Sail Biomedicine’s $925 million deal with Johnson & Johnson helped boost the cell and gene therapy sector over biologics in terms of venture capital fundraising in the <a href="https://bitcomme.com/qt-imaging-to-report-third-quarter-2026-financial-results-and-host-conference-call-on-november-10-2026/” title=”QT Imaging to Report Third Quarter 2026 Financial Results and Host Conference Call on November 10, 2026″>third quarter.
The cell therapy space has been rocked by recent reports of deaths in clinical trials being run by Novartis and Bristol Myers Squibb. And yet, cell and gene therapy brought home the second most venture capital dollars in the third quarter, outpacing biologics
Cell and gene therapy took in $2.2 billion in venture capital in the third period across 51 deals, falling behind small molecules at $3.2 billion but ahead of biologics, which amassed $1.5 billion.
This is only the second time since 2022 that cell and gene therapy (CGT) has beaten biologics in terms of fundraising, PitchBook said, and results from both are a jump in CGT funding and a significant drop in biologics over second quarter totals.
The achievement comes as the cell therapy sector has been rocked by reports of multiple deaths in autoimmune trials at some of the biggest pharmas in the space, PitchBook pointed out. In late August, news broke that Novartis had paused a handful of clinical trials for the CAR T rapcabtagene autoleucel after three deaths. Then last month, Bristol Myers Squibb reported a death in a multiple sclerosis trial for its CAR T zolacabtagene autoleucel (zola-cel), after having previously paused certain zola-cel trials to investigate some safety signals. The deaths occurred months prior to the news breaking but were confirmed by the pharmas more recently.
Meanwhile, CAR T biotech Caribou Biosciences announced the suspension of R&D activities amid what CEO Rachel Haurwitz called a challenging fundraising environment for allogeneic cell therapy. The biotech was co-founded by Nobel Prize-winning CRISPR pioneer Jennifer Doudna but ran into myriad troubles as the cell therapy space shifted from cancer to autoimmune thanks to groundbreaking research in lupus that came out in 2023.
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These events would lead an observer to think that cell therapy—particularly for less lethal conditions like autoimmune—was on the outs. But PitchBook’s analysis shows a more hopeful look at the space, as does Kyverna Therapeutics’ advancement toward an FDA application for the CAR T mivocabtagene autoleucel (miv-cel) in stiff person syndrome.
Leading the Q3 fundraising was Sail Biomedicines, which secured a massive deal with Johnson & Johnson worth up to $925 million initially, including an equity purchase. PitchBook flagged the fundraising event as venture capital given the involvement of J&J’s JJDC venture arm. Upfront payments totaled $785 million, including a $465 million equity investment. An additional $140 million in development-based milestones were offered on the back end. But the healthcare giant also secured an exclusive option to purchase Sail later on for $2.58 billion.
The deal, which closed in August, gave the biotech a valuation of $2.8 billion Unlike Caribou’s allogenic CAR T approach, Sail is advancing in vivo CAR T therapies for immune-mediated conditions. J&J expects assets from that collaboration to hit the clinic this year, according to a company presentation at the Morgan Stanley 24th Annual Global Healthcare Conference in September
That J&J would make such a play for a cell therapy company is not a surprise. The Big Pharma is one of the leaders in the space with Legend Biotech–partnered blood cancer therapy Cavykti.
PitchBook also highlighted seed rounds from K2 Therapeutics for $50 million and Cirrus Therapeutics’ $14.7 million as key cell and gene therapy investments in the quarter.
Pediatric-focused cell therapy company BrainChild Bio had the second highest series A in the period with $116 million, behind Solstice Oncology’s $225 million. Link Cell Therapies raised $90 million in the quarter.
Cell therapy has continued to make news in the fourth quarter as well, with former J&J executive Paul Stoffels rescuing a clutch of assets from his former biotech Galapagos to form Armed Cell Therapeutics. The biotech broke cover in mid-October after striking a deal with Lakefront Biotherapeutics—formerly Galapagos—to take over the assets for just under $240 million in biobucks.
Venture capitalCell therapyGene therapyCAR-TFunding
