Contract development and manufacturing leaders at Advanced Therapies Week 2025 delivered a stark message: the traditional Contract Development and Manufacturing Organization (CDMO) model for cell and gene therapies must undergo radical transformation to survive.
From market consolidation to artificial intelligence, experts outlined the critical changes needed as the sector matures and highlighted key challenges that must be addressed to ensure sustainable growth for CGT manufacturing.
“Traditional Model is Broken”
The current CDMO approach is facing fundamental challenges, according to Ignacio Nuñez, Chief Operating Officer at CellReady.
“Cell and gene therapy companies are trapped by the traditional CDMO model where the sole focus is delivering drug products at the lowest cost possible on a small to medium scale in the shortest timeline possible,” he warns.
This model forces CDMOs to charge “exorbitant reservation and production fees” because they cannot leverage economies of scale.
Stella Vnook, CEO of Likarda, reinforces this view with a stark assessment of the challenges facing smaller players. “I’ve observed first-hand the financial struggles smaller cell therapy CDMOs face—and these challenges will only intensify unless strategic innovation takes center stage.”
She describes a perfect storm of high operational costs, capital-intensive manufacturing requirements, and persistent reimbursement hurdles.
Adding to these pressures, the talent shortage in specialized manufacturing roles and intense competition from well-funded CDMO giants are creating an increasingly difficult environment for smaller operators.
AI and Digital Transformation
A critical weakness in current operations is the lack of technological sophistication. Michalle Adkins from Emerson USA reveals a concerning reality about the sector’s digital maturity: “Many CDMOs are still working on paper, and even those using digital workflows or electronic lab notebooks have lots of room to improve their ability to be dynamic and flexible.”
Rather than requiring massive capital investments, Adkins advocates for subscription and cloud-based software solutions to bridge this technology gap.
This approach allows companies to align costs with growth while improving data management capabilities and regulatory compliance. The ‘pay-as-you-go’ model would particularly benefit smaller biotechs, enabling them to access sophisticated technologies without overwhelming upfront costs.
Trevor Smith from Terumo Blood & Cell Technologies sees artificial intelligence as the next frontier for CDMO differentiation. “CDMOs that embrace AI as a means of differentiation will likely see themselves standing out, especially when they partner with device companies to dig deep into the platform.” He envisions CDMOs leveraging their unique position to generate digital twins for manufacturing devices, optimize processes across multiple modalities, and enhance product quality through predictive analytics.
Market Consolidation Accelerates
The sector faces increasing consolidation pressure. “The CDMO landscape in 2025 will continue to evolve, driven by ongoing consolidation, with larger players acquiring smaller ones to enhance capacity and capabilities,” predicts John Lee, Global Head of Cell & Gene Therapy at SK pharmteco.
He emphasizes that successful CDMOs must develop strong technical expertise specific to cell and gene therapies, while maintaining robust digital infrastructure and actively engaging in evolving regulatory discussions.
Listen to PharmaSource podcast interview with Joerg Ahlgrimm, CEO of SK pharmteco about why he believes the CDMO industry is heading for significant consolidation: “If you fast forward 10 years, there will probably be 10-15 large, multi-modality CDMOs, with many smaller and specialised ones being bought.”
This consolidation trend becomes particularly clear when viewed through a historical lens. Becky Butler Cap from Vitalant recalls the sector’s evolution: “In the early years of CGT, there were as few as three options for any level of cell production… Today, we’ve seen market adjustments as that overbuilding has resulted in consolidation and liquidation of assets.” This shift reflects a maturing market where quality and capability are becoming more important than mere capacity.
Manufacturing Strategy Evolution
The focus is shifting from pure capacity to strategic capability deployment. Becky predicts that 2025 activity will concentrate on two critical areas: maximizing throughput with commercial partners and developing strategic engagements with early-stage partners.
This dual focus requires CDMOs to excel at both process optimization and innovation, while maintaining the flexibility to adapt to evolving client needs.
The importance of location strategy has also grown significantly. CDMOs must now consider patient proximity, supply chain efficiency, and access to skilled talent pools when planning their manufacturing networks. This geographic strategic positioning has become as crucial as technical capabilities in determining a CDMO’s success.
Claudio Panzarella, Head of Business Development at ReiThera, emphasizes the importance of specialized expertise: “While similarities among CDMOs include a focus on regulatory compliance and cost efficiency, the differences lie in specialization and agility. The decision-making process often hinges on three key factors: track record in delivering complex projects, transparency in communication, and alignment in timelines and goals.”
New Partnership Models
The relationship between CDMOs and their clients must evolve from transactional to strategic, experts argue. William Wei Lim Chin and Alissa Larson from Catalent emphasize this shift:
“Selecting the right CDMO partner is more than a transactional decision, it’s the foundation of a shared journey toward innovation and patient impact.” They advocate for early engagement before challenges arise, ensuring alignment on goals and priorities from the outset.
Lee Markwick from eXmoor Pharma explains why this shift is particularly crucial in cell and gene therapy: “Where CGT differs compared to traditional biologics, is in the complexity of each product and process. Expertise typically doesn’t reside entirely with either the CGT developer or the CDMO – both have something to offer.” This shared expertise model represents a fundamental change in how CDMOs and their clients interact.
Balance Quality and Innovation
Natalia Elizalde, Chief Business Development Officer at VIVEbiotech, emphasizes that quality cannot be compromised in the drive for efficiency. The challenge lies in maintaining rigorous quality standards while embracing innovation and automation.
Joel Eichmann, Co-Founder of Green Elephant Biotech, suggests that “success will hinge on automation and flexibility. The ability to scale efficiently, adapt to evolving process requirements, and integrate automation to reduce costs and timelines will determine which CDMOs thrive.”
Carol Houts from Germfree summarizes the challenge: “The CDMO landscape heading into 2025 is increasingly shaped by the need to balance scalability, speed, and quality while navigating a risk-averse investment environment.”
Looking Ahead
Ran Tsalic from BioProduction by SEKISUI offers a vision of future success: “Those that balance innovation with operational excellence and strong client partnerships will emerge as industry leaders. The future will favour CDMOs that not only manufacture but also actively contribute to process development and strategy.”
The message from industry leaders is clear: the path forward for cell and gene manufacturing will require fundamental changes in how CDMOs operate.
Success in 2025 and beyond will depend on embracing technological innovation, fostering strategic partnerships, and maintaining unwavering commitment to quality – all while adapting to an increasingly complex and competitive landscape. Those organizations that can successfully navigate this transformation while maintaining focus on patient needs will be well-positioned to thrive.
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