11.2  Supply Chain Considerations and Pricing Dynamics

11.2.1  Since the viral vectors critical to gene and gene-modified cell therapies are not yet commoditized active ingredients, they cannot simply be purchased by quantity (e.g., a gram of AAV), so costs are largely based on time and labor: the occupancy of the GMP suite or laboratory and the team working on it.

11.3  Considerations for the Demand Profile and Type of Viral Vector Required

11.3.1  While plasmids and cell banks are more consistent and generalizable with respect to demand and costs, there are nuanced considerations when assessing the demand profile for viral vectors. Viral vector doses can vary dramatically depending on the clinical indication (^{Table 29}), and by the type of viral vector required. Demand and choice is further complicated by the fact that certain viral vectors come in a variety of serotypes that affect their tissue tropism for human organs, tissues, and cells types.

11.3.2  Furthermore, when applied to development and manufacturing activities, serotype-specific differences present distinct challenges and considerations that can affect pricing. For example, AAV serotype 2 is very sticky and prone to aggregation, requiring increased DSP optimization (increasing time and cost in process development), while AAV serotype 8 is easier to manufacture but exhibits reduced transduction efficiency (increasing demand requirements and optimization of batch yields). Also, variations in nucleic acid sequence arising from the different therapeutic genes of interest can have dramatic effects on the behavior of the AAV viral vector during production, resulting in minor charge differences in AAV capsid chemistries and conformation that can have significant effects on downstream purification and overall yield.

11.3.3 At the ASGCT conference in May 2025, we surveyed CDMOs about the current state of the market. We shared with each that we have seen stiff price competition in the biologics market at scales <2,000 L as the funding for small biotechs has been restricted for 2023–2024 and asked if they have felt a correlating constriction. All of the CDMOs reported that securing projects from small biotechs — including IND-enabling and phase I batches — has been very challenging. Although cell and gene therapy projects do not see much of a reduced scale for early-phase projects, CDMOs have seen a marked shift in scope of their early-phase contracts. Customers are requesting smaller-scope engagements, and CDMOs are responding with projects categorized as feasibility studies, manufacturability assessments, or tox material supply. These lesser operations are performed on a smaller budget with the goal of generating data to support fundraising for the customer.  

11.3.4 One large CDMO even said they have lost contracts to competitors who are said to be doing work for free. It appears some larger CDMOs are performing IND-enabling development or manufacturing at no cost, on deferred payment terms, or in exchange for equity. The CDMO then gains a relationship with a potential client when funding picks back up. This offering, of course, is only possible for companies that have alternate sources of steady revenue — most commonly from commercial contracts.

11.4  Manufacturing Strategy for Clinical Development of Viral Vectors

11.4.1  In the most straightforward paradigm, there are three distinct approaches for the manufacture of the host cell for the generation of viral vectors. The first involves adherent cell culture, where monolayers of cells are grown either in plastic disposable flatware or in a bioreactor like the iCELLis™ system in which the cells grow on a 3D matrix composed of fibers or beads or a cross-linked porous structure. The next approach is based on manufacture in stirred-tank reactors of intermediate scale 10–50 L up to 200–500 L of working volumes. In these reactors, cells are growing in suspension and viral vectors are produced most commonly via transient transfection with plasmid DNA, although a producer cell line can also be used. The final approach, leading on from the second, involves the scale-up of the suspension-based processes to 2,000-L bioreactors, where some of the baculovirus systems have been scaled to or some of the producer cell line components have been scaled to. Triple transfection is also used at large scale, but the efficiency is often similar to what is achieved in 200-L to 500-L single-use bioreactors.

11.5  Current Pricing Trends and Market Dynamics

11.5.1  The majority of the CDMOs and SMEs that provided insight on the current market conditions and pricing trends reported that 2024 had been a buyer’s market. As detailed earlier in the report (see sections 1.4: The 2022–2023 Funding Roller Coaster; 1.5: Funding Outlook, 2024–2025; 1.6: Pharma Market Outlook Includes Layoffs), there remain economic and political headwinds slowing the recovery of biotech funding. This has resulted in a general slowdown in the volume of CDMO outsourcing in 2024. Within the viral vector CDMO sector, the competition to both retain existing and win new biopharma clients is extremely fierce.

11.6  Development and Manufacturing of Viral Vectors — 2024 Pricing Matrix

11.6.1  The general consensus from all questioned was that overall the pricing for viral vector development and manufacturing services has remained relatively consistent over the last 24 months, based on CDMO list price, although the list pricing does not fully represent the actual pricing negotiated by each client within the current buyer’s market conditions.

11.7  Drug Product Filling Challenges

11.7.1  The viral vector supply chain consists of both stand-alone drug product (DP) CDMOs and integrated CDMOs offering drug substance (DS)/DP services; consolidated pricing for DP sterile filling from these CDMOs is presented in ^{Table 35}.