Soaring CGT demand altering bioprocess pipelines

Bioprocess companies like Sartorius are seeing the demand for CGT equipment and services become an increasingly large proportion of their biologics revenue.

René Fáber, who recently tookover as CEO of bioprocess unit Sartorius Stedim Biotech (SSB), said cell culture media and critical materials used to make “new therapeutic modalities like cell and gene therapies (CGTs)” are becoming a “highly relevant portfolio for us”

His comment came off the back of the closure of Sartorius’s $2.6 billion acquisition of Polyplus this week.

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According to Sartorius, the demand for Polyplus’ CGT technologies and services are “growing over-proportionally” with gene therapies at around 20% and cell therapies at 30%. Fáber told shareholders “the market for CGTs is an early, relatively young market, which is becoming increasingly relevant. These new modalities represent now one-third of [our] new biologics pipeline already.”

Fáber referenced the US Food and Drug Administration (FDA) prediction that there will be 25 newly approved products by 2025, and said with this in mind Polyplus “brings quite [a] nice footprint in these pipelines, both in development, but also in already approved drugs.” However, he made it clear that Polyplus’ “approved drugs are rather small indications typically with regional or country approvals.”

The FDA’s prediction is gradually coming to fruition. In 2022, there were 10 approvals between the US and Europe for nine CGT products – Adstiladrin, Breyanzi, Carvykti, Ebvallo, Hemgenix (approved by both FDA and EMA), Roctavian, Skysona, Upstaza, Zynteglo.

Moreover, approvals have continued this year. In April, the FDA approved Gamida Cell’s Omisirge, an allogeneic cell therapy for patients with blood cancers who are set to undergo stem cell transplantation. Two months later,  the FDA gave Sarepta Therapeutics the green light for Elevidys, an adeno-associated virus-based gene therapy for the treatment of Duchenne muscular dystrophy (DMD). And in the same month, the Agency granted Ferring Pharmaceuticals’ Prior-Approval Supplement (PAS) to scale-up the manufacturing process for gene therapy Adstiladrin in Finland.

As such, Sartorius is not alone as a vendor benefitting from greater CGT-related service demand. The identified demand can be seen through the diverse ways vendors have invested and partnered in the space.

Danaher Corporation signed a multi-year partnership with the University of Pennsylvania (UPenn) to advance cell therapy technology. Both parties said this deal was driven by the scale of clinical development identified in the chimeric antigen receptor (CAR) T-cell therapy space.

Two years ago, Thermo Fisher Scientific said a proportion of its $600 million CAPEX would be spent on manufacturing technology and capacity to support the production of cell therapies.

Moreover, other vendors, like Repligen, have attributed revenue gains to CGT demand.

Overall financials

Sartorius reported sales of €1.140 billion ($1.26 billion) in the first half 2023, down 18.7% on the same period last year. Order intake, meanwhile, fell 37.5% to €1.142 billion.

The company said this was due to the continuous reduction in demand for bioprocess technologies and services following two years of unprecedented growth during the COVID-19 pandemic. This trend first arose in the second half of 2022 and was described at the time by Sartorius senior management as a “swift normalization of demand.”

However, the predicted normalization of demand has not happened as quickly as the CDMO and other bioprocess firms would have liked, which is reflected in SSB’s lowered EBITDA margin to approximately 30% from the forecasted 33.8%.