While the cell and gene therapy industry was hit by investment winds from the high levels seen in 2020 and 2021, there are signs that recovery may be underway, according to data presented Monday at 2024 Cell & Gene. Meeting on the Mesa by the Alliance for Regenerative Medicine.
The investment of 10.9 billion dollars in the first half of this year is already ahead of the 2019 900 billion dollars, Tim Hunt, CEO of the Alliance for Regenerative Medicine (ARM), which hosts the annual meeting, said in his welcome speech starting the three-day meeting.
However, both numbers pale in comparison to the $19.9 billion and $22.7 billion in investments made in 2020 and 2021, respectively, with levels dropping to $12 billion in 2022 and $12 billion in 2023.
For the cell and gene therapy sector, it has been a “very difficult” two to three years, Hunt said. “It’s been difficult for small preclinical organizations. It has been a challenge for platform companies. It has not been an easy environment.”
Hunt said that the approximately 11 billion dollars raised in the first half of 2024 – which “almost sink” all in 2023 – went to “the last companies” with the best clinical trials and human data.
“It’s a little bit of a story of haves and have-nots in our sector,” Hunt said. “The money is there. I think people know that. The problem is that most of it is locked up and is not flowing through VCs to startups. There has been a shortage of IPOs. “
However, ARM is optimistic “that the gears will start to open a little bit more as we see interest rates come down and other things stabilize,” according to Hunt.
A New Normal, Cell Therapies are on the Rise
In a panel on cell and gene therapy investing at the Summit on Mesa, David Lederman, managing director of capital markets at investment bank Chardan, admitted that the sector is starting to see a “meltdown”.
Jason Russell, managing director and global head of biotechnology at Morgan Stanley, said the fact that the Federal Reserve’s interest rate was cut in September “certainly has implications for some risk factors and access to capital” in the cell and gene therapy areas. .
“Of course we are in recovery. Things feel better than what they said in 2022 and 2023. The formation of capital for later stage assets is going well, “Russell said. “We are returning to an active market that can help support producers and investors in this sector.” This reflects the trends seen in the vast biotech industry.
However, Mizuho Securities analyst Jared Holz told BioSpace last month that if industry observers expected a rush of gold investments and IPOs as a result of the Federal Reserve’s final rate cut, it was. unlikely to happen.
“I don’t see the floodgates opening, because the last time we were firing 50 or more IPOs a year, a large portion was affected by that,” Holz said. “Be careful what you wish for. There are too many IPOs in this area which I think are very bad, with a reference to the publicly traded. “
At the Conference on Mesa this week, Russell acknowledged that many IPOs are arguably “unhealthy” and “not conducive to a truly efficient, long-term market.” So far, he said, there have been 15 biotech IPOs in 2024, including Kyverna Therapeutics’ raised. $319 million IPO in February to support its pipeline of anti-CD19 CAR T therapeutic candidates.
Scott Gottlieb, a former FDA commissioner and partner at New Enterprise Associates, said in a fiery speech at the conference that the work around autoimmune diseases and CAR T therapy is “exciting” for investors and could be at a turning point.
“In the next few years, I think that some work with CAR T in autoimmune diseases is so revolutionary that it will get a lot of attention,” Gottlieb said.
Jefferies analyst Kelly Shi in a detailed analysis on Monday for investors wrote that in 2024 more than 20 CAR T programs entered autoimmune trials and reading data shows that CAR T therapy “can achieve clinical benefits in many autoimmune symptoms” as “first data from management. programs have shown evidence of B-cell depletion and restoration of immunity, supporting the potential for drug-free survival of the cells.
Importantly, according to Shi: “The ability of CD19 CART to achieve drug-free remission remains a strong hypothesis to support the clinical development of this group of drugs.”
Overall, Hunt sees 2024 as “the breakthrough year for cell therapy” due to major advances. That’s translated into a big investment this year for cell therapy companies, including Capstan Therapeutics’ widely-listed company. $175 million Series B funding and ArsenalBio’s $325 million Series C funding last month, he said.
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