And the market is poised to continue to grow. According to a research report published by Grand View Research, the global cell and gene therapy clinical trials market size was valued at $7.3 billion in 2021 and is anticipated to exhibit a compound annual growth rate (CAGR) of 14.6% from 2022 to 2030.
Market growth is due to increases in R&D funding, rising patient demand for innovative therapies, growing interest in cell and gene therapies for cancer treatment, and an attentive regulatory environment. The increase in CGT activity reflects the pharmaceutical industry’s realignment of focus from treating patients and their symptoms to curing diseases through cell and gene therapies.
And this is impacting how pharmaceutical and biomanufacturing C-suite leaders are viewing the real estate market. The growth and diverse needs of CGT research and manufacturing impact the availability, type, location, selection, design, and engineering of facilities.
Faced with a rapidly changing research, production, and real estate landscape, and financial scrutiny from private equity and venture capital investors who are concerned by current economic conditions, pharmaceutical C-suite startup firms can often feel overwhelmed at the number of decisions needed to be made regarding their current and future research and manufacturing facilities. In most cases, funds are available, but a more substantial argument is required to receive funding amidst economic uncertainty. At the same time, the private equity sector is under increasing scrutiny, there is renewed interest from big pharma as they look to make CGT acquisitions in the pre-recession economy, streamline their supply chains, and acquire small companies that are ripe with talent.
Many find hiring a Lab Planning Intermediary to provide valuable guidance and assistance in making critical brick-and-mortar facility and lab planning decisions can be extremely valuable in helping navigate the growth of their company. Below you can find an overview of the benefits of engaging a Lab Planning Intermediary to help guide your real estate decision-making:
C-Suite Age Range and Depth of Experience
It is not uncommon for the C-Suite of startup research firms to have leaders right out of college in executive roles. While these individuals may have the knowledge and qualifications to support scientific discovery, they may not have the experience needed to plan the future of their facility and workforce. Having a resource on your team that has helped guide other startup research entities through the process can be hugely beneficial. Unlike more mature executives who have gained their own experience “coming up through the ranks,” younger executives recognize they do need and welcome assistance from an Intermediary. This type of communication and cooperation adds to the success of the project.
Access to Benchmark Data from Peer Companies
By engaging a lab planning intermediary, your organization will have access to program size, construction cost, and schedule data to help inform your decision-making. It is important to fully vet the Intermediary to make sure they bring a portfolio of experience in similar research modalities, so they understand your firm’s unique needs. In addition to the physical size of the program, there are requirements to operationalize companies and establish a five-year growth and headcount projection. Many companies understandably underestimate the number of people and level of expertise they will need after the R&D/pre-clinic work is concluded and they are into the clinic phase.
Leasing Advocate for the Client
As a result of the pandemic, the commercial real estate market has resulted in a glut of office space and many landlords are looking for ideas on how to repurpose office space for other uses like life science. While landlords may be willing to invest minimally in the infrastructure required to support research, very few commercial properties are developed with laboratories as potential tenants in mind. This is where having a lab planning intermediary can be particularly beneficial. The intermediary can quickly ascertain if a potential building can be easily and cost-effectively upgraded to meet research requirements.
Leasing Advocate for the Landlord
Similarly, the intermediary can help the landlord understand the unique needs of the clientele by explaining the science that is facilitating the search for the new leased space. This allows the landlord to clearly understand the investments needed to lease the space while providing data to determine the residual value once the lease is up. They can also help the landlord understand the organization’s future expansion needs.
Understanding of National Market
Gene therapy research tends to be in urban academic areas. For example, the greater Philadelphia area is ranked first in the nation for the National Institutes of Health grant funding for CGT, attracting more than $3.8 billion in VC and NIH funding last year. As research organizations and startup firms make the leap from research to process development to clinical and commercial manufacturing, square footage requirements increase, often requiring a move to a suburban location. A Lab Planning Intermediary can provide valuable space metrics for pilot plants, cGMP manufacturing, administrative staff, and warehouse storage that can help inform the site selection process.
Decoding Demographic and Workforce Impacts
As stated above, most research takes place in urban academic environments, due in large part to the advanced skill sets required for research activities. A soft factor to take into consideration in your strategic space planning is demographics and preferences of the local workforce. An increasing number of people prefer to take public transportation to reduce their carbon footprint and want to live in urban areas with a good and safe mass transit system. An experienced Lab Planning Intermediary can help identify potential sites that meet cost/SF requirements and meet employee transportation requirements. Needs and requirements will change as the market gets a better sense of how “the office” will look and how comprehensive it will be. In many cases, there is a mixture of people who are collocated in urban research centers and people who are working in other remote locations. This scenario could be accommodated with a decentralized office arrangement featuring a main hub accompanied by spokes in suburban areas — closer to where people live — to cut down on commute time. An intermediary can help justify the business case that drives such decisions as a way to attract and retain the best talent, even amidst traditional thinking guiding decisions in many companies.
Identifying Scalability Issues
Moving from bench-scale research to production-scale manufacturing requires information integration and an understanding of scalability on multiple levels. Volume is what guides space decisions. Bench research is often at a 10 ml scale, while process development may require 100 liters. And full manufacturing is 5x that amount. For example, a lab manager or principal investigator may be able to provide the linear SF of bench space required but may not understand the impact of bench size on HVAC requirements. Warehouse staff often focuses on the amount of space required for raw material storage and packaging but may not translate that into the appropriate number of FTEs. Many organizations planning their first manufacturing facility do not realize the need for a maintenance shop or specific areas required to support the cGMP manufacturing process such as gas storage. A lab planning intermediary can organize disparate pieces of information into a useful document to help guide the facility planning process.
Navigating the Project Delivery Process
To put it simply: the C-Suite at many startup companies “don’t know what you don’t know” and has few reference points for understanding the decision-making process, funding, and costs. A lab planning intermediary can empower companies by identifying options early in the decision-making process and providing recommendations based on size, resources, and money. Often, smaller companies have hired staff from big Pharma, and assume they may understand the stage/gating/ funding approvals. However, be aware that Big Pharma often comes with a more structured process based on experience that can inform their decision-making. Big pharma takes into consideration the costs associated with stringent standards, higher-tier material specifications, and other premium features and amenities that go beyond basic function, and applying those strategies may not be appropriate for a smaller company looking to expand.
Identifying Missing Subject Matter Experts
Making the leap from bench research to production manufacturing takes time and money and many startups may not have the funding to hire regulatory, QA/QC, or maintenance staff until they have begun production. For example, a firm is making the leap from process development to clinical manufacturing and investigating potential sites. While the Lab Planning Intermediary can do test fits to visualize the space required for labs, offices, and manufacturing, there are important questions to resolve before a final decision can be made:
- What markets will you sell your products in?
- Where will your patient population be located? (US? Europe?)
- What are the regulatory requirements in these regions and markets?
The answers to these questions impact layout and operational flow. A true life sciences lab intermediary can provide supplemental SMEs or recommend consultants to provide the GMP experience necessary to navigate the early stages of design, saving the client expensive FTE overhead.
Reducing C-Suite Overload
C-Suite executives are often focused on many other pressing items: courting investors, speaking at conferences to share emerging data, and monitoring research resulting in much stress and very little time to devote to site expansion and design. A lab planning intermediary can help alleviate the stress and organize the pertinent information into “Project Cliff Notes,” keeping them updated without being overwhelmed. It often takes a third party to provide that level of objectivity independent of the biases inherent in a large company. A good Intermediary is part of your team and can determine level of detail to brief C-Suite decision makers and know how to balance the level of detail to support informed decision-making.
CGT has become more mainstream, and clinical trials are moving into full production; a qualified Lab Planning Intermediary can help research organizations realize the full potential of their life transforming technology.