The landscape of 21st century medicine is one in which cutting edge technological advances have given hope to patients suffering from serious diseases which were previously seen as difficult or impossible to cure. One of these advances is in the field of gene therapy. While the concepts of gene therapy arose in the 1960s, the invention and development of recombinant DNA techniques in the 1970s led to the therapy being broadly applicable by the turn of the century.
Gene therapy enables doctors to treat medical disorders through altering a patient’s genetic expression. Some prominent gene therapy mechanisms include creation of a healthy copy of a gene to replace a disease-causing one; suppression or inactivation of a disease-causing gene; and the introduction of a modified gene to combat a disease.
Advances in gene therapy are leading to novel approaches and innovative applications. An example is genome editing (also known as “gene editing”), a technique which uses molecular tools to modify existing DNA (by adding, removing, or altering genetic material at particular locations in the genome). Studies show gene therapy to be a promising treatment for diseases including cancer, macular degeneration, diabetes, and cardiovascular disorders.
Business Potential with Continued Growth
The rapidly advancing field of advanced therapeutics and gene delivery technologies has created an intensely competitive environment with med-tech companies vying to commercialize their gene therapy products. Gene therapy developers and small pharmas seek M&As and collaborations with giant biopharma firms as this gives the latter deeper options for enriching their in-house knowledge and bolstering their product portfolio.
Currently, over 900 gene therapy firms are focused on developing advanced gene-base treatments. More than 1,000 cell and gene therapy (CGT) clinical trials are being conducted, with industry observers predicting a “tsunami of approvals,” with up to 60 new CGTs potentially launching within the next 10 years and treating an estimated 350,000 patients in the United States alone.
An Expanding Global Market
In this intensifying business context, the global gene therapy market is poised to more than double within the next four years. An early 2022 report from the market research firm Global Industry Analysts (dba StrategyR), shows the sector growing from $1.2B in 2020 to $2.7B by 2026, at a 19.5% CAGR.
In 2020, gene and cell therapy companies received a record-breaking $20B in funding; 2021 saw that figure eclipsed with a total of $23B invested in gene therapy development.
Global venture funding particularly increased in 2021, with gene therapy startups receiving nearly $10B, representing a 73% increase from 2020. Furthermore, 16 new startups raised at least $50M in initial public offerings in the US markets.
Moreover, the number of venture capital (VC) deals for companies developing gene editing technologies has increased significantly since 2012. In 2021, the total value of VC deals exceeded $1.3B, representing over 250% more than the $500 raised in 2020.
Despite substantial signs of dynamic growth in this segment of the health and medical space, challenges abound. Opposition to gene therapy on religious grounds is one, with religious groups arguing that altering an individual’s genetic makeup is an unnatural process, with doctors and scientists getting “to play God“. On the other side of the spectrum are scientific ethical concerns. Scientists argue that DNA changes introduced to a patient can be passed onto their offspring, with unknown and potentially harmful effects. Others argue that receiving gene therapy treatments for “enhancements“, rather than as treatment for a disease, is unethical.
Access is also a major ethical issue. Treatments are expensive, which could result in “gene editing … out of reach for all but the richest” with human genome editing therapies priced between $373K to $2.1M. In addition, a number of gene therapies are only limited to 2,000 patients.
Notable Collaborations, M&As and VC Deals
Nevertheless, the vertical is on the verge of hyper-growth. Suggestive of this are the following significant acquisitions and fundings in the gene therapy space:
- 64x Bio received $55M from a financing round headed by VC firm Lifeforce Capital to enhance production of gene therapies (currently on trial) for a growing number of disorders (January, 2022).
- Bayer enters collaboration partnership with Mammoth Biosciences for their CRISPR technology, which will be used to develop in vivo gene-editing therapies (January, 2022).
- Thermo Fisher acquired PeproTech for $1.85B, enhancing its capabilities in gene therapy and adding new capabilities to its existing biotech offerings (January, 2022).
- Novartis acquired Gyroscope Therapeutics for $1.5B, bolstering its gene therapy portfolio with Gyroscope’s experimental drug for treating retinal atrophy (December, 2021).
- ElevateBio raised $525M in a Series C funding round led by Matrix Capital Management. The fund will be used to further expand ElevateBio’s R&D and manufacturing capabilities in cell and gene therapies (March, 2021).
Capitalizing on this New Frontier
Gene therapy is undeniably an important emerging field in pharmaceuticals, biotechnology, and life sciences, with deep potential in multiple domains—individual health, medical institutions, business, societal well-being and progress. The sector has been the arena of the most revolutionary advances in medical treatment in recent years, with a flurry of new gene therapies and products with demonstrable potential to usher in the next paradigm shift in medicine.
The substantial increase in private capital for companies operating in the space reflects the strong potential investors see in the market. Investors and companies will soon be able to leverage data and results from the conclusion of clinical trials, entering the market with a more deliberate, data-driven approach.
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Sources: FDA, Medline Plus, Barrons, BioPharma Dive, Pharmaceutical Technology, Globe Newswire, Deloitte, Research Gate, Oxford Scientist, The CSR Journal, Nature, Biospace, Chemical & Engineering News, Reuters, TechCrunch, Wall Street Journal
Get in touch with the Finalis Insights Team at insights@finalis.com to learn how Finalis can help you stay up-to-date with your industry.
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