The past two years have been turbulent for the pharmaceutical sector. After enjoying years of record-breaking figures in terms of cash flowing into industry via initial public offerings (IPOs) and venture financing, as well as the number and value of deal transactions, many companies are now sensing a new reality, without ‘tourist’ investors and soaring stock markets. Here, we analyze selected aspects of the deal and financing landscape for cell and gene therapy (CGT) to provide an idea of how it has developed between the start of the first quarter (Q1) of 2021 and the end of Q2 2022.
Trends in the financing landscape
Fig. 1 | Cell and gene financing trends. Equity offerings and venture financing from H1 2021 and H1 2022.
Comparing the size and volume of capital raised in the first half (H1) of 2021 and H1 2022 shows the increasing difficulty the CGT sector is experiencing in attracting financing, with data revealing a decline in the size of equity offerings, including IPOs, secondary offerings, private placements, rights offerings and spin-offs (Fig. 1). The number of equity offerings in H1 2021 was almost three-fold that in H1 2022 and the total value was more than seven-fold higher: $6.8 billion compared with $0.9 billion.
From an investment perspective, public companies have experienced a difficult start to 2022 compared to privately held companies. Public companies have attracted fewer and smaller capital investments compared to the previous year, with total capital raises and total value decreasing by 73% and 88%, respectively. Investment into privately held entities was not affected as much, with the number of deals remaining consistent over the two time periods and the value decreasing by 20%. Many private companies have the luxury of venture capitalists (VCs) or other big investors focusing their efforts on keeping their portfolio companies afloat in difficult times, which could explain the less severe downward trend in their financing.
Stock markets around the world have declined substantially recently, and public CGT companies have not been immune to the downturn. For example, out of nine US CGT companies that have their most advanced candidate in phase 3 trials, eight have had a significant drop in share price since the beginning of 2021, with a median fall of 55% (Table 1).
Table 1 | Share price changes of cell and gene companies
Companies |
Delta H1 2021 |
Delta H1 2022 |
Total period delta |
MeiraGTx Holdings |
0% |
−68% |
−51% |
Athersys |
−20% |
−75% |
−86% |
Abeona Therapeutics |
−8% |
−43% |
−88% |
BioCardia |
13% |
−27% |
−59% |
Capricor Therapeutics |
37% |
10% |
−7% |
Therapeutic Solutions International |
541% |
−40% |
228% |
AlloVir |
−50% |
−71% |
−90% |
BrainStorm Cell Therapeutics |
−16% |
−34% |
−39% |
Average |
62% |
−44% |
−24% |
Median |
−4% |
−41% |
−55% |
Trends in the deal landscape
Fig. 2 | Cell and gene strategic alliances and merger and acquisition (M&A) deals trends of H1 2021 and H1 2022. a, Strategic alliance deals. b, M&A deals.
The tougher financing landscape does not yet seem to have negatively influenced dealmaking in the CGT field, based on strategic-alliances data and mergers and acquisitions (M&A) deals made in H1 2021 and H1 2022 (Fig. 2a, Table 2). Although the number of strategic-alliance deals was similar between H1 2021 and H1 2022 (110 and 103, respectively), the total deal value increased more than threefold. This might reflect the fact that many larger companies were accumulating funds during 2021, leading to pressure to make deals and greater competition for promising assets.
Looking at M&A deals with disclosed financials, however, both the number and the value decreased (Fig. 2b, Table 3). Conclusions from this dataset should be drawn with caution though, given the small number of deals overall, with 14 and 10, respectively, during the two periods analyzed.
Oncology dominated strategic-alliance dealmaking over the time periods studied, driven by dealmaking for gene-modified cell therapies such as chimeric antigen receptor T cells (CAR-T cells) and other cell therapies (Fig. 3a, b). For example, in January this year, Bristol Myers Squibb and Century Therapeutics signed a deal worth up to $3 billion, including a $150 million upfront cash and equity investment, for the development of anticancer therapies derived from Century’s induced pluripotent stem cell (iPSC) platform (Table 2).
Table 2 | Top 20 strategic-alliance deals in the cell and gene industry in H1 2021 and H1 2022
Principal and partner companies |
Projected deal amount ($ million) and date |
Deal summary |
BMS; Century Therapeutics |
3,000 (January 2022) |
Century partners with BMS to develop up to four induced pluripotent stem cell (iPSC)-derived, engineered natural killer cell (iNK) and/or T cell (iT) programs for the treatment of hematologic malignancies and solid tumors. Two programs include one targeted to AML and one to multiple myeloma. |
Takeda Pharmaceutical; Code Biotherapeutics |
2,000 (February 2022) |
Takeda signs deal with Code Biotherapeutics to develop gene therapies using their proprietary targeted 3DNA non-viral genetic medicine delivery platform. Both companies will share research activities up to candidate selection. Takeda will take over further development and commercialization. |
Novartis; Voyager Therapeutics |
1,640 (March 2022) |
Novartis signs agreement with Voyager to potentially license novel AAV capsids from Voyager’s RNA-driven TRACER for gene therapy programs targeting three undisclosed initial CNS targets. Further capsids may be accessed at a later date. |
Novartis; Precision Biosciences |
1,475 (June 2022) |
Precision signs gene editing deal with Novartis, whereby Precision will develop a custom ARCUS nuclease able to insert a therapeutic transgene at a 'safe harbor' location in the genome for diseases such as certain hemoglobinopathies including sickle cell disease and beta thalassemia. Novartis will develop the one-time treatment option therapy. |
BMS; Immatics |
1,460 (June 2022) |
Immatics expands a deal with BMS to develop delta gamma allogeneic off-the-shelf TCR-based therapy and/or CAR T programs. The companies will develop two programs owned by BMS and both companies will hold an option for developing up to four additional programs each. |
Vertex Pharmaceuticals; Obsidian Therapeutics |
1,375 (22 April 2021) |
Vertex partners with Obsidian to discover controllable genetic therapies to treat serious diseases, using Obsidian’s proprietary cytoDRiVE platform. Obsidian could receive up to $1.3 billion in potential payments based upon the achievement of specified milestones across up to five programs. |
Pfizer; Beam Therapeutics |
1,350 (January 2022) |
Beam will combine its mRNA delivery technologies with Pfizer’s development and manufacturing expertise in a deal to develop in vivo base editing programs for up to three targets for rare genetic diseases of the liver, muscle and CNS. |
Takeda Pharmaceutical; Ensoma |
1,250 (February 2021) |
Takeda receives license to Engenious vectors from Ensoma for up to five rare disease indications in this partnership. In addition to a $100 million upfront payment, Ensoma is eligible to receive up to $1.25 billion from Takeda if the five programs are successful. |
Selecta Biosciences; Ginkgo Bioworks |
1,100 (January 2022) |
Selecta partners with Ginkgo to advance novel therapies for rare and orphan diseases, utilising both Ginkgo’s high-throughput screening and cell engineering capabilities and Selecta’s ImmTOR platform. |
Bayer; Mammoth Biosciences |
1,040 (January 2022) |
Mammoth will combine its novel CRISPR systems with Bayer's drug development expertise in this partnership to develop in vivo gene-editing therapies. |
ONK Therapeutics; Intellia Therapeutics |
920 (February 2022) |
This deal allows ONK non-exclusive rights to Intellia’s ex vivo gene editing platform on top of exclusive rights to specific guide RNAs for up to five NK cell therapies for various cancers. Intellia can also opt in to co-develop and co-commercialize up to two cell therapies with lead rights in the United States. |
BioNTech; Crescendo Biologics |
790 (January 2022) |
BioNTech signs deal with Crescendo to develop novel precision immunotherapies for cancer including mRNA-based antibodies and engineered cell therapies. The deal brings together BioNTech’s multimodal immunotherapy expertise with Crescendo’s proprietary Humabody VH platform. |
Spark Therapeutics; Senti Biosciences |
645 (April 2021) |
Senti Bio partners with Spark to apply its gene circuit technology platform to develop promoters for use in developing certain CNS, eye or liver-directed gene therapies. Spark Therapeutics has the option to exclusively license a number of synthetic promoters. |
AbbVie; Capsida Biotherapeutics |
620 (April 2021) |
AbbVie partners with Capsida to use it AAV engineering and cargo development platform to develop tissue-targeted gene therapies for various disease types. |
Novo Nordisk; Heartseed |
598 (June 2021) |
Novo Nordisk partners with Heartseed to develop stem cell-based therapy HS-001 for heart failure. Novartis will have rights to develop and commercialize HS-001 worldwide except in Japan, where Heartseed will keep the rights. |
AbbVie; Caribou Biosciences |
340 (February 2021) |
Caribou signs agreement for the development of two new CAR-T cell therapies directed to targets specified by AbbVie. AbbVie will apply Caribou’s Cas12a chRDNA genome editing and cell therapy technologies to the selected targets. Caribou will conduct certain preclinical research and manufacturing activities, whilst AbbVie is responsible for all clinical development and manufacturing. |
Cartherics; ToolGen |
133 (June 2021) |
Cartherics signs licence deal with ToolGen to access its gene editing technology to develop autologous gene-edited CAR-T cells and allogeneic gene-edited CAR-NK cells derived from induced pluripotent stem cells (iPSCs) in order to assist the ability of a patient’s immune system to fight cancer. |
Biogen; Ginkgo Bioworks |
120 (May 2021) |
Biogen collaborates with Ginkgo to develop a next-generation AAV production platform to aid the production of gene therapies. Ginkgo will receive a $5 million upfront payment and is eligible for up to $115 million in further milestones. |
Takeda Pharmaceutical; KSQ Therapeutics |
100 (January 2021) |
Takeda partners with KSQ to develop and commercialize novel immune-based therapies for cancer. KSQ has granted Takeda an exclusive, worldwide license to develop, manufacture and commercialize cell and non-cell therapy products that modulate targets identified using KSQ’s CRISPRomics technology. |
Apellis Pharmaceuticals; Beam Therapeutics |
75 (June 2021) |
Beam and Apellis collaborate to develop six programs aimed at the complement protein C3 and other targets in the complement pathway for the treatment of diseases of the eye, liver and brain. The companies may extend the deal for up to two years for any or all six of the programs. |
Looking only at deals concerning gene-therapy assets, ophthalmology and genetic diseases are the most common areas in both years, with gene therapies constituting half or more of the deals made in these areas. This is probably due to several past successes, such as the pioneering Food and Drug Administration (FDA) approval of Luxturna (voretigene neparvovec) for a rare inherited form of vision loss in 2017, as well as the feasibility of local administration for diseases of the eye.
All of the top 10 strategic-alliance deals involving CGT assets in 2021 and 2022 are discovery or preclinical stage (Table 2). Furthermore, there is a strong trend for buyers to invest in platform technologies or portfolios of assets, both in terms of number and total value of deals. Indeed, most of the top strategic-alliance deals in both H1 2021 and H1 2022 are connected to a platform (Table 2). This strategy allows for de-risking by not making all bets on one asset and has the potential to produce multiple assets for which the focus can be pivoted over time. A platform deal can also provide the acquirer with more control from the start, which can be beneficial in capital-intense areas like CGT, which require advanced manufacturing methods.
The only single-asset deal (that is, a deal not involving a platform or use of a platform) in the top 10 deals by value during both time periods is the partnership between Heartseed and Novo Nordisk announced in June 2021 (Table 2), through which Heartseed could receive up to $598 million, including $55 million in upfront and near-term milestone payments. The deal centers on Heartseed’s HS-001, a preclinical-stage allogeneic cell therapy targeting the lucrative market of heart failure that uses iPSC-derived purified ventricular cardiomyocytes, which probably justifies the significant deal value.
Fig. 3 | Top 5 therapy areas and latest development stage distribution of deals made in H1 2021 and H1 2022 respectively. a,b, Top therapeutic areas. c,d, Development stage of deals.
Strategic partnership deals were generally made at earlier stages of asset development in 2022 than in 2021; discovery and preclinical deals account for 71% versus 60% in the two years (Fig. 3c, d). This correlates well with the platform focus seen in major deals; however, it could also be a trend that will continue due to decreased budgets as a result of the financing landscape and companies trying to get more ‘bang for the buck’ by acquiring earlier-stage assets.
Table 3 | Top 10 merger and acquisition deals in the cell and gene industry in H1 2021 and H1 2022
Companies |
Projected deal amount ($ million) and date |
Deal summary |
Soaring Eagle Acquisition; Ginkgo BioWorks |
2,500 (May 2021) |
Soaring Eagle Acquisition is to combine with Ginkgo BioWorks. The combination of the two companies is predicted to provide $2.5 billion of gross cash proceeds. |
Cellect Biotechnology; Quoin Pharmaceuticals |
1,900 (March 2021) |
Cellect, a developer of stem cells, has announced it will merge with privately-held rare disease company Quoin Pharmaceuticals. |
Beam Therapeutics; Guide Therapeutics |
825 (February 2021) |
Base-editing therapy developer Beam acquires Guide Therapeutics, a developer of advanced lipid nanoparticles for delivery of genetic therapies, paying $120 million upfront. |
Charles River Laboratories International; Vigene Biosciences |
804 (May 2021) |
Charles River Laboratories signs agreement to acquire Vigene Biosciences, a gene therapy contract development and manufacturing organization (CDMO) that develops viral vector-based gene delivery solutions. |
UniQure; Corlieve Therapeutics |
801 (June 2021) |
UniQure buys Corlieve, a French company with a leading gene therapy program AMT-260 that uses miRNA silencing technology to treat temporal lobe epilepsy, for €46 million ($55 million) upfront. |
UCB; Zogenix |
440 (January 2022) |
UCB acquires Zogenix to build on its epilepsy portfolio. Through the acquisition, UCB will gain Fintepla (fenfluramine), a treatment for seizures associated with Dravet syndrome in patients two years of age and older that has recently been approved by the US Food and Drug Administration (FDA). |
Social Capital Suvretta Holdings; ProKidney; Social Capital Suvretta Holdings Corp III |
350 (January 2022) |
Prokidney, a developer of cell therapies for kidney disease, is to merge with Social Capital Suvretta Holdings. |
Global Cord Blood Corporation (GCB); Cellenkos |
297 (April 2022) |
GCB is to acquire cord blood specialist Cellenkos, which uses umbilical cord blood to develop products to treat autoimmune and inflammatory diseases. |
Fujifilm Holdings; Atara Biotherapeutics |
100 (January 2022) |
Fujifilm acquires a cell therapy manufacturing facility from Atara Biotherapeutics for $100 million. The facility has capabilities to produce clinical and commercial cell therapies, including allogeneic T cell and CAR-T cell immunotherapies. |
Cend Therapeutics; Caladrius Biosciences; Lisata Therapeutics |
90 (April 2022) |
Caladrius Biosciences merges with Cend Therapeutics to create Lisata Therapeutics. The new company will focus on the development of the Cend platform technology to create therapies for a range of oncology indications. |
Outlook
Continued difficulties in fundraising are anticipated in the near term, which could lead to an increase in M&A activity. This might be most applicable to small- and mid-sized CGT companies that can find pipeline and technology synergies with similarly sized enterprises.
Furthermore, large platform-focused deals are expected to continue to dominate in terms of value, and might become even more common in more difficult financing times due to their de-risking potential. Another aspect of de-risking is the phase of assets involved in deals. The pharma sector has generally moved towards later-stage assets in challenging financing times; however, in CGT, deals in early phases are increasingly popular, due to previously highlighted mitigated risk strategies.
The CGT space keeps breaking ground and continues to hold promise for treatment paradigm shifts. The high-value deals made in the past two years are clear indicators that pharma is willing to invest in the CGT ecosystem and trusts that uncertainties such as pricing and safety will be resolved over time. However, with market conditions rapidly changing, it will be interesting to see who will flourish and who will not.
