The shift in the cell and gene therapy capital market may not be shocking to those who have been watching since the post-COVID zeitgeist, when market entry of several clinical successes finally came after decades of innovation and development in the field. Slow clinical progress of many cell and gene therapy programs, coupled with a reinvigoration of “large” disease therapies and emergence of new technologies for drug discovery and development, has shifted early venture capital interest in the past five years. So, how does innovation continue to receive funding in this environment, and what will drive the most value in a resource-constrained market? 

Triangle Insights Group evaluated VC raises by cell and gene therapy innovators in 2024 to identify consistent value drivers supporting successful raises. Several themes emerged that new innovators can use to refine their fundraising efforts.

Form a Winning Team to Drive Early Investor Enthusiasm 

VC funds often invest in the leadership team of a company rather than the technology itself. The qualities that firms highlight in leadership teams tend to steer toward either robust successful leadership experience, deep technical expertise, or both. Several firms raised large rounds in 2024 due in part to management teams with proven background and established leadership in the space. Early-stage companies without industry heavyweights should stress a strong background in the core technology, and additional value can be unlocked if company leadership includes individuals with track records in growing biotechs to successful outcomes. 

Maximize the Existing Data and Define the Path Forward 

Given recent trends, it is likely that cell and gene therapy investors will place even more emphasis on the body of evidence supporting the assets and underlying technology. Companies raising Series A rounds need to build confidence that the technology will work safely in humans. For firms without human trials, defining a clear plan for an IND submission can build credibility that the preclinical evidence is sufficient to move forward. In earlier Seed rounds, preclinical data is compelling but does not need to be comprehensive. This data becomes more of a baseline requirement in later rounds.

Invest in Manufacturing or Overcome Traditional Barriers 

Manufacturing is a challenge for today’s cell and gene therapies. For traditional autologous CAR-T therapies, the insufficient scalability and logistics of sample collection and processing present large costs. Allogeneic cell therapies address some of these logistical challenges by enabling greater economies of scale, but manufacturing has many physiological and scientific barriers. Even comparatively “simple” gene therapies require specialized manufacturing processes. Firms that demonstrate steps toward GMP manufacturing can improve access to capital.

Strategic Partnerships Address Gaps and Build Confidence 

While partnerships and strategic collaborations can be seen as risks to an investment thesis, they build confidence in a challenging environment if structured correctly. Such deals can potentially generate clinical proof-of-concept data from ex-US trials, provide non-dilutive capital, and enable nascent firms to benefit from markets they otherwise could not access. As firms mature, strategic partnerships can help with expansion. It is important to focus the story on the firm’s technology and vision, highlighting the contributions of scientific founders or hypothesizing about preclinical findings.

Elevating Your Investor Narrative

In a challenging fundraising environment for cell and gene therapy innovators, the lessons from last year’s standout capital rounds shed light on viable paths that could enable the next raise. Every startup and every investor is different. Establish multiple value drivers and consider as many opportunities as possible to secure additional confidence. So, what steps can you take today?