Charles River navigates a shifting cell and gene therapy landscape

Rapid advances in cell and gene therapy are reshaping the pharmaceutical manufacturing sector, driving both innovation and disruption across the contract development and manufacturing organization (CDMO) landscape. And while Charles River Laboratories recognizes the headwinds, the company remains confident in its ability to adapt and evolve alongside the industry.

“One of the things that is clear in the advanced therapy space is that we’re still innovating quite quickly, and we have lots of terms for this — the most common one is we’re building the plane as we’re flying it,” says Matt Hewitt, vice president and chief technical officer of the manufacturing business division at Charles River.

According to William Blair analyst Max Smock, despite headwinds in its cell and gene therapy business — including the loss of a commercial contract and slower-than-expected volume ramp for another program — Charles River remains positive about its overall CDMO performance.

“If you go back and look at their commentary during quarter two, they actually sounded pretty positive about the core CDMO business outside of those factors,” says Smock, adding the company has emphasized maintaining stability and improving the core business outside of its commercial contracts.

In a third-quarter 2025 earnings preview last week, Smock told investors on a webinar that when it comes to Charles River, his firm has been “very skeptical about the cell and gene therapy CDMO space really for a couple of years now.” At the same time, he noted Charles River’s statements around this business — outside of the lost commercial contracts — have been more bullish than expected over the last two quarters. “For me, it’s more about getting past this year,” Smock said.       

Navigating pipeline rationalization

Challenges that Charles River has been focused on addressing include pipeline rationalization across therapeutic modalities in the cell and gene therapy market, as biopharma companies narrow their portfolios to focus on the most viable programs.

“We, like other CDMOs, continue to monitor the situation related to pipeline rationalization and work with our partners and clients to ensure we are bringing them the most value for the programs they advance to clinical and commercial stages,” Hewitt says.

According to Smock, pipeline rationalization occurring in cell and gene therapy can be attributed to product failure in preclinical trials as well as the consolidation of spending on the most promising assets. Though he notes that this market is working through a bubble with some promising green shoots, including a one-time gene therapy that was recently found to be able to successfully treat Huntington’s disease.

“I think this maybe brings some enthusiasm back to that cell and gene therapy space,” Smock says. “So, it feels like we’re working through a bit of a bubble or maybe coming out potentially the other side of that bubble.”

Addressing the challenge of scale

On top of pipeline rationalization, scaling manufacturing capacity remains a critical issue in advanced therapy markets, according to Hewitt. He points to chimeric antigen receptor (CAR)-T and other cell therapies in oncology as examples: where demand is strong, but only 20% to 30% of eligible U.S. patients currently receive treatment.

“While it’s hard to determine a single factor limiting the number of patients receiving these therapies, certainly manufacturing at scale is one challenge,” Hewitt says. “Ideally, companies would take an all-of-the-above approach here with scaling manufacturing. This would be part of their manufacturing capacity which would be internally built and maintained to ensure they can control some of their commercial supply but at the same time have outsourced capacity which could be more quickly ramped up and ramped down with demand. This hybrid approach may help balance the need to adequately supply the market without large amounts of infrastructure investment.”

Investing in platforms, emerging technologies

Charles River remains focused on prioritizing efficiency, yield, and consistency in viral vector manufacturing, by developing solutions that speed development and manufacturing while reducing timelines.

For example, the CDMO’s nAAVigation and Lentivation platforms — for adeno-associated virus (AAV) and lentiviral vector modalities, respectively — are designed to accelerate development timelines while reducing cost and risk, Hewitt says. Key to these platforms is striking a balance of standardizing where possible while not inhibiting innovation, he added.

Manufacturing bottlenecks are a predominant roadblock in the cell and gene therapy space, says Smock, that — despite impactful moves being made in this space — will still be a general hurdle in the industry.

“There are still bottlenecks that need to be addressed before cell and gene therapy really takes off,” according to Smock, who noted that Charles River can play a role in advancements in this space, even if the overall industry is slow to adapt to process improvements. “I’m sure they’ll adapt. They’ll help drive some of those changes to the extent possible, but it’s hard to get around the fact that these are just incredibly complex therapies to make.”

Expanding modalities and maintaining agility

Hewitt highlights nucleic acids and lipid nanoparticles (LNPs) as emerging therapeutic modalities where Charles River is expanding expertise alongside its established viral vector work.

“Many teams within [Charles River] do a lot of work in these areas and we have partners who synthesize and manufacture therapies in this space,” he says, noting that LNPs provide an alternative to viral vectors for delivering therapeutic payloads.

Though, Hewitt adds, there is also a lot of activity in this market that is related to viral vectors as well. “We continue to believe nucleic acid and LNP therapies, like others, do not represent a zero-sum solution meaning we believe there will be indications where nucleic acids and/or LNPs work well but they won’t be solutions for everything,” he said.

Being technology-agnostic, according to Hewitt, is essential.

“I think that the thing that we see developing in this space is that there’s going to be numerous options that need to be made available to meet the needs of patients,” he says. “And so, our task is to be familiar with all of those and then ensure that whichever programs we work with has the best equipment that’s fit for purpose, for their technology, for their program.”

While new modalities are exciting, Hewitt emphasizes that established treatments — such as ex vivo cell therapies — remain vital to the therapeutic landscape.

Tariffs, trade policy, supply chain stability

Beyond scientific and clinical challenges, global market dynamics such as tariffs and reshoring trends are also shaping the CDMO environment. A report earlier this month from William Blair suggested Charles River was positioned to outperform given the easing of certain “overhangs” on its business around pharmaceutical tariffs and drug pricing reform.

According to Smock, industry uncertainty that resulted from these overhangs has subsided. Recent updates to U.S. trade and “most-favored-nation” drug pricing policies turned out more favorable than many had feared, he says. The planned 100% pharmaceutical tariffs that were slated to take effect on Oct. 1 have not been implemented, and companies investing in U.S. manufacturing appear largely exempt. Similarly, the latest drug pricing measures are expected to have only marginal effects on the bottom lines of large pharma companies.

“There’s been a lot of noise on those two factors, and now that we’ve kind of gotten some clarity, I think both updates turned out to be much better than feared,” Smock says. “I think you’ll start to see large pharma accelerate investments into 2026 and hopefully in the longer term.”

Hewitt noted that Charles River hasn’t seen any direct impact on the company due to the tariff threats.

“This is primarily because much of advanced therapy manufacturing is regional,” he explains. “We don’t see a lot of work moving into areas affected by geopolitical tensions or tariffs.”

The emphasis, he notes, is on stability: ensuring clients can count on uninterrupted support even as trade policies and geopolitical dynamics shift.

“Charles River continues to monitor all situations which may lead to supply disruptions, but we feel well positioned to serve not only our regional markets — the U.S., U.K., and EU — but also clients in APAC,” he says. “We have a long history of working with, as well as shipping to, a variety of geographies.”