MassBio “Industry Snapshot” Reports on Jobs, Investment, Development Pipeline

Massachusetts added almost 3,000 net new jobs in the biopharma industry in 2023, accounting for nearly 17% of overall job growth in the state. Meanwhile, the research and development workforce grew by 3.7%, even as the national R&D workforce decreased by 0.5%. This is according to the annual MassBio Industry Snapshot which tracks the state’s life sciences industry’s growth, including employment, industry investment, drug development pipeline, real estate, and regionalization metrics.

The report also found $3.26 billion of venture capital funding went to Massachusetts-based companies in the first half of this year, with more than two-thirds of those funds going to companies based outside the biotech hub of Cambridge – in communities like Boston, Waltham, Watertown, and Framingham.

While the rate of biopharma job growth slowed compared to recent years, the Commonwealth did expand as competing states such as California and New Jersey contracted. The state experienced a loss of 2% of the biomanufacturing workforce but at a far slower pace than national trends. Notably, Worcester County bucked the trends with an 11.8% increase in biomanufacturing jobs. The report highlights continued opportunities to expand the state’s biomanufacturing presence, citing growing leadership in advanced modalities, a friendly state policy landscape, and potential federal government resources.

Venture capital (VC) continues to fuel the ecosystem even as biotechs face a less favorable VC funding landscape. In Q1 and Q2 of 2024, ninety-five Massachusetts-based companies announced a total of $3.26 billion in VC funding, constituting 21% of national VC dollars. Partial returns for Q3 show increasingly robust VC investment of $1.43 billion through August 19. The total amount of VC funding in the first half of 2024 was outpaced nationally by only California. Of the state’s VC funding, an unprecedented 65% was invested in companies located outside of Cambridge, speaking to the promising growth and potential of clusters in Waltham, Watertown, Framingham, and others.

In merger and acquisition (M&A) activity, $28.9 billion was spent acquiring 17 Massachusetts companies in the first half of 2024 – nearly triple the dollar amount of last year. Large pharmaceutical companies are using M&A to gain access to the drug pipelines of companies headquartered in Massachusetts while giving local biotechs and investors exits during an ongoing cool market for IPOs.

Massachusetts’ drug development pipeline comprises 15.2% of the nation’s pipeline and 6.4% of the global pipeline, up from 14.9% and down from 6.5% respectively. It is important to note that these pipeline numbers only represent companies based in Massachusetts; they do not reflect the multinational pharmaceutical companies with significant R&D operations in Massachusetts but are headquartered in other states or countries. Oncology (35%) leads in the therapeutic areas of the Massachusetts drug development pipeline, with CNS (15%) and anti-infective (9%) rounding out the top three focus areas. (Source: MassBio Website, 27 August, 2024)