Cell and gene therapies, which fall under the general classification of advanced therapies, have massive potential to target hard-to-treat blood cancers and autoimmune disorders. The complexity of development, manufacture, and supply of these therapies often leads drug developers to seek outsourcing partners with expertise in the field. 

According to a recent report by Precedence Research, the global cell and gene therapy (CGT) CDMO market size accounted for $8.07 billion in 2025 and is forecasted to hit around $74.03 billion by 2034, representing a CAGR of 27.92% from 2025 to 2034, fueled by rising demand to put specialized expertise, facilities and regulatory knowledge into developing and manufacturing CGTs.

However, while CGTs remain one of the fastest-growing segments of healthcare, manufacturing and drug delivery challenges have proved to be a major hurdle. CGTs are already some of the most expensive medicines on the market. For example, Orchard Therapeutics’ gene therapy Lenmeldy, approved in 2023 for metachromatic leukodystrophy, costs $4.25 million for the one-time treatment. Prices like this make securing coverage, and therefore revenue, difficult. At a time when biotechnology companies with clear development paths are increasingly favored, investment in CGT developers took a hit in recent years.

According to data from DealForma published by Nature Biotechnology, as of August of last year, makers of cell and gene therapies raised half a billion dollars across 16 venture rounds. Those numbers were well below the $8.2 billion in funding brought in by the 121 deals DealForma counted during the sector’s peak in 2021.

This article offers perspectives from CDMOs in the CGT space on today’s CGT trends, challenges, and more.

State of the industry

The consensus among industry experts about the state of the CGT outsourcing market is that it’s a rapidly growing sector with significant potential, but also substantial challenges. “The CGT outsourcing market is highly dynamic and increasingly competitive,” says Luca Alberici, executive vice president of AGC Biologics’ cell and gene technologies division. “The cell and gene therapy (CGT) outsourcing market is experiencing rapid expansion, fueled by a growing clinical pipeline (over 2,200 therapies are currently in development globally) and an increasing pace of regulatory approvals,” Alberici explains. “More than 60 gene therapies are expected to receive approval by 2030, driving strong investor interest and providing a relatively secure foundation for continued financing.”

However, he also says the market “is not without structural imbalances.” Alberici observes, “There is currently an overcapacity in AAV vector manufacturing due to early overinvestment, while autologous cell therapy manufacturing remains under-capacitated and bottlenecked by complex, labor-intensive, patient-specific workflows.”

He cites the COVID-19 pandemic, during which the industry faced significant disruptions, as a major turning point for the market. “During this phase, a huge quantity of investments was pumped into the market, supporting an increased number of programs approaching clinical trials and consequently demanding GMP production,” Alberici says. “In the following years, the investments returned to a very low level, and these programs have been discontinued after returning to a setting characterized by a generally lower ‘appetite for risk’ and price-sensitive sponsors.”

Matt Niloff, chief commercial officer, Andelyn Biosciences, concurs. He characterizes the ongoing funding market as “anemic.” “We have seen many CDMOs downsize facilities, capacity, and staff,” Niloff remarks. “Despite this, demand remains, and those CDMOs with strong capabilities and capacity are continuing to help accelerate gene therapy programs into clinical stages and on to commercialization.”

John Lee, global head of cell and gene therapy, SK pharmteco, says, “The sector rapidly expanded during the 2020–2021 boom, as biotech and pharma companies scrambled for scarce manufacturing capacity. However, following the capital market correction in 2022, many portfolios contracted, leaving CDMOs with excess capacity and thinning pipelines. The result has been a steady wave of shutdowns, mergers, and strategic realignments.” He explains, “Demand has softened over the past few years, largely due to macroeconomic uncertainty, reduced access to capital, and increased manufacturing capacity across the board.”

“In recent years, investors have focused on assets close to or in the clinic, and therefore there has been a bit of a retraction on the amount of gene therapy programs moving to the IND-enabling stage,” Andelyn Biosciences’ Niloff summarizes. “Still, we see solid cell and gene therapy programs moving through the clinic and toward commercial launch, validating that these technologies can provide drastic improvement in patient outcomes.”

Cost challenges

One of the biggest challenges faced by CGT companies when considering outsourcing their manufacturing is cost of goods. “Many early-phase, especially orphan and ultra-rare diseases, have either been paused or abandoned due to heavy cost burdens associated with manufacturing and running multiple, parallel clinical trials,” says Ian Goodwin, director, program design, global commercial program design, Fujifilm Diosynth Biotechnologies. “While manufacturing bears responsibility, regulatory bodies have presented additional requirements to advancing cell and gene therapy for many ultra-rare diseases. The promise of platforming processes for similar viral vector constructs spanning multiple rare disease indications with the ambition to leverage previous IND submissions through regulatory bodies has not yielded the results once hoped for.”

John Horn, senior director and head of business intelligence and insights, global program management, Fujifilm Diosynth Biotechnologies, concurs and adds, “Small indications and minimal opportunities for automation or manufacturing scalability—particularly for cell therapies—lead to high treatment cost, limited market access/reimbursement challenges, and difficulties in competing with traditional modalities.”

According to Goodwin, one strategy to reduce cost of goods and enhance commercial viability is through productivity-enhancing and process intensification, which can apply to both large and small disease cohorts. “We expect that improving cost per dose through two critical channels—innovation to improve overall productivity and help offset cost-per-dose, and improved regulatory validation/approvals to reduce expensive barriers to gaining market access—can significantly reignite interest in smaller disease cohorts.”

Finding the right CDMO

AGC Biologics’ Luca Alberici says, “One of the biggest challenges cell and gene therapy (CGT) companies face when outsourcing manufacturing is the limited number of CDMOs with true commercial experience, as only a few have successfully brought CGT products through FDA or EMA approval.”

SK pharmteco’s John Lee adds, “The biggest hurdle for CGT developers is identifying CDMOs with the right mix of technical capabilities, experience, and program alignment.” Lee says CDMOs can ease this process by investing in transparent communication, robust proposal development, and early scientific engagement. “Content that clearly articulates platform experience, case studies, and team expertise can significantly reduce friction during vendor selection and position a CDMO as a trusted partner rather than just a vendor,” he remarks.

According to Alberici, “A successful partnership between a cell and gene therapy (CGT) developer and a CDMO is built on mutual trust, transparent communication, and aligned expectations throughout the development and manufacturing process. “Key attributes include the CDMO’s proven track record, with experience in scaling CGT products and navigating complex regulatory pathways, as well as robust technical capabilities, such as qualified production platforms and predictive scale-down models,” he elaborates.

Andelyn Biosciences’ Nilhoff says, “Transparent communication, trust, focus, and a sense of urgency are equally paramount.” He argues that a successful partnership between an innovator company and a CDMO is “manifested by a complete alignment upfront on the program strategy, priorities, goals, timing, and risk tolerance.”

Keith Evans, director of MES practice and solution at L7 Informatics, posits, “Effective partnerships are built on digital transparency and process alignment. From the outset, both parties need to share a clear understanding of how data will be captured, interpreted, and shared. It’s no longer enough for CDMOs to offer cleanrooms and headcount,” Evans says. “They’re expected to deliver flexibility, technical depth, and digital readiness.”

Looking ahead

The future of the CGT manufacturing and outsourcing market is characterized by technological innovation, market growth and consolidation, and CDMO evolution. “While the last two years have been challenging, the outlook remains positive, particularly in terms of regulatory approvals. Geopolitical volatility and persistent structural challenges continue to present hurdles. However, the medium to long-term prospects remain optimistic, with the potential for growth as these issues are addressed,” says AGC Biologics’ Alberici.

He claims we can expect “continued consolidation among CDMOs and biotech companies, as the complexity and capital intensity of CGT development drive partnerships, mergers, and acquisitions. Larger players will seek to offer end-to-end capabilities, while smaller innovators may look to partner for scale and regulatory expertise.”

Fujifilm Diosynth Biotechnologies’ John Horn echoes a similar sentiment. He anticipates the temporary slowdown in pipeline progress to ease as companies adapt to the new normal environment for funding. “As economic conditions improve, increased consolidation of smaller developers and CDMOs can be expected,” Horn predicts. “The market will face substantial growth as commercial viability is further proven, and ROI can be justified against pursuing traditional modalities. The likelihood of approval for a monoclonal antibody is currently twice that of a CGT product, which limits interest from both big pharma and VCs. This will change as the pipeline matures.”

“The CGT market will continue to grow rapidly, but we can expect consolidation, especially among CDMOs that still rely on manual processes and fragmented digital systems,” adds Kevin McMahon, solutions consultant, L7. He claims, “The most competitive CDMOs will be those that invest in unified digital platforms, contextualized data, and AI-ready infrastructure. These capabilities enable not only faster tech transfers and scalable compliance but also more collaborative, insight-driven partnerships with clients. Over time, the expectation will shift from producing batches to delivering outcomes, with digital maturity as a key differentiator.”

“Innovation is not optional,” emphasizes SK pharmteco’s John Lee. “It’s fundamental to the future of CGT manufacturing. Automation platforms will become increasingly critical for scale and standardization in cell therapy.”

“Technological innovation will play a significant role in the future of cell and gene therapy (CGT) manufacturing and outsourcing by enabling greater scalability, consistency, and cost-efficiency, all of which are critical for broader patient access and commercial success,” remarks AGC’s Alberici. He says, “One of the most transformative areas is the development of automated and closed manufacturing systems, particularly for autologous therapies, which reduce manual steps, improve reproducibility, and lower contamination risks. As these systems mature, they will help shift CGT manufacturing from artisanal processes to industrialized platforms.”

SK pharmteco’s John Lee sums up the future of the CGT sector poetically. “History shows that science tends to prevail over temporary barriers,” he suggests. “While today’s CGT landscape is challenged by logistics, regulatory complexity, high COGS, and macroeconomic volatility, each barrier is solvable and will eventually be solved through innovation and technical advancement.” 

He continues, “What we don’t yet know can become clear with time, and the industry will continue to march forward as those hurdles are systematically addressed. Innovation will be the driver of transformation, and those who invest now in scalable, flexible technologies will be best positioned to lead when the next growth phase begins.”