Finding Balance After the Biotech Boom
The biotech sector has experienced significant change since 2021. That year saw exceptional investor enthusiasm—particularly benefiting oncology and advanced therapeutic approaches like cell and gene therapy. The subsequent market correction in 2022–2023 pushed companies to reassess their priorities and spending. In 2025 renewed confidence emerges—especially for companies with proven science and clear patient benefits.
This market evolution has also transformed contract research organizations (CROs). The global CRO market was valued at $48.4 billion in 2020 and is projected to surpass $100 billion by 2028.1 However, today’s Sponsors seek more than basic outsourcing—they need comprehensive partners who can guide complex regulatory pathways, manage specialized laboratory work, and develop effective commercial strategies.
Three key trends are reshaping biotech’s future: the funding recovery, innovations in cell and gene therapy, and the emergence of CROs offering complete, integrated solutions.
The New Biotech Funding Reality in 2025
In 2021, biotech startups worldwide secured over $70.9 billion in venture funding,2 while U.S. biotech IPOs cumulatively raised about $14 billion that same year.3 This capital surge drove a wave of new entrants and rapid growth. However, by late 2022, funding dropped by 35–40% compared to 2021’s highs,4 as inflation concerns, global uncertainties, and market performance led investors to become more selective. This shift forced early-stage companies to adapt their development plans.
Today, there remains substantial funding available—but it is exclusively for promising programs. Investors now direct resources to platforms and assets with clear advantages: validated targets, strong biomarker evidence, and well-defined regulatory strategies.
“Not every chemical entity should be funded…but enough capital for those with quality science is critical,” observes Chad Clark, President and COO of Precision Medicine Group, who has seen how companies with compelling data continue to secure funding. “There’s been more optimism this year than over the past couple of years, even though maybe the indices say differently. Our clients are feeling better.”
Impact on Development Strategy
The current funding environment rewards thoughtful design in preclinical and early-phase work. Strong efficacy signals and biomarker correlations increase the likelihood of securing additional rounds. Companies are also planning earlier for potential acquisitions or partnerships, reflecting major pharmaceutical companies’ interest in reduced-risk assets.
Organizations that incorporate regulatory and commercial planning into their clinical approach often attract more investment. Today’s investors look beyond the science—they want clear paths to market, including payer considerations, real-world evidence, and pricing strategies.
Cell & Gene Therapy’s Expanding Reach—Solid Tumors and Beyond
Cell and gene therapies (CGTs) initially found success in specific blood cancers. Treatments like Kymriah and Yescarta showed how engineered T-cells could improve survival rates in certain leukemias and lymphomas. The challenge of applying these approaches to solid tumors remained—until recently.
Two key approvals targeting solid tumors in 2024 demonstrated CGTs’ broader potential in oncology. Industry experts anticipate more approvals in 2025, potentially fulfilling Scott Gottlieb’s prediction of 10–20 cell and gene therapy approvals annually by the mid-2020s. Notably, the CGT market overall is predicted to reach $74.24 billion by 2027,5 reflecting the sector’s rapid expansion.
“We saw two approvals for solid tumors, which is unprecedented,” notes Harpreet Singh, MD, CMO at Precision for Medicine and former FDA Director. “I think we’ll see more breakthroughs soon—especially in high-need areas.”
4 Market Challenges in Advanced Therapies
- Production Constraints: Patient-specific processes require significant time and resources. Building reliable, scalable supply chains remains essential.
- Payment Solutions: With treatment costs reaching $1–2 million per patient, securing insurer support presents challenges. Performance-based contracts linking payment to outcomes are gaining acceptance.
- Trial Innovation: Patient recruitment for CGT studies requires new approaches, particularly for rare cancers. Companies increasingly use adaptive designs and basket trials to gather meaningful data efficiently.
- Securing Early-Stage Funding: The high cost and complexity of advanced therapies make securing capital in the early phases a critical hurdle. Investors are more selective, favoring programs with strong preclinical data, clear regulatory strategies, and defined commercial pathways
How a Next-Generation CRO Supports Next-Gen Therapies
The complexities of CGTs drive sponsors toward CROs with scientific depth and comprehensive services, including:
- Biomarker Development: Identifying biomarkers that guide patient selection and measure responses effectively
- Regulatory Navigation: Supporting accelerated pathway applications like Regenerative Medicine Advanced Therapy (RMAT) designation
- Market Strategy: Building evidence of real-world value and establishing payment pathways
Advancements in CRO Services
Traditional CRO services focused on trial monitoring and data management. Modern biotech programs—especially in cell and gene therapy—require a unified approach combining:
- Advanced Research: Specialized laboratory work, genetic analysis, and robust data science
- Flexible Trial Management: Innovative study designs and targeted recruitment approaches
- Regulatory Leadership: Direct agency experience to optimize approval pathways
- Market Preparation: Payment negotiations, economic modeling, and evidence generation
- Investment Strategy: Clear communication of both clinical and financial value
While large CROs offer multiple services, next-generation providers stand out through seamless integration. They ensure insights flow naturally between stages—from early research through commercialization. Given the overall drug development success rate stands at around 7.9% and only 5.3% for oncology,6 integrated expertise can help sponsors navigate the high-risk environment more effectively.
A New Model for Partnership
Precision exemplifies this evolution, operating as an integrated entity that combines clinical excellence, laboratory science, regulatory and manufacturing expertise, along with a host of commercial and investor relations capabilities.
In 2023 and 2024 alone, Precision's fully integrated investor relations function helped biotech companies secure over $10 billion in funding, giving clients the financial traction needed to drive development, build visibility, and reach key milestones. Sponsors report that this comprehensive approach improves efficiency and builds confidence—knowing one partner can guide them from initial biomarkers through market launch.
“A biotech sponsor told me they felt our team cared about their timelines and patient population as much as they did,” shares Margaret Keegan, CEO of Precision Medicine Group, “that’s the difference an integrated and genuinely invested partner can make."
This shift reflects the industry’s move from transactional relationships to strategic partnerships, particularly in developing transformative treatments.
Strategic Priorities for 2025
Building a Strong Financial Foundation
- Success in today's market requires more than promising science. Companies that thrive typically show concrete progress through validated biomarkers or compelling clinical data. They start planning their market approach early and keep their funding options open, from venture capital to strategic partnerships.
Improving Cell & Gene Therapy Development
- The path to successful CGT development starts with robust manufacturing. Smart trial design can help overcome recruitment challenges, while early planning for market access helps avoid common pitfalls. Getting these fundamentals right early makes later stages smoother.
Choosing the Right Partners
- The best partnerships bring together complementary strengths. Look for collaborators who can bridge the gaps between research, clinical development, and commercialization. Ensure their regulatory expertise matches your program needs, and that their working style fits your company's culture and goals.
Looking Forward
Focused funding, CGT advancement, and evolving partnerships. Success in 2025 will require balancing scientific progress with strategic planning—from generating robust clinical evidence to preparing for market access and maintaining investor confidence.
In an environment where multiple stakeholders influence outcomes, the ability to combine scientific excellence with regulatory insight and commercial strategy becomes essential. Whether launching a cell therapy trial or navigating market dynamics, organizations that embrace collaborative, patient-focused development will lead the transformation of innovative science into life-changing treatments.
2025 will be a defining year for those bringing breakthrough therapies to patients. But success won't come from science alone—it requires the right strategy, seamless execution, and expert guidance.
Precision’s integrated approach is helping more biotech leaders navigate these hurdles with confidence. As the industry moves forward, those who partner wisely will be the ones shaping the future.
Accelerate your journey from pre-IND to post-market success with Precision.
References
- PitchBook. 2021 Annual Venture Report. Published January 2022.
- BioPharma Dive. Biotech IPOs in 2021: The Numbers. Published December 2021.
- Evaluate Vantage. Funding Trends in Biotech 2022. Published Q1 2023.
- Grand View Research. Contract Research Organization Market Size & Trends Report. 2022 Update.
- Precedence Research. Cell & Gene Therapy Market (2021–2027). Published 2022.
- BIO, Informa Pharma Intelligence, QLS Advisors. Clinical Development Success Rates 2011–2020. Published 2021.
