A Culture of Success – Emerging Trends in Cell Technology

By Dominique Lefebvre and Peter Bak, PhD

Overview

The ability to facilitate the growth and expansion of mammalian cells in vitro has been at the backbone of a wave of therapeutic innovations in the biotech space. Increasingly the know-how, materials, and equipment to harness cells as factories to produce complex proteins for therapeutic uses is being directed toward consumer applications. 

As an example, cultured meat is manufactured for human consumption by growing animal cells in vitro. In 2023, the FDA and USDA approved Upside Foods’ and Good Meat’s cultivated chicken for commercial production and sale. A key challenge for the next stage of this and other emerging technologies (e.g., VitroLab’s lab-grown leather, Biomilq’s cultured breast milk) is to bring down costs and make it viable for mass-production.

While a more established technologies, the propagation and growth of cells as medicine faces its own manufacturing challenges as demand is outpacing capacity. Significant innovation is occurring to streamline and scale cell processes for timely and cost-effective manufacturing. Given the critical nature of production and scale to both medical and consumer applications, Back Bay Life Science Advisors assessed the financing landscape for cell culture technologies across these business models.

Venture financing volume for cell agriculture technologies has increased, with more emerging companies developing across both therapeutics and agriculture.

Investment in cell agriculture technology (i.e., cultured meat and related manufacturing) was sparse prior to 2020, with 16x less investment volume than in the therapeutics space. However, 2020 was a watershed year in the field with several notable technological and regulatory advancements. Mosa Meat announced they were able to significantly reduce the cost of their cell-culture medium by successfully developing animal-free media. The Cultivated Meat Modeling Consortium developed a proof-of-concept model for large-scale cultured meat manufacturing. Alongside progress in scaffold technologies, Nature published a notable research article on soy protein scaffolds (Ben-Arye et al, 2020) which provide support for cells while mimicking the extracellular matrix of tissues. Singapore was the first country to grant regulatory approval for cultured meat in 2020. As a result, from 2020 onwards, investment volume in cell therapeutic technology was therefore only 5-7x higher (Figure 1), highlighting cultured meat as an area of high growth. Nevertheless, venture financing volume across both industries decreased in 2022 relative to 2021 similar to macrotrends observed within life sciences.

FIGURE 1
Number of Venture Financings (Series A - Series D) for Cell Technology Developers by Industry

Source: Pitchbook

Since 2018, cell technology companies have raised upwards of $20B in venture capital (Figure 2), with cell agriculture technology capturing ~9% of total funds. Despite the lower financing volume in cell agriculture technology, the average deal size remained similar across therapeutics and agriculture sectors in 2021 and 2022 (Figure 3).

FIGURE 2
Aggregate Venture Financings (Series A - Series D) for Cell Technology Developers by Industry

Source: Pitchbook

FIGURE 3
Average Venture Financings (Series A - Series D) for Cell Technology Developers by Industry

Source: Pitchbook

Several biotechnology companies have begun to capitalize on the cell culturing technology opportunity.

The majority of financings have been for companies solely focused on therapeutics discovery, development, and manufacturing (Figure 4). VC-funded CROs and CDMOs have mostly focused on therapeutics but have an opportunity to expand into agriculture with similar cell culturing equipment and processes. Cultured meat developers captured only a small portion (~10%) of the financing landscape within the past 5 years. However, the area with significant industry overlap was with cell biotechnology companies.

FIGURE 4
Venture Financings (Series A - Series D) for Cell Technology Developers by Company Type and Industry

Source: Pitchbook

Cell biotechnology companies focused on both therapeutics and agriculture include manufacturing process, equipment, cell line, cell culturing component, and scaffold developers (Figure 5). For example, CellRev and Unicorn are developing manufacturing technologies to streamline and scale cell culturing processes, while Core Biogenesis and Qkine have developed animal-free growth factors and cytokines to reduce the cost and variability of culture consumables.

FIGURE 5
Select Cell Technology Companies within Overlapping Industries

Source: Pitchbook, Company Sites and Press Releases

Looking to capital markets, cultured meat made an appearance on the stock market with Steakholder Foods (formerly MeaTech 3D), a cultured meat developer, but the stock has not been performing well as of H2:2023. As for strategics, the transaction landscape is currently sparse but has started to include some larger partners. For example, Thermo Fisher Scientific announced a partnership with SuperMeat in 2022 to create an open-source tech platform to produce cost-effective cultivated meat.

Outlook

Overall, cultured meat is a nascent technology, however, we expect to see continued investment in this budding industry. As therapeutic developers, manufacturers, and CDMOs are innovating emerging technologies to create streamlined and scalable cell processes, the adjacent cellular agriculture industry may continue to profit from the therapeutics industry’s innovations. Cellular technology developers may decide to expand their reach by servicing both industries unlocking potential adjacent opportunities for CDMOs, equipment, manufacturing process, and cell component developers in space.