CGT Funding Tops Biologics on Sail-J&J Option Bet Despite Autoimmune CAR-T Deaths

Cell Therapy VC Funding Outpaces Biologics Amidst CAR T Safety Reports

In the third quarter, venture capital funding for cell and gene therapy (CGT) reached $2.2 billion across 51 deals, surpassing biologics ($1.5 billion) for only the second time since 2022, though still behind small molecules ($3.2 billion). This surge occurred despite recent reports of patient deaths in CAR T autoimmune clinical trials by Novartis and Bristol Myers Squibb. A significant driver was Sail Biomedicines' deal with Johnson & Johnson, valued at up to $925 million initially, including a $465 million equity investment and $140 million in development milestones, with J&J securing an exclusive option to acquire Sail later for $2.58 billion.

• Q3 Funding Landscape for Cell and Gene Therapy: Cell and gene therapy (CGT) secured $2.2 billion in venture capital across 51 deals in Q3, marking a significant increase that allowed it to outpace biologics, which raised $1.5 billion. This performance represents only the second time since 2022 that CGT has surpassed biologics in fundraising, although small molecules remained the top category with $3.2 billion.
• Investment Resilience Amidst Safety Concerns: The robust investment in CGT occurred despite recent safety setbacks in the CAR T sector, including multiple reported deaths in autoimmune trials for Novartis' rapcabtagene autoleucel and Bristol Myers Squibb's zolacabtagene autoleucel. Additionally, Caribou Biosciences suspended R&D activities due to a challenging fundraising environment for allogeneic cell therapy, highlighting the sector's complex risk-reward profile.
• Major Strategic Deal Driving Q3 Growth: A key contributor to the Q3 fundraising success was Sail Biomedicines' substantial deal with Johnson & Johnson, initially valued at up to $925 million. This included $785 million in upfront payments, with $465 million as an equity investment, and an additional $140 million in development-based milestones. The agreement also grants J&J an exclusive option to acquire Sail in the future for $2.58 billion, reflecting strong big pharma interest in the in vivo CAR T space.

J&J's Strategic Bet: Evolving Autoimmune Treatment Landscape

The past five years have seen expansion of B cell-directed immune-reset strategies for severe, treatment-refractory autoimmune disease. Teclistamab, a T cell-redirecting bispecific antibody targeting B-cell maturation antigen, was evaluated in 1 cycle at 5 European centres in eighteen patients (72% women, median age 48.5 years, 10 SSc, 4 IIM, 2 SLE, 1 UCTD, and 1 IgG4-RD) with a median of 5 prior therapies and a median cumulative dose of 6.36 mg/kg. With median follow-up of 5.1 months (range, 0.8-21.2 months), B-cell depletion was observed in all patients with significant reductions in autoantibody levels, major clinical responses in 11 (61%) and minimal-to-moderate responses in 4 (22%) despite discontinuation of immunosuppressive therapy, while 22 cytokine release syndrome episodes (16 grade 1 and 6 grade 2) occurred in 12 patients (67%), all patients developed severe hypogammaglobulinaemia, 5 (28%) experienced severe infections, two patients developed an inflammatory bowel disease-like colitis, and two patients with severe SSc-associated cardiac involvement died. A systematic review of CAR T cell therapy beyond oncology reported the strongest early clinical signals with B cell-directed CAR T cell therapy for severe, refractory autoimmune diseases, particularly systemic lupus erythematosus, systemic sclerosis, and inflammatory myopathies. In systemic lupus erythematosus, the multicentre prospective observational REVEAL study of anifrolumab, a type I interferon receptor antagonist, enrolled 236 patients (219 [93%] female, median SLEDAI-2K 7 [IQR 6-9]) with mucocutaneous (157 [67%]) and articular (116 [49%]) involvement as main indications; at 6 months, 37 (26%) of 140 patients reached remission, 80 (57%) reached LLDAS5 and 93 (66%) reached LLDAS, with 108 adverse events recorded of which 83 (77%) were infections and five serious adverse events resulting in six hospitalisations.

Janus kinase inhibition has matured into a differentiated class with dose-dependent efficacy and agent-specific safety across rheumatoid arthritis, psoriatic arthritis and Crohn's disease. In Crohn's disease, a dose-dependent network meta-analysis of nine trials (n = 4838) evaluating upadacitinib, tofacitinib, and filgotinib found upadacitinib 45 mg once daily achieved the greatest improvement in CDAI remission versus placebo (RR 1.8, 95% CrI 1.1-3.0), with SUCRA rankings placing upadacitinib highest for overall clinical remission, CDAI mean change, and CDAI remission, while serious adverse events were more frequent with JAK inhibitors versus placebo (RR 1.61, 95% CI 1.15-2.25; p = 0.0082) and upadacitinib increased overall adverse events versus placebo (RR 1.19, 95% CI 1.07-1.33) and serious infections (RR 5.39, 95% CI 2.98-9.74). In rheumatoid arthritis, the SELECT-COMPARE study demonstrated upadacitinib 15 mg outperformed adalimumab with higher 12-week American College of Rheumatology (ACR) 20 (71% vs. 63%), ACR50 (45% vs. 29%), and ACR70 responses with sustained efficacy extending beyond 5 years, and an integrated analysis of five phase III trials in 3834 patients for 4020.1 patient-years showed upper respiratory tract infection, nasopharyngitis and urinary tract infection as the most commonly reported treatment-emergent adverse events, rates of serious infection similar between upadacitinib 15 mg and adalimumab but higher compared with methotrexate, rates of herpes zoster and creatine phosphokinase (CPK) elevations higher in both upadacitinib groups versus methotrexate and adalimumab, rates of gastrointestinal perforations higher with upadacitinib 30 mg, and rates of deaths, malignancies, adjudicated major adverse cardiovascular events (MACEs) and venous thromboembolic events (VTEs) similar across treatment groups. Filgotinib 100 and 200 mg doses + MTX demonstrated rapid effects in reducing disease activity, pain, and fatigue and improving functional outcomes compared with MTX monotherapy or adalimumab + MTX, with efficacy sustained in the long-term (3 years) while minimizing radiographic progression, and 200 mg FIL + MTX significantly reduced radiographic progression uncoupled from disease activity, outperforming adalimumab + MTX in patients with medium or high disease activity. In psoriatic arthritis, Bayesian network meta-analysis showed guselkumab 100 mg every 8 weeks (Q8W) and every 4 weeks (Q4W) were comparable to most other agents including risankizumab, upadacitinib, subcutaneous TNF inhibitors and most IL-17A inhibitors for ACR 20, while for PASI 90 guselkumab Q8W and Q4W were better than multiple agents including subcutaneous TNF and JAK inhibitors.

Utilization data and treat-to-target trials show a shift from conventional synthetic DMARD dominance toward earlier targeted synthetic and biologic use without added benefit from autoantibody-stratified intensification as tested. A US commercial claims analysis of 407,728 DMARD initiation episodes among 229,365 unique patients with RA (median age: 50 years [IQR], 44-58 years; 79.4% female) found csDMARD initiation declining from 79.9% of initiations in 2001 to 54.7% by 2021 (p < 0.001 for trend), bDMARDs increasing from 20.3% in 2001 to 33.1% in 2021 (p < 0.001) and tsDMARDs increasing from 0.1% in 2012 to 12.2% in 2021 (p = 0.171), with methotrexate remaining the most initiated DMARD albeit declining from 28.7% to 15.0% (p < 0.001), adalimumab the most frequently initiated bDMARD (13.3% in 2003 and 12.2% in 2021; p = 0.05) and predominant first-line b/tsDMARD initiated (> 40%), tofacitinib initiation peaking at 8.9% in 2019 and declining to 4.4% in 2021 while upadacitinib initiation increased from 1.2% to 7.6% during the same period (p < 0.001), and biosimilar uptake stayed below 1%. The multicentre, randomised, open-label PRIMERA trial in 308 DMARD-naive RA patients (152 tailor-made; 156 routine care) testing first-line DMARD selection stratified by autoantibody status with rapid intensification guided by early response versus routine care starting MTX with glucocorticoid bridging found ts/bDMARD use at 10 months was 21% in the tailor-made approach vs 17% in routine care (one-sided p = 0.20) with similar mean DAS trajectories (p = 0.57) and no differences in mean patient-reported outcome measure trajectories or adverse events.

Balancing Innovation and Safety in Autoimmune CAR T

Across autoimmune trials, infections represent the dominant safety signal, with serious, opportunistic and herpes zoster events reported for TNF inhibitors, tocilizumab, rituximab, abatacept and tofacitinib. Malignancy, cardiovascular events, laboratory abnormalities and treatment discontinuations due to adverse events further characterize the safety profile. Risk varies by agent, prior biologic exposure and concomitant medications.

• Serious and opportunistic infections: In inflammatory bowel disease trials, 39 (0.9%) opportunistic infections occurred among 4,135 patients allocated to anti-TNFα therapy compared with 9 (0.3%) among 2,919 assigned to placebo, with relative risk 2.05; 95% CI 1.10-3.85, NNH=500; 95% CI 200-1,567. Among patients receiving active therapy these included eight cases of Mycobacterium tuberculosis, eight cases of herpes simplex infection, six cases of oral or esophageal candidiasis, six cases of herpes zoster infection, two cases of varicella-zoster virus infection, two cases of cytomegalovirus or Epstein-Barr virus infection, and one case of Nocardia infection. The RR of tuberculosis infection was 2.52 (95% CI 0.62-10.21). TNF inhibitors carry increased risk of infection including serious infections by bacterial pathogens, atypical fungi and opportunistic pathogens.

• Incidence rates of hospitalised and significant infections by agent: Estimated incidence rates (95% CIs) for abatacept, rituximab, tocilizumab, and tumor necrosis factor inhibitors were 3.04 (2.49, 3.72), 3.72 (2.99, 4.62), 5.45 (4.26, 6.96), and 4.90 (4.41, 5.44), respectively. Incidence rates (95% CIs) for tofacitinib 5 and 10 mg twice daily (BID) in phase 3 trials were 3.02 (2.25, 4.05) and 3.00 (2.24, 4.02), respectively, with corresponding rates in long-term extension studies of 2.50 (2.05, 3.04) and 3.19 (2.74, 3.72). In the SUNSTONE Registry, 341 significant infections occurred in 197 patients (19.9%), with incidence rates (95% CI) for significant infections, CVT events, and seizures of 8.87 (7.98, 9.86), 1.95 (1.56, 2.45), and 0.18 (0.09, 0.38) per 100 PYs, respectively. Rates of hospitalised infection among biological-free patients and switchers were 4.6 and 7.0 per 100 person-years, respectively.

• Herpes zoster and respiratory infections: The incidence of herpes zoster was 9.96 episodes per 1000 patient-years, with independent risk factors including older age, prednisone use, medications used to treat moderate and severe rheumatoid arthritis, malignancy, chronic lung disease, renal failure, and liver disease. Among patients receiving tumor necrosis factor-alpha antagonists, etanercept (hazard ratio, 0.62) and adalimumab (hazard ratio, 0.53) were associated with a lower risk of herpes zoster. Among 207 patients with RA who received TCZ, 58 (28.0%) developed at least one clinically significant infection, with respiratory tract infections the most common (82.8%), followed by urinary tract infections (8.6%).

• Malignancy signals: In the integrated safety analysis of abatacept, rates of malignancies were 3.7% and 2.9% for abatacept and placebo recipients. Evidence from registries suggests that there is no increased risk of solid tumours with TNF inhibitor treatment; however, non-melanoma skin cancers are more common. Biologic DMARDs, including TNF inhibitors, rituximab, and abatacept, have not been linked to increased cancer recurrence, though caution is advised in patients with a history of skin cancer. JAK inhibitors have shown increased risk of lung cancer in older patients with cardiovascular risk factors.

• Agent-specific toxicities and laboratory changes: Specific risks include gastrointestinal perforation with tocilizumab, progressive multifocal leucoencephalopathy with rituximab and pulmonary infections with abatacept. MTX is associated with risks of hepatotoxicity and cytopenia, as well as pneumonitis, particularly during the first year of treatment. In tofacitinib groups, neutrophil counts decreased, hemoglobin and low- and high-density lipoprotein cholesterol levels increased, and serum creatinine levels had small increases, with 2 cases of tuberculosis, 2 cases of other opportunistic infections, 3 cardiovascular events, and 4 deaths.

• Discontinuations, mortality and tolerability: In 5 core abatacept trials, discontinuations due to adverse events ranged from 1.9% to 8.7% of abatacept recipients and 0.9% to 4.3% of placebo recipients, with serious infections reported in 3.0% of abatacept recipients and 1.9% of placebo recipients. During rituximab long-term follow-up of 3844 patient-years, 64 patients died (crude mortality [95% CI]: 1.66 per 100 PYs [1.30, 2.13]), with most common causes death of infections (19 patients), malignancy (14), and cardiovascular events (13). Treatment-emergent adverse events occurred in 96.2% and 87.5% of patients receiving rozibafusp alfa and placebo, respectively, with antibodies to abatacept developing in ≤3% of patients and anti-rozibafusp alfa antibodies in 5 (20%) patients.

Sail's In Vivo CAR T: A Novel Approach for Autoimmune

Recent research is exploring multiple immune pathways that sustain autoreactive B cells, innate sensing, and T cell dysregulation in autoimmune diseases. Strategies range from cytokine and receptor blockade to targeted protein degradation, checkpoint modulation, and tolerogenic vaccines aimed at restoring tolerance.

• BAFF/APRIL system and B cell survival receptors: B cell activating factor (BAFF) and a proliferation-inducing ligand (APRIL) signaling through BAFF-R, TACI and BCMA regulates differentiation and survival of B cell subsets, including long-lived plasma cells (LLPCs) and memory B cells (MBCs). Approaches include BAFF-depleting therapy with belimumab, telitacicept, and the enhanced dual APRIL/BAFF antagonist povetacicept (ALPN-303), which suppressed B cell proliferation, differentiation, immunoglobulin secretion, plasmablasts, germinal center B cells, and renal immunoglobulin deposition in models, alongside BCMA-directed chimeric antigen receptor T (CAR-T) cell therapy for cases resistant to conventional B cell depletion.

• Type I interferon pathway and interferon receptor expression: The type I interferon receptor antibody anifrolumab (ANI), a type I interferon receptor antagonist, has demonstrated clinical efficacy in systemic lupus erythematosus (SLE) and is under evaluation in systemic sclerosis (SSc) via the DAISY study. Regulation of type I IFN receptor (IFNAR) expression by NF-E2-related factor 2 (Nrf2) activation, which decreased Ifnar1 and IFN-stimulated gene (ISG) expression and favored proresolving nonclassic macrophages (NCMs), is being investigated as a complementary approach.

• Nucleic acid-sensing Toll-like receptors and downstream IRAK4: Endosomal TLRs (TLR3/7/8/9), particularly TLR7, are targets for systemic lupus erythematosus (SLE), with the TLR7 to TLR9 blocker hydroxychloroquine in long-term use and the human TLR7-specific small-molecule inhibitor TH-407b stabilizing the resting/inactivated state to suppress TLR7-mediated pro-inflammatory signaling. Interleukin-1 Receptor-Associated Kinase 4 (IRAK4), an essential mediator of IL-1R and TLR signaling, is targeted for degradation with PROTACs including KT-474, a potent, selective, and orally bioavailable heterobifunctional IRAK4 degrader.

• CD40/CD40L costimulatory axis: The CD40/CD40L axis drives humoral immune responses, B cell activation and plasma cell differentiation, with Act1 acting as a negative regulator through CD40L and BAFF signaling. The CD40L binding protein VIB4920, which lacks an Fc domain, blocked downstream CD40 signaling, suppressed antigen-specific IgG, reduced circulating Ki67 dividing B cells, class-switched memory B cells, rheumatoid factor autoantibodies and disease activity, and did not induce platelet aggregation.

• Immune checkpoints, JAK-TYK2 signaling, and inflammasome regulation: Co-stimulatory molecules CD28, inducible T-cell co-stimulator (ICOS), OX40, CD40L, glucocorticoid induced tumor necrosis factor receptor (GITR), and CD137 and co-inhibitory molecules programmed cell death 1 (PD-1), cytotoxic T lymphocyte-associated molecule 4 (CTLA-4), T cell immunoglobulin (Ig) and mucin domain-containing protein 3 (TIM-3), B and T lymphocyte attenuator (BTLA), V-domain Ig suppressor of T cell activation (VISTA), T-cell Ig and ITIM domain (TIGIT), CD200, and lymphocyte activation gene 3 (LAG-3) are explored as potential targets in ANCA associated vasculitis (AAV). Selective signaling inhibition includes the allosteric TYK2 inhibitor deucravacitinib targeting the regulatory pseudokinase domain, the JAK1-specific inhibitor LW402, and NLRP3 inflammasome blockade to reduce interleukin (IL)-1β and IL-18 secretion, alongside GM-CSF-neuroantigen (GMCSF-NAg) tolerogenic vaccines to expand CD4+ CD25+ FOXP3+ Tregs.