The biotechnology sector has hit a rough patch. Buoyed by its pivotal role in developing COVID-19 vaccines, the industry enjoyed a global revival in 2021. By early 2022, however, biotech stocks were careening downward.
Boston has bucked that trend.
Biotech here in America’s 23rd largest city is surging, raging even, to the tune of $5 billion in venture capital investment thus far in 2022. In fact, Boston area startups received more than a quarter of all VC biotech funding in the nation.
Boston's biotech magic, however, is anything but. It is a payoff decades in the making.
Long-term partnerships between government, academia and private enterprise have built a foundation that includes funding opportunities, startup incubators, real estate opportunities, exclusive networking, and affordable employee benefit programs to plug into. A researcher in Massachusetts can take a successful drug to market without ever leaving the state.
Policy analysis site FiveThirtyEight summed it up like this:
Silicon Valley, Seattle, Austin and New York often come to mind when you think of the nation’s tech capitals, but the Greater Boston area steadily has built a tech hub that rivals all these cities.
“The Bay Area is probably the cradle of biotech in the U.S., but it’s lost its mantle to Boston,” says Dr. RJ Tesi, who moved from the San Francisco Bay Area to Boston in 2015 and is the CEO and CMO of INmune Bios.
Midway through 2022, more than 100,000 people are employed in the Greater Boston biotech cluster known as “Genetown”, with an average salary of $201,549. About two-thirds of those jobs have been created in the last decade. A 5-year plan by the nonprofit Massachusetts Biotechnology Council, or MassBio, aims much higher. While Boston is currently home to the third largest biotech hub in the nation, MassBio wants the city – and the state as a whole – to be the global biotech capital. MassBio laid out its recent accomplishments in the 2022 Industry Snapshot:
“The strength and resilience of the Massachusetts life sciences industry is on full display in this Industry Snapshot, as significant funding continues to push good science forward, and investments made over the last few years have positioned the state to weather strong headwinds,” said Kendalle Burlin O’Connell, President and COO of MassBio.
MassBio is not new. The nonprofit support network has been chugging along since the 80s, growing steadily before exploding into mainstream relevance during the biotech revolution of the late 1990s and early 2000s. The goal of this evolving partnership between private enterprise, government and academia has remained steady ever since – to make the Greater Boston area a life sciences giant, a full-on biotech ecosystem replete with research, innovation, development and manufacturing.
Also key is the Massachusetts Life Sciences Centre, a quasi-public agency tasked with implementing the $1 billion-and-growing Massachusetts Life Sciences Act voted into law in 2008. The centre’s work includes making financial investments in public and private institutions advancing life sciences research.
Massachusetts, of course, has the advantage of proximity to science and tech powerhouses such as MIT and Harvard. Researchers at the top of their fields are developing novel gene-editing and cell-based therapies, winning prizes, and forming companies to bring their discoveries to market. They are the new biotech glitterati.
According to the snapshot report released by MassBio, several Boston-area startups received triple-digit funding in the first half of 2022. Tessara Therapeutics raised $300 million in its third round of financing, and Upstream Bio raised $200,000 in its first. More than 120 Massachusetts biotech startups raised $41.1 million in 2022, which is about $11 million more than the national average.
Startups such as Photys Therapeutics are becoming Boston's norm: funded by Big Pharma, founded by decorated researchers.
Photys founder Amit Choudhary is a pioneer in developing precision control tools for genome editing. An assistant professor at Harvard Medical School and a member of the Broad Institute of MIT and Harvard, Choudry’s honours are too numerous to list here. They include the Juvenile Diabetes Research Foundation’s Innovation Award and the NIH Director's Transformative Research Award.
Cambridge-based Photys formally launched in September 2022 with $75 million in first-round financing from VCs and pharma giants, including Merck and Eli Lilly. The company is developing a new class of drugs that can chemically modify proteins to change their function. They show promise for hard-to-treat cancers, as well as immune and metabolic diseases.
Biotech in the Boston area hub is not, however, dependent on startups. The heartiness of the cluster lies in its mix of old and new.
Vertex Pharmaceuticals is Boston’s current crown jewel. The 33-year-old company saw a 65% increase in market valuation between October 2021 and October 2022. Currently perched at $75 billion, Vertex has soared ahead of companies like Moderna and Biogen, Boston’s longtime biotech darlings.
The key to Vertex’s success is its solid results and simple formula. Investors have flocked to the company as market volatility and inflation make other biotech companies feel like a bigger gamble.
Vertex has built an empire around a single drug for cystic fibrosis called Trifacta. The pill is currently the gold standard in non-invasive treatment for patients with the often-deadly respiratory disease. At more than $300,000 per patient per year, the drug is exceedingly expensive, but its unprecedented success has doctors prescribing and insurance companies paying.
Vertex made more than $7.5 billion in sales in 2021 and is cruising toward $8.8 billion in 2022. The Boston Globe noted the enormity of Vertex’s accomplishment and its role in raising the region's biotech bar:
A recent survey of Fortune 500 companies underscores just how profitable Vertex’s drugs are. The firm reaped about $798,000 per employee in 2020, making it the most profitable company by that measure in the drug industry and the sixth most profitable overall — beating out tech and finance giants Alphabet, Apple, Meta, Microsoft, and Visa.
MassBio’s ambitions go beyond developing novel pharmaceuticals and treatments. Biomanufacturing plays a big role in the nonprofit’s quest to make Boston a self-sufficient biotech ecosystem. MassBio’s leadership laid down the hard truths about the cluster’s over-dependence on grants and VC dollars in its State of the Possible 2025 plan:
The (research and development) engine of the state is highly dependent on external sources of funding, including the federal government, through the NIH, for its success. Potential changes in the allocation of such funding create a risk for the sustainability of Massachusetts, which is highly focused on academic innovation and venture-backed commercialization of innovation. The state can become more resilient and sustainable by fostering favorable conditions for the development of biomanufacturing and commercialization capabilities.
There is manufacturing momentum in the Greater Boston area.
Real estate firm Berkeley Investments plans to break ground in 2023 on a 203,000-square-foot biomanufacturing facility. The project goes beyond pure manufacturing value to match MassBio’s employment ideal: positions for a variety of professionals, academics, and specialists. The 325 new jobs at the facility will range from scientific positions for PhDs to lab technician positions that require associate degrees.
Still, manufacturing remains the weakest link in the Boston biotech hub.
The Boston Globe took a closer look:
Massachusetts trails states ― including Florida, Texas, Pennsylvania, North Carolina, and California ― for total biomanufacturing jobs statewide, but the number of jobs in the industry is growing. The state reported just under 10,000 biomanufacturing workers in 2021 — up 15.2 percent from 2020. California, by comparison, had more than 50,000 biomanufacturing workers last year, according to a recent report from industry group MassBio.
According to MassBio, there are 1.7 million square feet of manufacturing space under construction across Cambridge and Boston. King Street Properties is developing a five-building, $500 million biomanufacturing campus, and drugmaker Bristol Myers Squibb also developing a cell therapy plant.
There’s no disputing this point: Boston is on the rise in one of biotech’s most difficult seasons. It’s not the only city with top-notch universities and brilliant researchers. Industry groups from across the globe visit Boston to pinpoint the magic brew. Boston tech leaders say there’s none to be found, just a whole lot of planning and sweat equity.
Shobha Parthasarathi, a vice president at Xontogeny, a Boston biotech accelerator for new companies, had this to say at a round table with Swissex, a research network connecting Switzerland with the world's innovation hubs:
“What began with a few solid foundational elements already in place quickly enabled the growth of the hub it has become today,“ Parthasarathi notes. Without those solid foundational elements, the Boston/Cambridge biotech industry would not have flourished to nearly the same level.”
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Tamara Kerrill Field is Kaiju's Managing Editor. Her writing and commentary on the intersection of race, politics and socioeconomics has been featured in USNews & World Report, the Chicago Tribune, NPR, PBS NewsHour, and other outlets. She lives in Portland, ME.