Gene therapy, with its offer of a possible cure for rare diseases like sickle cell, is losing early investors to higher-reward sectors like obesity and cancer, as sales for some of the new treatments fall short.
In the last year, some drugmakers have pulled back from the sector, including Pfizer, which recently stopped selling its gene therapy for hemophilia priced at $3.5 million per patient. Bluebird Bio, a gene therapy pioneer once worth nearly $10 billion, was sold to private equity firms for $30 million last month.
In 2024, developers of gene therapies and gene-editing products raised less than $1.4 billion across 39 venture rounds, according to a data analysis from DealForma for Reuters.
In 2023, they raised $3.5 billion in 60 deals, which was down 57% from the sector’s peak of $8.2 billion across 122 deals in 2021.
“There needs to be better ways, cheaper ways to make some of these complex products,” in order for investor interest in gene therapy to return, said Subin Baral, Ernst & Young global life sciences deal leader.
Companies like Novartis say they are continuing gene therapy research. More than 95% of infants born in the US with a rare neuromuscular disorder called spinal muscular atrophy are now treated with its Zolgensma gene therapy and it is being developed for older children.
Vertex Pharmaceuticals continues to see patients with sickle cell disease start the process to receive its Casgevy therapy, said Chief Operating Officer Stuart Arbuckle.
He said the treatment, which had 2024 sales of just $10 million, was pursued because the company believed gene editing offered the best solution for people living with the debilitating disease.
Gene therapy — the one-time process of inserting a modified gene to compensate for a faulty gene or change how a patient’s cells produce proteins — is a complex procedure in which patients often have to be hospitalised, with insurance coverage not always clear.
The US Food and Drug Administration has supported the breakthrough treatments, which have multimillion-dollar prices.
Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, told Reuters he is confident “speed bumps” including scientific challenges, manufacturing difficulties and real-world application of gene therapies will be worked out.
“We need to have a streamlined regulatory process […] Combine that with manufacturing improvements to have a package of things to bring down cost so they are no longer cost prohibitive,” Marks said earlier this month. “My hope is that we have a group that is going to be here through the next years working on this.”
Safety issues are also a concern even after approval. Sarepta Therapeutics said this week a 16-year-old boy died from acute liver failure months after receiving the company’s gene therapy for a rare muscular dystrophy.
Weight-loss drugs, meanwhile, are forecast to see annual sales of $150 billion in coming years as new, highly-effective medicines have sparked outsized demand. Obesity therapeutics attracted $1.75 billion in venture capital last year, nearly triple 2023’s total of $630 million.
Overall, global biopharma venture funding rose to $27 billion in 2024 from $23.2 billion in 2023. Cancer remained the top sector at $10.3 billion, according to DealForma.
