Insights from CPHI 2024: Accelerating drug development through strategic CDMO and CRO partnerships
October 20, 2024 (12 minute read)
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Insights from CPHI 2024: Navigating the high costs of cell and gene therapy development with flexible financial solutions
October 18, 2024 by Staff writer (7 minute read)
The cost of developing cell and gene therapies continues to be a major hurdle for companies striving to bring innovative treatments to patients.
The financial headwinds that have challenged the biotech industry since 2021 have significantly impacted the cell and gene therapy (CGT) sector, particularly for early-stage programs. Rising interest rates, more cautious venture capital and private equity markets, and fewer IPO opportunities have made it difficult for companies to secure the necessary capital to advance their therapies. While later-stage companies with established clinical data have managed to raise funds, early-stage programs are often delayed or halted entirely due to a lack of investment.
"Funding challenges in the cell and gene therapy space are making it increasingly difficult for companies to commit to essential projects," said Kelly Howard, Vice President of Commercial Operations for Viral Vector, mRNA, and Cell Therapy Services at Thermo Fisher Scientific, during a presentation at CPHI Milan 2024. She emphasized that without access to critical capital, many groundbreaking therapies may never reach patients.
Given these financial pressures, there is a growing need for innovative funding solutions that can address the high costs of development and help ensure that projects can continue moving forward, Howard noted. “Having the right financial strategy can make all the difference.”
To meet this need, Thermo Fisher’s in-house Financial Solutions team works with biotech, pharmaceutical, and academic organizations, helping them navigate funding complexities with tailored financial plans.
“Our goal is to work with customers to align financial solutions with their business strategy, ensuring that their science can continue to advance even when capital is limited,” Howard explained. She described several financial solutions designed to help companies manage costs and preserve cash:
- CRO and CDMO services financing: Extending payment terms to support larger CRO and CDMO projects, allowing companies to preserve cash while advancing their programs.
- Master lease line of credit: Offering a line of credit that companies can access as they grow and scale, ensuring they have the necessary technology at each stage of development.
- Technology refresh programs: Enabling companies to keep up with rapidly advancing technology through cost-effective equipment upgrade programs.
- Extended Terms Agreement (ETA): Delaying payments for up to six months, giving companies time to generate revenue before making large payments.
- Payment deferrals: Offering deferred lease payments to align with new budget cycles or revenue generation timelines.
“These options demonstrate the flexibility needed to adapt to a company’s specific financial circumstances and evolving needs,” Howard concluded.
Real-world impact of financial solutions
Howard shared examples of how companies have leveraged Thermo Fisher’s flexible financial options to stay on track. One biotech company, for instance, deferred payments to the next budget year, enabling their oncology project to continue without delays. Another company—a preclinical biotech—secured a line of credit for its cell therapy project as well as equipment financing, allowing them to preserve cash while advancing their project.
“These examples highlight how flexible financial solutions can help companies overcome financial hurdles and keep their projects on track,” Howard said.
Looking forward: The role of financial partnerships
Howard concluded by emphasizing how crucial partnerships are in helping cell and gene therapy companies succeed. “Funding drug development and commercialization is challenging and costly,” she said. “But with the right financial partner, companies can extend their resources and focus on what matters most—the science.”