From Innovation to Financial Stability: Lessons for Cell and Gene Therapy Companies
Since the first cell-based gene therapies (CGTs), Luxturna® and Kymriah®, were approved in the US, cell and gene therapies have made a profound impact on modern-day medicine. Viewed by patients and families as a beacon of hope, cell and gene therapies represent a potential long-term cure for diseases and disorders that were once seen as untreatable.
Yet amid this promise a growing number of companies are facing a stark reality: Scientific breakthroughs alone are not enough.
Syneos Health Consulting helps CGT companies build investor-aligned roadmaps that move from lab to life with clarity and control.
In the past three years alone, multiple CGT biopharmas have gone through radical transformation -- whether it’s reprioritizing pipelines, selling off intellectual property, being acquired with lower premiums, even with promising pipelines. This is noticeable in areas with a high degree of competition. At the same time, in areas with meaningful early data, few companies have been acquired with significant premiums. These choices point to a critical reality for today’s CGT innovators: Success requires equally rigorous attention to financial/commercialization strategy and risk mitigation.
Here, our team in Consulting explores common pitfalls and strategic lessons for CGT companies aiming to achieve sustainable growth.
Lesson #1 | Investor Sentiment in CGT: Execution Matters as Much as Innovation
Investor enthusiasm for CGT companies can be high, but it can also be fragile. Even companies with strong clinical data may struggle to secure follow-on funding due to an unclear value proposition, limited commercialization potential, leadership turnover or vague capital strategies.
Cases in point: Several biotechs failed to maintain investor confidence despite innovative assets. One company exited the market after a leadership change triggered funding withdrawal, while another saw undervaluation in early offers before eventually landing a higher bid—highlighting the importance of a compelling and consistent investor story.
Strategic Takeaways
- Market timing: Fundraising and partnerships are highly sensitive to macroeconomic conditions.
- Risk planning: Overreliance on a single investor or funding source creates vulnerability.
- Leadership stability: Sudden leadership changes can erode investor confidence.
- Value storytelling: Weak narratives fail to attract or retain investors during downturns.
- Funding flexibility: Inflexible financing structures limit adaptability in volatile markets.
Lesson #2 | Managing Capital Burn: Prioritization Over Expansion
Developing CGTs is inherently resource intensive. Companies that attempted to progress multiple candidates without clear prioritization quickly depleted their funding. Others delayed decisions to pause or terminate underperforming programs, leading to avoidable losses.
One company paused a phase II trial only after burning through $2.5 million in grants, paused phase II trials too late, and then filed for bankruptcy. Another spent more than $125 million across two parallel CAR-T programs within a single year, with no prioritization. These cautionary tales emphasize the need for smarter pipeline management.
Strategic Takeaways
- Burn rate management: Rapid cash depletion accelerates insolvency risk.
- Pipeline prioritization: Spreading resources across too many assets dilutes impact.
- Clinical trial efficiency: Poorly designed trials waste time and capital.
- Funding runway: Short runways force fire sales or bankruptcy.
Lesson #3 | Mergers and Acquisitions (M&A) in CGT: Not Always a Safety Net
M&A remains a common exit strategy in CGT, but it is not without risk. Some companies rejected early buyout offers only to face insolvency later, while others experienced post-deal disintegration due to poor strategic alignment or integration planning.
In one high-profile example, a biotech declined a major acquisition offer but ultimately succumbed to debt and litigation. Another company’s shareholders blocked a merger, which contributed to bankruptcy soon after.
Strategic Takeaways
- Strategic fit: Misaligned mergers fail to deliver synergies.
- Due diligence: Overlooking liabilities (e.g., litigation, regulatory risks) jeopardizes transactions.
- Post-merger integration: Poor planning leads to operational chaos.
- Valuation realism: Overestimating worth scuttles deals.
The CGT companies that endure will be those that treat strategy as seriously as science—building not just for breakthroughs, but for resilience. The stories shared here illustrate how even high-potential assets can falter without thoughtful planning, prioritization and investor alignment. In a market defined by volatility, those lessons are more than cautionary—they're essential.
Ready to align your CGT strategy with today’s investor and commercialization realities? Explore more and start the conversation.
Contributors
Pooja Bakhai | Director, Syneos Health Consulting
Abhi Gupta | SVP, Head of Cell and Gene Therapy
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