Our Thesis on Cell Therapy Infrastructure

At 2048 Ventures, we are obsessed with the future and seek out early-stage companies poised to redefine their industries while establishing defensibility through data and technology. Lately, we have been thinking about the cell therapy landscape, and the unique challenges and opportunities it presents when it comes to manufacturing scalability and efficiency.

With the FDA anticipating 10 to 20 new cell therapy approvals annually, starting this year, the need for robust, scalable manufacturing solutions has never been more critical. In addition, it is clear to us that current processes are ripe for innovation.

In this rapidly evolving field, we anticipate two future inevitabilities:

1. The adoption of cell therapies will continue to grow, fueled by advancements in oncology, rare diseases, and regenerative medicine.
2. Manufacturing processes will become increasingly automated, necessitating robust hardware and software solutions to ensure scalability, cost-efficiency, and reproducibility.

Bottlenecks and opportunities created

Current cell therapy production scales are inadequate compared to the growing global demand. The commercial production of cell therapies is currently falling short, yielding fewer than 5,000 doses annually in a market that requires millions. While this bottleneck is largely tied to inefficient methods for manufacturing autologous cell therapies, personalized medicine will nevertheless require scalable and efficient cell therapy manufacturing even as off-the-shelf and in vivo modalities mature.

We have identified several bottlenecks and opportunities in this sector:

• Operational inefficiencies: Cell therapy manufacturing currently relies on heavily manual tasks, resulting in a higher risk of contamination, errors, and inconsistent batch quality, with process failure rates that can reach up to 18%. In addition, they require costly, highly trained personnel, and face high staff turnover. There is an opportunity for automated closed-loop manufacturing and better software able to predict outcomes, optimize the process and enable decentralized manufacturing. Examples include Cellares or MultiplyLabs.
• Long turnaround times: Long culture times significantly prolong production cycles and limit scalability. There is an opportunity to develop faster cell expansion technologies, pre-optimized allogeneic cell banks, and processes that increase yields to shorten production times and reduce costs. Examples include Enoda Cellworks or Biolinco.
• Process inefficiencies: There are significant challenges in optimizing yields, purifying products, and precisely controlling cell fate. There is an opportunity to develop technologies that enhance cell expansion and functionality, streamline purification, and refine cell fate control. Examples include Plurify Bio, TreeFrog Therapeutics, GC Therapeutics, Mogrify or iOrganBio.
• Lack of real-time quality control (QC): Current retrospective QC extends lead times and risks non-compliance in cell therapy. An example of this challenge is found in the release testing iPSC-derived therapies, which involves multiple assays (sterility, potency, identity, etc.) and delays product release. There is an opportunity to integrate real-time monitoring sensors and software to enable testing and proactive adjustments in parallel with the manufacturing process. Examples include Cellares or LumaCyte.

Current processes are ripe for innovation

We believe there is room for an integrated manufacturing ecosystem combining flexible automation hardware with a software layer to enable:

• End-to-end process control: Seamlessly managing workflows, from raw materials to final product with minimal human intervention.
• Adaptability for diverse cell therapy modalities and complex cell modifications (e.g. multi-step differentiation and precise gene editing).
• Scalability with modular systems adaptable to decentralized manufacturing setups.
• Advanced in-line QA/QC: Incorporating real-time monitoring and analytics.
• Regulatory reporting: Simplifying compliance through automated documentation and harmonization with global regulatory standards.
• Traceability and comprehensive tracking of materials, processes, and chain of custody.

Additionally, there is room for cell engineering solutions that increase efficiency of cell therapy manufacturing by focusing on:

• Yield optimization: Improving cell expansion, recovery rates, and transduction efficiency through novel technologies and optimized payload transfer methods.
• Cell fate optimization: Developing solutions that guide cell fate decisions, potentially through genetic engineering, small molecules, or other cues to direct cells into desired states or types.
• Purification: Focusing on eliminating unwanted cells, especially crucial in stem cell differentiation. Innovations in this area could not only bypass traditional purification steps, improving process efficiency, but also enhance the safety and efficiency of the final product.

Business models we have observed

We have observed distinct business models for automation platforms and cell engineering innovations aimed at improving the manufacturing process:

• Automation platforms:
  • Installation fee and pay-per use.
  • SaaS model, typically subscription-based fees for software that supports the system.
  • Services model, typically as a fee-for-service or full project contracts.
  • Licensing of manufacturing capacity, such as the agreement between BMS and Cellares, valued up to $380M to secure manufacturing capacity.
• Cell engineering for process improvement:
  • Services model to develop and or manufacture a cell therapy. Typically as a fee-for-service or full project contracts.
  • Licensing fees for proprietary algorithms and / or data, typically as a flat fee or usage-based fees.
  • Strategic partnerships to jointly develop and optimize manufacturing processes or new therapies, often structured as profit sharing or research funding agreements.
  • Licensing fees for a particular engineering, typically involving upfront and milestone payments, and royalties on sales.
  • Vertical integration, leveraging their core innovation to develop wholly owned therapeutic programs.

Startups we want to fund

We are particularly interested in investing in startups developing:

• Manufacturing automation: modular and versatile automation technologies for cell therapy manufacturing, including those with real-time QA/QC protocols, adaptable to various cell therapies and supporting decentralized setups.
• Decision engines for cell fate: a discovery engine or algorithm capable of predicting and directing cell fate decisions during therapy production, ensuring consistency and robustness.
• Cell therapy enhancement engineering: Plug-and-play widgets that can be directly engineered into cell therapies to produce specific desired outcomes like increased expansion or purity.

If you are a founder working in the space, we'd love to connect: 2048.vc/pitch-us