Published by Global Banking & Finance Review®
Posted on March 21, 2025
5 min readLast updated: January 24, 2026
Add as preferred source on GoogleGene therapy investments decline as investors shift to weight-loss drugs, driven by economic and policy challenges and safety concerns.
By Deena Beasley
(Reuters) -Gene therapy, with its offer of a possible cure for rare diseases like sickle cell, is losing early investors to higher-reward sectors like obesity and cancer, as sales for some of the new treatments fall short.
In the last year, some drugmakers have pulled back from the sector, including Pfizer, which recently stopped selling its gene therapy for hemophilia priced at $3.5 million per patient. Bluebird Bio, a gene therapy pioneer once worth nearly $10 billion, was sold to private equity firms for $30 million last month.
In 2024, developers of gene therapies and gene-editing products raised less than $1.4 billion across 39 venture rounds, according to a data analysis from DealForma for Reuters. In 2023, they raised $3.5 billion in 60 deals, which was down 57% from the sector's peak of $8.2 billion across 122 deals in 2021.
"There needs to be better ways, cheaper ways to make some of these complex products," in order for investor interest in gene therapy to return, said Subin Baral, Ernst & Young global life sciences deal leader.
Companies like Novartis say they are continuing gene therapy research. More than 95% of infants born in the U.S. with a rare neuromuscular disorder called spinal muscular atrophy are now treated with its Zolgensma gene therapy and it is being developed for older children.
Vertex Pharmaceuticals continues to see patients with sickle cell disease start the process to receive its Casgevy therapy, said Chief Operating Officer Stuart Arbuckle.
He said the treatment, which had 2024 sales of just $10 million, was pursued because the company believed gene editing offered the best solution for people living with the debilitating disease.
Gene therapy — the one-time process of inserting a modified gene to compensate for a faulty gene or change how a patient's cells produce proteins — is a complex procedure in which patients often have to be hospitalized, with insurance coverage not always clear.
The U.S. Food and Drug Administration has supported the breakthrough treatments, which have multimillion-dollar prices.
Peter Marks, director of the FDA's Center for Biologics Evaluation and Research, told Reuters he is confident "speed bumps" including scientific challenges, manufacturing difficulties and real-world application of gene therapies will be worked out. "We need to have a streamlined regulatory process... Combine that with manufacturing improvements to have a package of things to bring down cost so they are no longer cost prohibitive," Marks said earlier this month. "My hope is that we have a group that is going to be here through the next years working on this."
Safety issues are also a concern even after approval. Sarepta Therapeutics said this week a 16-year-old boy died from acute liver failure months after receiving the company's gene therapy for a rare muscular dystrophy.
Weight-loss drugs, meanwhile, are forecast to see annual sales of $150 billion in coming years as new, highly-effective medicines have sparked outsized demand. Obesity therapeutics attracted $1.75 billion in venture capital last year, nearly triple 2023's total of $630 million.
Overall, global biopharma venture funding rose to $27 billion in 2024 from $23.2 billion in 2023. Cancer remained the top sector at $10.3 billion, according to DealForma.
ECONOMICS AND POLICY DIFFICULTIES Unlike traditional drugs that can be made in large quantities for mass distribution, gene therapies are more individualized, requiring specialized equipment and cell processing materials.
"People believe in the promise of gene therapy," said Priya Chandran, biopharmaceuticals sector leader at Boston Consulting Group. "Investment is dropping because the overall economics and policy landscape has been problematic."
The Alliance for Regenerative Medicine, the industry trade group for the cell and gene therapy sector, said it expects investment to be reinvigorated as new trial data emerges.
"The biggest biopharma companies continue to invest as the gene therapy pipeline evolves to tackle diseases with larger patient populations," said ARM spokesman Stephen Majors.
When Pfizer last month stopped selling Beqvez, its gene therapy for hemophilia B, it said demand was weak. The company in 2023 had already backed away from early-stage gene therapy research, and last year abandoned efforts on a gene treatment for muscular dystrophy after disappointing results from a late-stage trial.
Bluebird sells three gene therapies in the U.S., including Lyfgenia for sickle cell disease, which competes with Vertex and CRISPR Therapeutics' Casgevy.
Pfizer and Bluebird did not immediately respond to requests for comment.
Evidence that expensive gene therapies can provide a sustained benefit and will be accepted by patients, doctors and insurers has become more critical as major pharmaceutical companies face the looming loss of market exclusivity for top-selling medicines.
Morgan Stanley estimated that around $175 billion of 2025 U.S. large-cap biopharma revenue – 35% of the total – will go off patent by the end of the decade.
Companies "are trying to invest fast enough so that they can restock their pipelines and hopefully fill the gap," said EY's Baral. "These are capital allocation choices."
(Reporting By Deena Beasley; editing by Caroline Humer and Bill Berkrot)
The article discusses the decline in gene therapy investments as investors focus on weight-loss drugs.
Investors are seeking quicker returns and are attracted to the booming weight-loss drugs sector.
Gene therapy faces economic, policy, manufacturing, and safety challenges.
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