Gene ther­a­py is en­ter­ing a phase of mat­u­ra­tion, with dozens of pro­grams ad­vanc­ing across rare, preva­lent, and com­plex in­di­ca­tions. As the field has pro­gressed and clin­i­cal suc­cess­es have ac­cu­mu­lat­ed, man­u­fac­tur­ing has be­come a cen­tral fac­tor in eval­u­at­ing ade­no-as­so­ci­at­ed virus (AAV) based ther­a­peu­tic can­di­dates. As a re­sult, in­vestor dili­gence now in­creas­ing­ly ex­tends be­yond a ther­a­py’s sci­en­tif­ic ev­i­dence base and clin­i­cal po­ten­tial to the un­der­ly­ing man­u­fac­tur­ing strat­e­gy and ex­e­cu­tion plan. An in­te­grat­ed strat­e­gy ground­ed in ear­ly plan­ning across vec­tor de­sign, scal­able pro­duc­tion ap­proach­es, and an­a­lyt­i­cal strate­gies en­ables de­vel­op­ers to en­gage in­vestors with greater clar­i­ty, con­fi­dence, and a stronger foun­da­tion for long-term suc­cess.

This per­spec­tive is re­in­forced by ven­ture cap­i­tal in­vestors work­ing close­ly with emerg­ing biotech­nol­o­gy com­pa­nies. Gi­an­na Hoff­man-Lu­ca, Ph.D., a biotech in­vestor at Per­cep­tive Ad­vi­sors who sup­ports com­pa­nies from ear­ly de­vel­op­ment through scale-up, notes that man­u­fac­tur­ing strat­e­gy has be­come a cen­tral el­e­ment of in­vest­ment dili­gence and a key sig­nal of whether a pro­gram can re­al­is­ti­cal­ly progress be­yond ear­ly de­vel­op­ment.

The lat­est State of the In­dus­try analy­sis by the Al­liance for Re­gen­er­a­tive Med­i­cine (ARM) shows that in­vest­ment in the cell and gene ther­a­py sec­tor re­mained sub­stan­tial in 2025, with $11.1B raised across 216 fi­nanc­ings.  Cell and gene ther­a­pies (CGT) ac­count­ed for ap­prox­i­mate­ly 18% of the val­ue of all biotech ven­ture fi­nanc­ing, up from rough­ly 15% the year pri­or. The shift sug­gests that even in a more con­strained fund­ing en­vi­ron­ment, in­vestors con­tin­ue to pri­or­i­tize the sec­tor as ther­a­pies ad­vance to­ward clin­i­cal and com­mer­cial evo­lu­tion.

“The sec­tor is clear­ly en­ter­ing a new phase of dis­ci­plined growth,” said Tim Hunt, CEO of the Al­liance for Re­gen­er­a­tive Med­i­cine. “In­vestors are in­creas­ing­ly fo­cused not on­ly on break­through sci­ence, but al­so on whether com­pa­nies have a cred­i­ble path to de­vel­op­ment, man­u­fac­tur­ing scale, and glob­al com­mer­cial­iza­tion.”

For AAV-based gene ther­a­pies, man­u­fac­tur­ing de­sign de­ci­sions are tight­ly tied to scal­a­bil­i­ty, cost struc­ture, and risk mit­i­ga­tion. Con­se­quent­ly, de­vel­op­ers are ex­pect­ed to show not on­ly pro­ject­ed clin­i­cal progress, but al­so tech­ni­cal dili­gence across vec­tor de­sign, process ro­bust­ness, scal­a­bil­i­ty con­sid­er­a­tions, and an­a­lyt­i­cal strate­gies. The ob­jec­tive is to lim­it process changes fol­low­ing reg­u­la­to­ry fil­ings and sup­port a more pre­dictable tra­jec­to­ry from clin­i­cal de­vel­op­ment through com­mer­cial-scale man­u­fac­tur­ing.

Across re­cur­ring dili­gence con­ver­sa­tions, a con­sis­tent theme emerges: in­vestor eval­u­a­tion of gene ther­a­py pro­grams ex­tends be­yond sci­en­tif­ic promise to in­clude sci­en­tif­ic va­lid­i­ty, man­u­fac­tur­ing scal­a­bil­i­ty, com­mer­cial fea­si­bil­i­ty, and op­er­a­tional ex­e­cu­tion. A crit­i­cal com­po­nent of this eval­u­a­tion is Chem­istry, Man­u­fac­tur­ing, and Con­trols (CMC) strat­e­gy. As il­lus­trat­ed in Fig­ure 1, the man­u­fac­tur­ing por­tion of CMC can span many con­nect­ed work­streams: drug de­liv­ery and vec­tor de­sign, man­u­fac­tur­ing de­sign, process and clin­i­cal de­vel­op­ment, and an­a­lyt­i­cal de­vel­op­ment. Each work­stream car­ries dis­tinct re­spon­si­bil­i­ties and long-term pro­gram im­pact be­tween a de­vel­op­er and man­u­fac­tur­ing part­ner, high­light­ing that man­u­fac­tur­ing is a foun­da­tion­al dri­ver of pro­gram val­ue and in­vestor con­fi­dence.

Key AAV man­u­fac­tur­ing de­ci­sions made ear­ly in de­vel­op­ment, such as vec­tor de­sign, pro­duc­tion plat­form, and an­a­lyt­ics, of­ten be­come em­bed­ded in reg­u­la­to­ry fil­ings and clin­i­cal sup­ply chains. Lat­er changes can trig­ger com­pa­ra­bil­i­ty stud­ies and ad­di­tion­al reg­u­la­to­ry re­view, ul­ti­mate­ly af­fect­ing time­lines and cost.

As Dr. Hoff­man-Lu­ca notes, in­vestor dili­gence to­day of­ten fo­cus­es on the re­al­is­tic align­ment be­tween de­vel­op­ment and man­u­fac­tur­ing plans:

“One of the biggest things we look for is whether the de­vel­op­ment time­line for the drug it­self match­es with their man­u­fac­tur­ing. That’s a key part of dili­gence to make sure you’re com­fort­able with the time­line they’ve pro­posed. The in­vest­ment has to match how much cap­i­tal they say they need to raise, and man­u­fac­tur­ing needs to be in­clud­ed.”

Con­se­quent­ly, man­u­fac­tur­ing ar­chi­tec­ture in­creas­ing­ly in­flu­ences in­vestor sen­ti­ment well be­fore IND fil­ing. A well-ar­tic­u­lat­ed man­u­fac­tur­ing strat­e­gy sig­nals that a team un­der­stands the op­er­a­tional de­mands of vi­ral vec­tor–based ther­a­pies and has con­sid­ered the long-term im­pli­ca­tions of ear­ly tech­ni­cal de­ci­sions.

In­vestors al­so look for ev­i­dence that de­vel­op­ers can com­mu­ni­cate man­u­fac­tur­ing as­sump­tions clear­ly and con­cise­ly. High-lev­el ex­pla­na­tions of dose re­quire­ments, ex­pect­ed yield, and scal­a­bil­i­ty help in­vestors de­ter­mine whether pro­ject­ed de­vel­op­ment time­lines and cap­i­tal needs are ground­ed in op­er­a­tional re­al­i­ty.

As Dr. Hoff­man-Lu­ca ex­plains, trans­paren­cy around these as­sump­tions is of­ten more im­por­tant than ex­ces­sive tech­ni­cal de­tail:

“What in­vestors want to see is that the team un­der­stands the man­u­fac­tur­ing im­pli­ca­tions of their de­ci­sions. You don’t need every tech­ni­cal de­tail in the pitch, but you do need to show that the as­sump­tions around yield, scale, and time­lines are re­al­is­tic.”

In­vestors in­creas­ing­ly eval­u­ate whether a de­vel­op­er’s time­line re­flects the prac­ti­cal du­ra­tion re­quired for each stage of de­vel­op­ment and man­u­fac­tur­ing scale-up. De­vel­op­ers who proac­tive­ly ad­dress man­u­fac­tur­ing risks while de­sign­ing scal­able process­es and an­a­lyt­i­cal strate­gies are bet­ter po­si­tioned to re­duce dili­gence fric­tion and un­cer­tain­ty.

In­vestors as­sess man­u­fac­tur­ing strat­e­gy, the ex­pe­ri­ence of the lead­er­ship team and ex­e­cu­tion part­ners, and whether the man­u­fac­tur­ing part­ner of­fers ca­pa­bil­i­ties be­yond ca­pac­i­ty, such as plat­form tech­nolo­gies, es­tab­lished process­es, and in-house an­a­lyt­ics. The start­ing point of a pro­gram al­so shapes in­vestor per­cep­tion. Pro­grams orig­i­nat­ing at a vec­tor core or aca­d­e­m­ic fa­cil­i­ty of­fer a prac­ti­cal, cost-ef­fec­tive path to ear­ly ma­te­r­i­al, par­tic­u­lar­ly when speed to proof-of-con­cept is the pri­or­i­ty. At the same time, ma­te­r­i­al pro­duced in these set­tings may re­quire ad­di­tion­al align­ment as pro­grams tran­si­tion, in­clud­ing fa­cil­i­ty fit ac­tiv­i­ties and process fa­mil­iar­iza­tion. In­te­grat­ing pri­or da­ta with re­sults gen­er­at­ed at a new site can al­so in­flu­ence the pace to­ward key mile­stones. By con­trast, pro­grams that be­gin and re­main with a sin­gle man­u­fac­tur­ing part­ner ben­e­fit from process con­ti­nu­ity, ac­cu­mu­lat­ed run his­to­ry, and a tighter feed­back loop be­tween de­vel­op­ment and man­u­fac­tur­ing de­ci­sions. As il­lus­trat­ed in Fig­ure 2, these two paths car­ry dif­fer­ent time­line im­pli­ca­tions, dif­fer­ences that in­vestors can iden­ti­fy and weigh. To­geth­er, these fac­tors high­light the im­por­tance of clear­ly com­mu­ni­cat­ing man­u­fac­tur­ing strat­e­gy and de­ci­sion-mak­ing.

As Dr. Hoff­man-Lu­ca ex­plains:

“If who­ev­er is re­spon­si­ble for ar­tic­u­lat­ing the man­u­fac­tur­ing de­ci­sions can’t re­al­ly talk about the process they’ve im­ple­ment­ed, that’s a red flag. In­vestors need to trust that the per­son or team mak­ing those de­tailed de­ci­sions un­der­stands the man­u­fac­tur­ing strat­e­gy and can ex­plain why those choic­es were made. At the same time, the de­vel­op­ment plan has to be re­al­is­tic. You’re not go­ing to set clin­i­cal mile­stones that aren’t fea­si­ble from a man­u­fac­tur­ing per­spec­tive.”

Take­da’s on­go­ing re­struc­tur­ing has hit an­oth­er De­nali pro­gram as an eight-year-old part­ner­ship comes to an end be­tween the two com­pa­nies.

Take­da re­turned the full rights to a De­nali drug called DNL593 ahead of a Phase 1/2 read­out. The pro­gram is de­signed to treat fron­totem­po­ral de­men­tia caused by mu­ta­tions in the gran­ulin gene, one of the most com­mon ge­net­ic caus­es of the dis­ease.

The de­ci­sion was “not re­lat­ed” to any of the pro­gram’s ef­fi­ca­cy or safe­ty da­ta, ac­cord­ing to a De­nali press re­lease. De­nali has led DNL593’s de­vel­op­ment so far and is aim­ing to re­port da­ta by the end of 2026.

Take­da and De­nali orig­i­nal­ly signed their col­lab­o­ra­tion in 2018 to work on three pro­grams in neu­rode­gen­er­a­tive dis­eases. Take­da orig­i­nal­ly paid $150 mil­lion up­front and promised more than $1 bil­lion in to­tal mile­stones. For DNL593, De­nali could have earned up to $315 mil­lion in biobucks, ac­cord­ing to SEC doc­u­ments.

Am­gen said that an in­jectable ver­sion of its eye drug Te­pez­za suc­ceed­ed in a Phase 3 study for thy­roid eye dis­ease, set­ting up a show­down with Virid&