Sunday, January 23, 2022

Europe surpasses US in 2021 despite record gene and cell therapy funding

Cell and gene therapy developers set an all-time annual record globally in 2021. However, European firms missed out on the funding increase.

Companies developing cell and gene therapies around the world will raise €20.1B ($23.1B) in 2021, the advanced medical advocacy organization Alliance for Regenerative Medicine (ARM) said at a briefing this week. The bumper catch took the 2020 total to €17.3B ($19.9B) by 16%.

Year-by-year funding from cell and gene therapy developers globally. credit: ARM

The growth from 2020 to 2021 was primarily driven by companies in the US. With a new €15.7B ($18B) in the bank, US-based companies saw an impressive 53% jump in investment compared to 2020. In contrast, their European counterparts raised 8% less funding, compared to €2.9B ($3.3B). in 2020.

ARM Advanced Therapy Funding 2021 by Geography
Funding was raised in 2021 by the developers of cell and gene therapy by region. YoY: Year after year from 2020. credit: ARM

ARM’s director of public affairs, Stephen Majors, said both European and American gene and cell therapy players have seen record funding growth in 2020 compared to 2019. However, it is too early to establish why European and Asian companies do not match the rapid cash growth seen in the US in 2021.

,We’ll take a closer look next year to determine what causes this and whether they are region-specific.“said the Major.

Still, said Antoine Papiernik, president and managing partner of venture capital (VC) firm Sofinova Partners, the funding numbers need to be interpreted in the right context. European contributions to cell and gene therapy are enormous.

,It’s not about how much you raise in a year; It is about the level of expertise, competencies and technologies,” said Papernick.These are the fundamental principles for long-term excellence and growth, which we strongly believe in,

,If there is one area where Europe is, undoubtedly, on par with the US, it is in new modalities, including gene and cell therapy.,

Among the various funding sources going to cell and gene therapy, VC funding grew the most in 2021, with a 73% increase to €8.5B ($9.8B). This trend mirrored the flood in life science VC funding over the past year.

Simultaneously, gene and cell therapy companies were hit by struggling stock markets, affecting the rest of the biotech sector. This mismatch is creating a surge in funding for VC firms and potentially limiting exit options.

,Inflation concerns make it especially difficult for small, early-stage companies that are not yet profitable.,” said the Major.If inflation concerns ease in 2022, and with a positive data readout, we could see strong performance for the biotech public equities.,

When broken down by the types of technology funding the total, cell therapies in immuno-oncology such as CAR-T cell therapy saw the biggest funding growth: a 26% jump since 2020. This was followed by gene therapy firms with 14. % more incoming cash, and tissue engineering players, whose investments increased by 10%.

ARM Advanced Therapy Funding 2021 by Modality
The technology raised funds globally in 2021 by developers of cell and gene therapy. YoY: Year after year from 2020. Cell IO: Cell therapy in immuno-oncology. credit: ARM

Cell therapy companies outside immuno-oncology experienced a difficult year to finance in 2021 compared to 2020, taking in 15% less funding at €1.7B ($2B). However, Majors told me that funding to the sector has fluctuated regularly over the past several years.

,Compared to historical trends, the shortfall in 2021 is not external,“Majors noted.”Due to the small size of this technology segment, just one or two financing deals can have a major impact on the overall financing on an annual basis.,

Another important trend in ARM’s report was the increasing importance of gene-editing technology. Of the total gene therapy funding, 45% was raised by companies developing gene-editing technology, up from 38% in 2018.

Investor interest in gene editing has been fueled by the clinical successes of leading gene therapy players in the past year. An example from June 2021 was the promising demonstration of an in vivo CRISPR treatment developed by Intellia Therapeutics and Regeneron in patients with the rare disease transthyretin amyloidosis.

Gene-editing firms CRISPR Therapeutics and Vertex Pharmaceuticals are generating excitement with advances in tackling the blood disorder sickle cell disease. They are preparing to file for approval of their CRISPR gene-edited therapy for this condition in late 2022.

,Investors have taken note of these early successes and see the potential of this approach to treat a wide range of diseases, including:“said the Major.”Also, as this technology progresses, the number of companies with at least one clinical or preclinical asset in gene editing continues to grow.,

Another consequence of looking forward to gene and cell therapy in 2022 is a potentially record number of drug approvals. A slew of gene therapy hopefuls, including GenSight, uniQure, and BioMarin, are set to bring their candidates to the regulatory finish line in the US and Europe.

ARM Advanced Medicine Approval 2022
Upcoming approvals of cell and gene therapy in 2022. credit: ARM

,The EMA is set to make decisions on treatments targeting aromatic L-amino acid decarboxylase deficiency, Leber hereditary optic neuropathy, and two types of hemophilia.,” said the Major.By the end of 2022, the number of EMA-approved gene therapies for rare diseases could double from a year ago.,

However, some of the major hurdles for this field will be the possibility of determining the correct dosage, as well as the delivery of gene and cell therapies to their targets in the body. Creating these complex treatments is also a major hurdle many startups aim to tackle.

Additionally, the withdrawal of Bluebird Bio’s gene therapy from Germany in May 2021 due to pricing disagreements shows that regulatory approval is just the beginning for developers of gene and cell therapies. Their pricing strategy will need to be tight-lipped while avoiding conflicts with health care systems.

In any case, European companies will continue to play a strong role in the development of the cell and gene therapy sector.

,Don’t forget that the first gene therapy to be brought to market was European,“Papernick is referring to the gene therapy Strimvelis, which was sold by GlaxoSmithKline to Orchard Therapeutics in 2018.

,Europe continues to excel in the development of gene and cell therapies and has never had more opportunities for investment.,

Cover image via Elena Resco. Inline images via Alliance for Regenerative Medicine

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