Cell & Gene Therapy Outsourcing's New Paradigm

By Jeffrey S. Buguliskis, PhD, Deputy Chief Editor, Outsourced Pharma

The industry has flipped from scarcity to surplus, and sponsors now have leverage to set terms, not take numbers

Remember a few years ago when pop-up ramen joints were all the rage? I was living in Brooklyn at the time and would pass by the latest “hotspot,” which had hour-long lines, sold-out broth by noon, and a snobby host telling you, “maybe” you could get a sample of a noodle…if you waited two more hours. A couple of years later, you can stroll in at 7 pm, no reservation needed. Well, cell and gene therapy (CGT) outsourcing feels a bit similar in 2025. The line’s gone. The kitchens are staffed. And sponsors who once begged for slots can finally act like customers again.

From Scarcity Theater to a Buyer’s Market

The swing wasn’t random. Capital tightened, early pipelines cooled, and teams got sober about what it takes to traverse tech transfer to process performance qualification (PPQ) at real-world speeds and costs. As gene therapy pioneer Jim Wilson, MD, PhD, Founder, President & CEO of GemmaBio and Founder & Executive Chair of Franklin Biolabs, puts it: “We have to be extraordinarily capital efficient with the way that we develop our products and we finance our companies…because cash is hard to find right now.” That reality leads directly to the make-vs-buy decision.

In this market, sponsors are poised to lean on partners. Wilson’s verdict: “I  think the direction of the industry is going to rely heavily on CDMOs. The biotech industry and cell and gene in particular are  going to rely on them for clinical and commercial, for the foreseeable future.”

Sponsors also face a talent and execution gap at vendors. “Project management is often understaffed and/or immature, resulting in gaps in preparedness that lead to delays,” notes Craig Malzahn, EVP of Product Development and Chief Technology Officer at REGENXBIO.

Make vs Buy in 2025—Use Leverage, Not Bravado

If 2021 forced everyone to outsource out of necessity, 2025 lets you outsource by choice, on your terms. “To state the obvious, when there is plenty of capacity available to buy, how can a company justify risking precious capital to build its own capacity?” explains Joanne Beck, PhD, COO at Elektrofi. “Instead, the risk inherent in outsourcing can be mitigated by hiring experts (permanent staff or consultants) to support development, tech transfer, and manufacturing. Securing manufacturing slots can also be managed through a well-crafted and flexible service level agreement (SLA) that does not overly penalize either party for unutilized capacity.”

The in-house calculus hasn’t disappeared, but it’s stricter. “In-house manufacturing wins on lead times and timing reliability, control of quality, and prioritization decisions. Cost can be impacted by in-house utilization rates,” Malzahn explains. “In-house manufacturing is a long-term investment, a sponsor needs to be confident with its pipeline with multiple shots on goal in which case in-house capability pays off.”

Today’s capacity surplus shifts the make-vs-buy decision toward outsourcing unless utilization can stay consistently high. Sponsors should only build if they can keep facilities humming—otherwise, negotiate for flexible access and stronger SLAs. [Getty Images]

So what's the bottom line? Build only if you’ll keep it hot and loaded. If you can’t keep a facility above 70–80% utilization, don’t build—negotiate. Buy smart, and bring the people who make outsourcing work.

“I think it's a good time for sponsors to evaluate and make commitments to CDMOs… I think this is a much better time than it was 5 years ago. It's completely flipped,” Wilson points out.

Platforms, Portability, and Pitfalls—What Actually Scales

Platforms help, but only where biology and engineering truly rhyme. Treat them like speed lanes, not get-out-of-jail cards. A sensible starting point is upstream commonality: “Platform host cell lines definitely provide efficiencies across programs,” Malzahn says. Downstream and analytics can also be templated…until they can’t. Even if 80% looks “standard,” the 20% that isn’t is where timelines go to die. That’s why an early comparability stress test across equipment matters. “Wet work needs to be done using different vendors’ equipment (production bioreactors and chromatography systems, primarily) to evaluate comparability risks,” Malzahn concludes.

Beck’s take is similar, explaining that  “all unit operations and analytical methods benefit from platform standardization. However, in some cases, equipment changes may be required for specific applications.” In other words, platform where it makes sense, but include method-portability, raw-data access, and pre-priced change controls, so if you must tweak the process or move sites, you’re covered.

And don’t buy the brochure hype, as she points out, “sponsors overestimate the maturity and compatibility of vendor systems. Vendors will often claim that something is plug-and-play when it is not.”

Wilson’s macro caution on platforms is equally sobering, and he cautioned that while FDA’s platform designation can reduce requirements for follow-on programs, without cross-referencing, you still face an expensive, time-consuming path dominated by commercial readiness, especially with process qualification and PPQ.

Contracts, SLAs, and Benchmarks—Engineer for the New Normal

With capacity to spare, sponsors have bargaining power and disciplined contracts turn leverage into outcomes. Start with ownership and portability. Begin with “100% ownership of the manufacturing process and documentation,” says Malzahn. Ideally, this should be paired with method portability and data/knowledge access as non-negotiables, with appropriate clauses included in the MSA.

“Clients should have unlimited access to all raw and curated data and the right to audit the raw data,” Beck emphasizes. Those three lines—own the process, move the methods, see the data—prevent most long-tail headaches.

Next, shape SLAs to today’s realities using a two-bucket model:

• Financials: binding vs non-binding forecasts; access-for-minimums trades; cost per batch and cost of goods manufactured/cost of goods sold (COGM/COGS) reduction levers
• Performance: release-cycle time SLAs; deviation-closure timelines; yield/potency key performance indicators (KPIs); data-access SLAs

Then wire in pragmatic cost moves vendors can actually execute:

• Automate to lower full-time-equivalent (FTE) load and reduce human error
• Compress cycle time to increase throughput
• Parallelize lots so quality control (QC) can be batched

Effective governance is disciplined and consistent—encompassing a standard joint project team/joint steering committee cadence, functional-lead check-ins, clear escalation paths, and risk registers updated before, not after, variance appears. Example trigger: If two consecutive lots miss the release-cycle-time SLA by more than 10%, escalate the issue to the joint steering committee with a corrective plan.

Well-written MSAs/SLAs convert leverage into outcomes by locking method portability, raw-data audit rights, and pre-priced change bundles. Clear governance triggers help avoid “death by change order” and keep release-cycle time on track. [Getty Images]

Finally, price the platform sensibly. In a market where many processes don’t differ significantly between sponsors, rent-seeking on manufacturing IP backfires. Jim Wilson’s advice is blunt: “No, a 5% royalty is not going to fly.” Shop it. Make vendors compete on execution, predictability, and true portability, not tolls.

Now that the line’s gone, act like a diner with options: read the menu, ask about prep times, and don’t hesitate to send back a dish that misses spec. Treat platforms like house recipes; they speed service and make comparability easier, but you still taste the broth before you buy the bowl. Build your own kitchen only if you can keep it fresh and booming. Otherwise, reserve capacity at places that reliably hit quality and timing, with contracts that include clear cancellation windows, data access, and method portability so you can walk across the street if service slips. The gold rush is over—customers who specify, measure, and adapt will eat well.