Cell and gene therapy trends for US equity investors

Interviews were held with a former director at Thermo Fisher Scientific, a former director at a biomedical research organisation, and a former executive at Catalent respectively. Third Bridge Forum is part of Third Bridge’s integrated research offering that also includes Community, Maps, and Primers and Tearsheets.

Manufacturing developments

Cell & Gene Therapy Sector – Influential Manufacturing Developments & Pertinent Competitive Dynamics – Former senior director at Thermo Fisher Scientific 

• A former senior director at Thermo Fisher Scientific told us the level of maturity and standardisation for gene therapies is much more advanced than cell therapies, and that completing adeno-associated virus gene therapy manufacturing is a greater concern for CDMOs.
• We also heard the development of closed manufacturing systems is important, as they help to alleviate cell contamination risk. Automation and conducting in-line analytics are still technical challenges.
• On competitive dynamics, Resilience “can absolutely compete” against Catalent, we were told, as it has raised sufficient funds and is attempting to build proprietary and in-house technologies vs others. However, it is “not there now.”
• The specialist also said they “expected gene therapies to get insourced” by larger pharma companies, thus reducing CDMO business. On the cell therapy side, they “would have expected outsourcing to pick up”.

Gene therapy delivery methods

Gene Therapy Delivery Methods – Viral & Non-viral Approach & Risk Mitigation Efforts – Director at a biomedical research organisation 

• In this Interview on gene therapy delivery methods, we heard there has been much focus on making gene therapy payments milestone driven. This would involve making those companies developing gene therapies responsible for the remaining cost if they fail to meet milestones. 
• The biomedical research director expects industry competition to increase, particularly for small disease indications, which can help reduce costs by having a player enter the market at a lower cost to win the market.
• We also heard companies are modifying capsids by changing residues on them so they are immune silent and do not elicit an immune response, thereby reducing unwanted effects such as issues with immune responses.
• Meanwhile, “actively novel capsids” are being investigated to offset risks associated with adeno-associated viruses. With muscle-targeted gene therapy, muscle-specific capsids are being developed so less goes to the liver, enabling a lower dose per kg.
• Manufacturing is the largest cost associated with the development of gene therapy, and testing is a major cost, as most products require “30 or 40 validated tests”.

Industry player: Catalent

Catalent – Operational Inefficiencies, Potential Danaher Acquisition Implications & Manufacturing Modality Expansion – Former executive at Catalent  

• Staffing challenges, an inability to reduce deviations and a lack of trained technicians are reasons for Catalent’s operational challenges, according to a former executive at Catalent. These issues have led to significantly longer lead times and client frustration.
• However, Catalent has made “great strides” in cell and gene therapy manufacturing, with monumental analytical investments and in-house development of plasmids and cell lines. Induced pluripotent stem cells “could be a big breakthrough” for the company, our expert said.
• Our specialist also believes the potential Danaher-Catalent merger makes sense. Catalent could benefit “from some additional [operational] management expertise from Danaher”, and Danaher would benefit from Catalent’s viral vector capabilities.
• Other than smoothening out operational inefficiencies, Catalent’s main priority should be facility utilisation. By H2 2023, Catalent “should be back to where we would expect to be.”