Cell and Gene Therapy Faces Challenges Amid Regulatory Shifts

The landscape of cell and gene therapy is undergoing significant adjustments as companies navigate a series of regulatory challenges and market uncertainties. In 2023, the approval of the first CRISPR-based gene therapy in the United States marked a hopeful milestone. Former President Joe Biden emphasized its potential, stating, “This holds tremendous promise for developing additional life-saving treatments for millions of Americans who live with other rare diseases.” However, as of 2025, the sentiment has shifted toward a more cautious outlook.

The ongoing saga surrounding Sarepta has dominated headlines this year. The company’s treatment for Duchenne muscular dystrophy, known as Elevidys (delandistrogene moxeparvovec), has faced scrutiny following reports linking it to patient deaths. Owen Smith, a partner at 4BIO Capital, noted the complexity of regulatory oversight in this pioneering field. “It’s a tough job being a regulator, and it’s a tough job being a pioneer in this space,” he explained, highlighting the learning curve for both parties. Ultimately, Sarepta’s therapy was cleared after an investigation, yet the public dispute with the FDA underscored the volatility inherent in the cell and gene therapy sector.

Regulatory Changes and Market Reactions

The FDA’s Center for Biologics Evaluation and Research (CBER), which oversees cell and gene therapies, has also seen leadership changes. The departure of Vinay Prasad, the head of CBER, amidst the Sarepta fallout added to the uncertainty. Financial analysts from William Blair have warned of continued volatility in the industry, factoring in regulatory unpredictability alongside challenges related to manufacturing and scalability of therapies.

In the face of these obstacles, some companies are pivoting away from cell and gene therapy. Vor Bio, for example, has shifted its focus to the autoimmune sector, shutting down its advanced therapy pipeline and significantly reducing its workforce. Meanwhile, bluebird bio, initially buoyed by the approval of its sickle cell gene therapy, Lyfgenia (lovo-cel), in December 2023, has struggled to achieve profitability due to high development costs and slow market adoption.

The challenges facing these companies have prompted industry experts to call for more effective strategies. Stella Vnook, CEO of cell and gene logistics company Likarda, remarked on the initial excitement surrounding gene therapy approvals. Yet, as questions about reimbursement and logistics arose, many firms found themselves forced to consolidate or abandon programs altogether.

Future Prospects and Investment Trends

Despite the setbacks, some industry leaders believe that increasing the number of approved therapeutics could drive future success. Matthew Durdy, CEO of the Cell and Gene Therapy Catapult in the UK, argued that a larger therapeutic pipeline would ultimately lead to better pricing models and increased market viability. He stated, “The profitability of the therapeutics for the industry is low because of the high cost of manufacturing.”

As investment in the sector has waned, with significant slowdowns reported in areas such as cancer vaccines and rare diseases, emerging companies are finding it challenging to attract funding. Ronald Li, CEO of US biotech Medera, noted that while plans for a public offering remain, market conditions are a significant factor in timing. The biotech sector is facing broader investment issues that are not confined to cell and gene therapies alone.

Despite these challenges, some investors see potential in the sector. Owen Smith indicated that his firm, 4BIO Capital, has shifted its focus to gene therapy investments, recognizing a disparity in valuations that could provide opportunities.

Overall, while the industry faces a correction rather than a collapse, experts agree that the scientific advancements in cell and gene therapies are substantial. As of August 2025, there are 45 FDA-approved therapies in the United States, with seven approvals occurring in 2024 alone. This progress suggests a resilient future, contingent on addressing economic and logistical barriers.

In summary, while the cell and gene therapy sector is navigating a challenging environment marked by regulatory scrutiny and investment hesitance, the foundational science continues to show promise. As stakeholders adapt, the potential for innovative therapies remains, albeit with a more cautious approach moving forward.