Too Many Seats, Not Enough Passengers: The Coming Shakeout in CGT CDMOs

If you’ve been watching the cell and gene therapy (CGT) market lately, you’ve probably noticed two conflicting headlines:

• Regulatory agencies are getting faster and more adaptive

• CDMOs are reporting soft pipelines and underutilized capacity

This may seem like good news across the board. But beneath the surface, we’re approaching an inflection point—one that could lead to consolidation, specialization, or both.

Let’s unpack what’s happening.

Regulators are Evolving—Faster Than Expected

For years, the regulatory landscape has been one of the biggest constraints in CGT. But that’s changing.

The FDA’s Office of Therapeutic Products (OTP) is now fully operational under its new structure. With a mission to support innovation while increasing review efficiency, the OTP has signaled faster timelines, more specialized reviewers, and greater alignment with the unique challenges of gene therapy.

Meanwhile, the EMA and MHRA are investing in modernization efforts aimed at harmonizing CGT guidance and accelerating reviews of promising therapies for rare or unmet needs.

Net effect: Regulatory tailwinds are getting stronger—especially for therapies with solid early data and serious unmet medical need.

CDMO Capacity Has Caught Up—Maybe Too Much

Between 2020 and 2023, CDMOs raced to expand their capacity. Bioreactors, cleanrooms, fill-finish lines, mRNA suites—everyone added square footage.

But in 2024 and now into 2025, that growth has outpaced demand.

• Fewer venture-backed CGT startups are reaching IND

• Programs are being paused or reprioritized

• Some CDMOs report facility utilization rates below 60%

For the first time in years, there’s a surplus of capacity—and buyers are being more selective.

Translation: Clients aren’t just looking for availability. They’re looking for the right fit, the right partner, and the right model.

A Shakeout Is Coming—And It’s Already Started

When supply outpaces demand in a specialized, capital-intensive industry, something has to give.

Here’s what we’re likely to see next:

1. Consolidation
   M&A activity among CDMOs will pick up. Expect mid-tier players with overlapping capabilities to combine, either for geographic reach or service breadth. Private equity will play a role—though maybe more selectively than in 2021.

2. Specialization
   Some CDMOs will double down on modality, phase, or therapeutic focus—offering best-in-class services in a narrower niche. Think: “We’re the go-to for autologous CAR-T plasmids,” or “We own early-phase AAV analytics.”

3. Operational Restructuring
   Underused facilities will be rationalized, paused, or repurposed. Some CDMOs may pivot to hybrid models (e.g., fee-for-service plus risk-sharing), or look to support academic centers and translational teams as new market segments..

Look closely: You may already see these moves quietly unfolding—especially in firms adjusting their forecasts and signaling “strategic realignments.”

What This Means for Developers (and Marketers)

For therapy developers, this may be the most partner-friendly environment in years. With more options and more leverage, you can optimize for fit—not just availability.

For CDMO marketers? It’s time to rethink the story.

If you're still leading with “we’ve expanded capacity” or “we do it all,” your message may be out of sync with what clients really want: a partner who understands their specific modality, regulatory path, and business goals.

Oversupply is a short-term challenge—but differentiation is how you thrive in a long-term market.

Final Thought:
Markets don’t punish overcapacity forever. They rebalance. The question is: Will your CDMO lead the next wave, or be absorbed by it?

Let’s talk about how to position your brand for what comes next.

Want help refining your message in this new market environment?
Contact Jeff Briganti