Cracking the Commercial Code for Cell and Gene Therapies

This year has seen two prime exemplars of the challenges that face the cell and gene therapy sector: Sarepta Therapeutics and bluebird bio. Despite having products on the market and once being valued north of $10 billion, both took disastrous turns in recent months, as Sarepta’s market cap plummeted to just over $1 billion while bluebird was scooped up by two private equity firms for just under $50 million.

Embroiled in a saga of patient safety, Sarepta’s fate as a company is now uncertain. But so too is the future of bluebird’s products, as the new owners, including the massive Carlyle Group, take over operations.

The fates of the two companies highlight the ongoing challenges that face the CGT space more broadly. At a BioSpace-moderated panel at the BIO Convention in Boston this summer, experts mulled over what needs to happen to make this new class of medicines successful in the long term. Major considerations discussed included decentralized manufacturing and its regulation, factors that could lower prices and expand access, and the potential impact of tariffs. As the field advances on these fronts, all eyes will be on the companies trying to bring these therapies to the patients who need them.

“I think the Carlyle purchase of bluebird is super interesting,” said panelist Jason Foster, CEO of Oribiotech. “The commercial viability question is still out there, so a very interesting case study for us to watch is: Can we take a failed product and company or set of products and turn it into something that’s commercially viable using this next generation of technologies?”

Those next-gen technologies exist largely on the manufacturing side of the CGT ecosystem, both in terms of production itself and how that production is regulated, Foster and his fellow panelists at BIO agreed. And industry is starting to recognize the importance of this part of the equation.

“Companies are coming to us, even early companies now, and having that conversation with us from the very beginning,” ElevateBio CEO Mike Paglia said.

Foster emphasized that timing is everything. “You have to figure out the economics first,” he said. “That means, before you get into the clinic, fix your manufacturing.”

Beyond that, the panelists in Boston said, are bigger conversations about lives and costs saved by CGT over the long run. But the industry must be prepared to scale.

“These therapies work,” Foster said. “I think we could make the economics work, but we can’t rely on decade-old technologies and decade-old methodologies.”

In late July, the U.K.’s Medicines and Healthcare products Regulatory Agency (MHRA) launched a new regulatory framework for decentralized manufacturing. In a series of guidelines published in advance of the launch, the regulator discussed how to implement new modular manufacturing and point of care legislation passed in January, including obtaining marketing authorization for the designation and the application of good manufacturing practices in far-flung facilities.

Foster applauded the MHRA’s initiative. “Anything that enhances our flexibility is a good thing,” he said at BIO, noting that Ori is agnostic to the location of manufacturing. He explained that MHRA is one of the only regulatory agencies in the world to have established such a framework. The FDA released commentary on decentralized manufacturing in November 2023—“some of it was helpful, some of it wasn’t as helpful,” Foster summarized—but no formal guidelines have been released or implemented in the U.S.

The advantages of distributed manufacturing include shortening so-called vein to vein times to get patients, often terminally ill, treated more quickly and without needing to freeze cells for shipping. But this manufacturing model also carries challenges. “I see decentralization as a method to hopefully improve accessibility, but it requires quite a lot of innovation,” Foster said.

One challenge is consistency in manufacturing approaches across manufacturing sites. Foster noted that existing challenges in replicating processes within a single site become exponentially harder when multiple facilities are involved. “So you need automation, you need digitization,” he said. “You can’t do this on paper.” Panelists repeatedly spoke of the need to get away from paper batch records, which are still used despite their limitations.

“It really comes down to control,” Paglia agreed. “When you move into multiple sites and multiple locations, [it becomes] difficult to standardize those procedures and policies.”

Additional challenges come with the regulatory oversight of multiple locations. Foster contended that it’s impractical to expect a regulator to oversee “every single spoke just as if it was its own facility.” Rather, he said, the hub could be responsible for the quality of each spoke. “There’s some regulatory innovation required to really do this in the right way,” he said.

Another critical lever in the process is quality control, said Mayo Venture Partner Audrey Greenberg. She pointed to Sarepta and Novartis as two examples of gene therapy makers that have gotten “dinged almost at the finish line” due to evolving FDA requirements for more-rigorous potency assays. Lacking global regulatory harmonization, she said, quality assurance “is one of the most difficult, if not most, expensive [considerations] from both a timeline as well as a regulatory perspective for cell and gene therapy.” Especially in the U.S., she added, “the constant regulatory changes within the FDA in terms of what’s deemed to be acceptable have also caused a lot of uncertainty.”

Greenberg continued, “Having harmonization will help the patients, will help the drug manufacturers expedite that path to approval and certainly provide more transparency . . . from an investor perspective, and bringing more dollars into the space.”

The scaling problem is quickly approaching critical mass. Cell therapies in cancer are rapidly moving toward first-line approvals, with J&J and Legend Biotech’s Carvykti getting the greenlight as a second-line therapy last year and Yescarta from Gilead’s Kite Pharma expected to be approved as a first-line therapy by year’s end, according to Foster. Cell therapy developers are also now eyeing much bigger patient populations with autoimmune disorders.

“All the big boys—BMS, Novartis, AstraZeneca—they all have plays in autoimmune,” Foster said. “The data looks really good.”

While these advancements demand improvements in manufacturing, they simultaneously provide the means to drive that innovation. “What consistently brings down price is competition,” Foster said. “So if we’re able to bring more products to market more quickly in the same or similar indications, you’ll see prices go down.”

He predicted that automation and other advances will allow manufacturers to lower the cost of goods for some cell therapies to $30,000–$35,000, cheap enough to “very reliably deliver front line therapy,” he said. “We’ve got line of sight of that.”

Courtney Rice, principal at Acadia Strategy Partners, agreed that the drive into bigger patient populations will support CGT’s progress. “Whether it’s MS or lupus, or wherever this expands, I think then we start to get critical mass, and maybe that’s when the infrastructure follows,” she said. “The demand itself will back all the way up that supply chain and make things possible.”

The pharmaceutical industry has been here before with the advent of monoclonal antibodies (mAbs). As with CGT now, the explosion of mAbs demanded advancements in manufacturing. “There is a direct parallel with mAbs in that about 10 or 15 years into the journey for biologics . . . the costs were too high,” Foster explained. “Then you saw single-use bioreactors come online. You saw stable cell lines come online. You saw . . . innovation that actually drove the cost down.”

For CGT, he continued, “there is a new phase of innovation required and happening to have that same leap occur.”

The problem now is framed by the unique challenges associated with developing truly personalized medicines with a so-called circular supply chain that starts and ends with the patient. “How do we mass produce a personalized medicine?” Foster mused. “Just sounds counterintuitive, mass-producing personalized medicine, but we can do it, and we can do it now through innovation.”

Paglia agreed, joking that he felt like “the old guy in the room” as he interacted with his younger colleagues who “have grown up in the age of AI.” He said this younger generation is thinking about manufacturing in entirely different ways—not just production processes but regulatory ones. He noted that Elevate now employs someone with a PhD in regulatory science. “[It’s] just unprecedented times on the availability of technology that we have,” he said.

Even at higher volumes and lower costs, though, CGT makers have to work harder to communicate the value of their products to payers, the panelists concurred. “We’ve all heard people say the first finish line is approval, but the real finish line is payers,” Rice said. “And I think that is true.” To this point, she continued, “we’ve done such an interestingly bad job at communicating value. We haven’t told a good story.”

That story, of course, is that these life-saving treatments save payers money in the long run, with patients needing far less medical intervention after receiving a cell or gene therapy. “We need to do a better job of packaging [the initial high price tag] in a palatable way to payers,” Rice said.

Getting the CGT sector on track to commercial viability will also require improvements in the funding environment, Greenberg added. “We need the capital markets to open up a bit more first, and hopefully simultaneously, see the science progress . . . not just therapeutic progression, but also in terms of manufacturing technologies.”

The panel discussion also touched repeatedly on the potential impact of tariffs. A new trade deal between the U.S. and the European Union will carry 15% taxes for pharmaceutical imports, while President Donald Trump continues to threaten additional pharma-specific levies, most recently of up to 200%.

Paglia said it is now a daily conversation with ElevateBio’s clients, regarding the potential effects both on costs and availability of products. “The clients are always worried about supply,” Paglia explained.

Foster said that tariffs will likely affect cost, and “we’ll have to deal with it in some way, through price or through cost reduction.” But on a broader scale, “the nature of supply and the global footprint of this industry sort of remains unaffected, in my view, so we just need to plan for it.”

Greenberg added that the onshoring of manufacturing in the U.S. will likely also continue. “I don’t see that as cyclical.” Still, she was blunt when it came to the matter of import levies. “Tariffs are geopolitical warfare,” she said, “and it’s a way for the U.S. to gain dominance in whatever particular modality Trump has in mind at the moment.”

Looking further into the future, the panelists were optimistic about the industry’s ability to grow CGT’s reach. As the science evolves to better support mass production that is reliable and reproducible, they said, the technologies will find their way to the patients who need them.

“The scale problem,” Paglia said, “is starting to get solved.”