beyond diabetes, into weight loss, cardiovascular health, and potentially metabolic dysfunction-associated steatohepatitis (MASH) and kidney disease. Oncology, as always, remains very active, and we’re seeing a lot of partnering deals to address novel and growing treatment modalities, such as ADCs, bispecific antibodies and chimeric antigen receptor (CAR)-T cell therapies. These trends highlight an exciting time within the industry as we witness how these advancements will impact drug development and patient care moving forward.
David Horn, Chief Financial Officer, Seer
The pharmaceutical industry is increasingly acknowledging the potential of proteomics in providing vital insights into health and disease by analyzing the structure and function of proteins. As genomic efforts have encountered challenges in meeting drug discovery and development expectations, there's been a shift toward multiomic strategies incorporating the dynamic view of biology provided by proteomics. This involves understanding how proteins influence human biology, especially in complex disease areas, such as neurodegenerative disorders and oncology, where a significant unmet need exists. It is clear that identifying disease-driving protein variants and gaining peptide-level insights, which genomic techniques might overlook, can lead to new discoveries in biomarker identification and the development of more precise medicines.
Raj Indupuri, Chief Executive Officer and Co-Founder, eClinical Solutions
The pharmaceutical industry is navigating a complex landscape in 2024, shaped by the aftermath of market downturns in 2023 that slowed investments across the board. Life sciences and biotech companies faced significant challenges accessing capital, which especially impacted emerging biotech firms. However, driven by the long life cycle of drug discovery and clinical trials, which can sometimes be 10 years or more, the industry has shown resilience, as these core components demand sizable investments in innovation and science. Although the beginning of the year was marked by cautious optimism, investors have been exercising more targeted and selective approaches in their investments.
In turn, we’re seeing an emerging focus around mergers and acquisitions (M&A) within life sciences, pivotal for top companies looking to grow, as well as secure and protect their pipeline from a shrinking patent lifecycle, due to ongoing regulations and negotiations regarding drug pricing and patent cliffs. For emerging and mid-market biopharma, this creates a dynamic competitive landscape where companies that are nimble, tech-forward, and innovative will have an edge. Strategic M&A activity in conjunction with an innovation focus will propel the industry on a sustainable growth path despite uncertainties.
Stella Sarraf, Ph.D., Founder and Chief Executive Officer, Spinogenix
Recent months have seen a surge in interest in the central nervous system and mental health treatment sectors, evidenced by significant deals such as Bristol Myers Squibb's $14 billion acquisition of Karuna Therapeutics and AbbVie's $8.7 billion deal for Cerevel Therapeutics, both relating to novel schizophrenia treatments. However, despite this growing interest, the field continues to face disheartening setbacks, such as those seen recently in amyotrophic lateral sclerosis (ALS).
Drug development in these areas typically involves treatments that aim to slow disease progression or manage symptoms. However, there is an increasing focus on regenerative medicine approaches that may help regain some functions that have been lost. At the same time, there is growing appreciation that synapse loss and dysfunction are central features of pathogenesis in a broad spectrum of diseases. Spinogenix is developing once-a-day pills targeting the regeneration of synapses in neurodegenerative and neuropsychiatric conditions including ALS, Alzheimer's disease, and schizophrenia. In addition, we are advancing novel drugs to correct specific synaptic dysfunctions in fragile X syndrome. These therapies aim to reverse declines in cognitive and motor function, representing a significant departure from conventional approaches. Such breakthroughs have the potential to revolutionize the sector and are driving heightened interest in the industry.
Bryan Katz, Chief Strategy Officer/Head of Corporate Development, ProPharma
In the main, investment trends are being shaped by three vectors: legislation, regulation, and technology. The Inflation Reduction Act has essentially shifted the allocation of capital in favor of large molecule development versus small. Given the latter’s Medicare negotiation nine years post-launch, investors struggle with small molecule return on investment (ROI).
Investment in rare and orphan development continues to benefit from strong regulatory support. Capital inflows for viable therapies in rare and orphan continues to benefit from accelerated approval pathways and technology-enabling science. While discovery and development are still subject to in vivo animal and human studies, target identification and drugability have been enhanced by new AI and advanced automation, de-risking bets and accelerating cycle times.
Josh Ludwig, Global Director, Commercial Operations, ScaleReady
In the wake of regulatory approval and commercial launch of multiple CAR-T cell therapies and ex vivo gene-modified or gene-edited therapies, big pharmaceutical companies are showing strong interest in selected cell therapy drug products. The most attractive possibilities remain those with a significant amount of clinical data demonstrating potential for commercial approval.
As a result, the industry is also showing concomitant interest in cell therapy manufacturing. Success stories, such as Legend Biotech’s Carvykti (ciltacabtagene autoleucel), which attracted Janssen (now Johnson & Johnson Innovative Medicine) as a major pharma partner ahead of commercialization, are a case in point: months after initial approval, the partners scaled up their investment in manufacturing to address manufacturing constraints. And last month, the partners secured an additional FDA approval to treat patients with multiple myeloma much earlier, which will greatly expand the potential population even further.
With this kind of progress, demand will continue to rise, even though it already vastly outpaces supply today. This will drive more investment from large pharma not just in the next big therapy, but in manufacturing and the enabling technologies that support scale-up today — it’s already happening.
Shaad Cajee, Head of Marketing, ReiThera
Cell and gene therapy is a pivotal focus in pharmaceutical investment trends, particularly in North America and Europe, offering transformative potential for treating genetic diseases and cancers. Adeno-associated virus (AAV) is widely considered the most important vector in gene delivery. Specialized biotech investors are directing capital toward companies pioneering this approach.
The current quest is to expand experience on rare genetic diseases or ocular diseases to wider populations and larger organs. This shift drives investment trends, with a substantial increase in small companies developing reagents. Among larger companies, Sartorius recently acquired reagents company Polyplus.
Strategic collaborations are key in advancing gene therapy, providing pathways for research and development while accessing vital expertise and resources. The projected global gene therapy market, estimated to reach $44.7 billion by 2032, underscores significant opportunities, especially in regions with high disease prevalence.
Pharmaceutical companies strategically invest in gene therapy to secure deals and position themselves at the forefront of industry advancements. Increasing investment and strategic partnerships have the potential to revolutionize medicine and address unmet medical needs.
Matthew Paterson, Chief Commercial Officer, eXmoor Pharma
Our sector will continue to be influenced by economic instability, regulatory pressures, and emerging technologies this year.
Ongoing geopolitical tensions threaten to impact the pharmaceutical investment landscape and curtail growth. Investors are being more cautious about which assets to invest in, companies are being more selective on which assets to progress into development, and cost optimization has become a higher priority for many companies.
Investment decisions follow companies’ efforts to adapt to regulatory pressures, including drug pricing and reimbursement constraints, as well as increased regulatory requirements to bring a drug to market. These efforts include more innovative R&D models, leveraging emerging technologies, and encouraging a wider array of commercial and academic collaborations.
Emerging technologies in particular will remain a focal point for the sector with continued momentum towards precision medicine and personalized cell and gene therapies, especially given recent approvals and advancements in this field. Progress in AI and robotics will also continue to influence the sector's direction by creating efficiencies in the discovery and development value chain. These technologies will be prominent in investors’ plans when making investment decisions.
Stella Vnook, Chief Executive Officer, Likarda
We are coming off an economically challenging 2023, where venture capital funding was hard-fought for startups, and those that survived often relied on non-dilutive funding, like grants. Many companies are still reeling from the funding contraction, either downsizing or shuttering. Economic recoveries often come with renewed investor confidence and opportunities for growth, though the timeline for such recoveries can vary. Some startups may be finding alternative sources of funding — including strategic partnerships or collaborations with larger companies or other startups to access additional resources and expertise.
While conservative opportunities may offer more immediate returns, investors continue to be drawn to cutting-edge research and development with the potential for breakthrough innovations that drive significant long-term value. This includes CRISPR gene editing, cell therapy, and tissue regeneration, which can lead to disruptive technologies, new markets, and competitive advantages.
This has increasingly meant chasing precision medicine, biologics, and especially cell and gene therapies. Because of the complexity of these newer therapies, investors are also attracted to AI and other enabling technologies needed to support this next generation of therapies. In addition, pharmaceutical companies will always need to continue with strategic investments to drive sustainable growth.
Lindsay Davies, Ph.D., Chief Scientific Officer, NextCell Pharma
The current economic climate is strongly impacting trends and foci in the pharmaceutical industry. Innovation and products in development continue to present at a steady rate, but access to financial resources has been tightened, increasing the need for pharmaceutical developers to strengthen and better define their business plans and inflection points when looking for investment. Investors have recognized that, with the need to streamline development pathways, and sustainability sitting at the forefront of biotech business modelling, scalability and automation are of growing importance, with the use of AI influencing all of us on differing levels for business planning and growth.
Investors are also responding to changes in the regulatory space, especially with respect to the Health Technology Assessment, which are shaping drug development pathways especially within Europe, impacting drug pricing and reimbursement considerations and route to market.
Priya Baraniak, Ph.D., Chief Business Officer, OrganaBio
There has been a significant amount of mergers and acquisitions activity in the sector from late 2023 through the first half of 2024. This has especially been true for collaborative deals that saw amalgamations of complementary or synergistic technology platforms.
In general, pharma companies seem to be focusing on later-stage and commercial assets instead of early-stage development, presumably a conservative approach but one that could have ramifications for the next generation of therapies. However, most have retained the patient-centric focus we have come to expect.
We are seeing continued strong funding for cancer research, but conversely, some technologies that had been exclusively in the cancer space are expanding — specifically, new applications of CAR-T and other cell therapies in autoimmune diseases. This is a huge positive, as it all will lead to a more rapid advancement of the field and growing applications for greater numbers of patients suffering from broader variety of diseases.
David McErlane, Group President, Biologics, Catalent
Despite COVID-19 and recent transitory biotech funding issues, the industry has continued to invest in innovation. Annual research and development spend has grown almost 10% annually since 2019 to reach an estimated record $300 billion this year, yielding a record number of active drugs in development. And this pipeline growth is broad-based; while new modalities like cell and gene therapies have almost doubled, industry mainstay modalities like antibodies and small molecules are up more than one-third.
Since much of this pipeline expansion has been driven by non-large cap companies with smaller in-house capabilities or capacity, CDMOs have stepped forward to meet the challenge and have invested billions of dollars expanding both development and commercial capacity to enable these innovative treatments to reach patients who need them.
