Gene Therapy Field Ends 2025 With Renewed Investment Despite Safety Setbacks

After a difficult year marked by high-profile safety events, funding declines, and regulatory uncertainty, the gene therapy field closed 2025 with renewed optimism and increased investment, as new FDA approvals and multimillion-dollar financing rounds signaled a turnaround.

The XBI biotech index, which usually indicates the state of the U.S. biotech industry, hit a pre-COVID low of $66 in April, driven by a continued financial slump after an all-time high in 2021 and financial uncertainty triggered by tariffs and inflation concerns. Within weeks of taking office, the new administration began cutting National Institutes of Health (NIH) research funding, amounting to around $9.5 billion in cuts by June. A series of around 20,000 redundancies at the FDA, Centers for Disease Control and Prevention, and NIH over the year also appeared to slow regulatory review and make outcomes more uncertain.

In February, Pfizer announced it was discontinuing production of Beqvez, its hemophilia B AAV-based gene therapy, after disappointing nonexistent uptake despite FDA approval in 2024, effectively emptying its gene therapy portfolio. Biogen, Roche, and Vertex followed Pfizer's example as the year progressed, either stopping or dramatically reducing their gene therapy or gene editing pipelines. It was a bad year for Sarepta, with three deaths linked to its approved AAV therapy Elevidys for Duchenne muscular dystrophy between March and July. Rocket Pharmaceuticals also reported a therapy-associated death in a Phase II trial of its AAV-based therapy for Danon disease in May, and another AAV-linked death was reported in Capsida's trial of its therapy for developmental and epileptic encephalopathy later in the year.

Towards the end of the year there were signs of improvement with some decent funding rounds, including Kriya Therapeutics' $320 million Series D round in September and Addition Therapeutics' $100 million Series A round in December. Pharma acquisitions, collaborations, and licensing deals with biotechs in the space also increased in the last few months of the year. Investment into gene therapy had previously begun to increase after FDA approvals of Luxturna and the two CD19 CAR T cell therapies Kymriah and Yescarta in 2017, with more than 1,300 new trials listed as ongoing or completed worldwide between 2017 and 2023. Overall investment in the cell and gene therapy sector rose from around $4.5 billion in 2017 to a high of $23.1 billion in 2021.

Regeneron Pharmaceuticals secured U.S. FDA approvals expanding Dupixent to children aged 2 to 11 with chronic spontaneous urticaria and granted accelerated approval for Otarmeni, a one-time in vivo gene therapy for ultra-rare OTOF-related hearing loss. In its first-quarter 2026 results, Regeneron reported revenue of US$3,605.4 million and net income of US$727.2 million, affirmed a quarterly dividend of US$0.94 per share for payment on June 4, 2026, completed a prior US$2.31 billion buyback, and authorized a new share repurchase program of up to US$3.00 billion.

Gene therapies can now cure diseases like sickle cell with a single treatment, but they come with a price tag that would have been unthinkable a decade ago — often $2 million or more per patient. The Centers for Medicare and Medicaid Services launched the Cell and Gene Therapy Access Model, a voluntary program designed to help state Medicaid agencies improve access to high-cost gene therapies through multistate purchasing and outcomes-based payment arrangements. Yet many eligible patients are not receiving these therapies because the health system lacks mechanisms to absorb large upfront costs for treatments that deliver value over decades. The FDA recently issued draft guidance intended to accelerate the development and review of cell and gene therapies, underscoring how rapidly the science continues to advance. A proposed approach would treat access as a financing problem, with private capital funding treatment upfront and repayment linked to outcomes and long-term savings, functioning much like amortizing a large capital investment.

SonoThera raised a $125 million Series B financing round led by Vida Ventures, joined by investors including Johnson & Johnson, Bayer, Otsuka, UCB Ventures, ARK Invest and several existing backers. The South San Francisco-based company will use the funding to advance its lead programs in Duchenne muscular dystrophy (DMD) and autosomal dominant polycystic kidney disease (ADPKD), while continuing to develop a platform designed to make genetic medicines safer, more targeted and repeatable. Rather than relying on viruses, the company combines standard clinical ultrasound with microscopic gas-filled bubbles known as microbubbles to temporarily open pathways into cells, allowing genetic material to enter. Because the approach avoids viral delivery, it may also avoid some of the immune responses that have historically limited repeat treatment.

Separately, the 'Gene Therapy Collaboration and Licensing Deals 2016-2026' report added to ResearchAndMarkets.com provides a structured analysis of 850+ gene therapy collaboration and licensing deals, including financial terms and SEC-filed agreements.