MassBio Year-End Report Lauds VC Funding Increase

In a sign of a biotech rebound, Massachusetts-headquartered biopharma companies received $7.89 billion in venture capital (VC) funding, marking the first year-over-year increase since the pandemic, according to a newly released year-end report from biopharma member organization MassBio. For the first time ever, the report also found that private biopharma companies based in Boston collected more venture dollars than those headquartered in Cambridge, indicating a shift in the center of gravity for mid- to late-stage firms.

According to MassBio CEO and President Kendalle Burlin O’Connell, “We saw venture firms invest in startups with promising data and pharma companies acquire and partner with companies with advanced pipelines. We also witnessed the maturation of a cluster, with Boston staking its claim as the place growing companies go to advance through the clinic, while Cambridge remained the destination of choice for early-stage startups and global pharmaceutical companies.”

Venture Capital

Massachusetts-based companies received $7.89 billion in VC funding in 2024, an increase of $220 million over 2023. This funding accounted for 28.3% of national VC dollars, second only to California (41.6%) but well above New York (6.6%).

Seventy-two percent of venture funding went to companies headquartered outside of Cambridge, the largest portion ever. While Cambridge (73) had more deals than Boston (62), the capital city became the champion in the venture sweepstakes with $2.3 billion in funding compared to $2.2 billion for Cambridge. Watertown, Waltham, and Burlington rounded out the top destinations for investors to find companies to support. Cambridge remains the top destination for early-stage startups and global pharmaceutical companies while growing mid-stage private companies are gravitating to Boston’s Seaport and the suburbs.

Mergers and Acquisitions

The year started with an explosive quarter for merger and acquisition activity with nearly half of the year’s deals to acquire Massachusetts-based companies (15 of 32) closing between January and March. Though the number of deals was down six from 2023, the total value surged to $42.6 billion from just $13 billion in 2023. Bristol Myers Squibb’s acquisition of Boston-based Karuna Therapeutics for $13.8 billion was the top deal of the year and promptly paid off with the FDA’s approval of schizophrenia drug Cobenfy just six months later. Massachusetts-headquartered companies acquired 25 companies in 2024, with the sale of Alpine Immune Sciences (Seattle, WA) to Vertex Pharmaceuticals topping the list at $4.9 billion.

Initial Public Offerings

Six companies tested the market by holding an IPO in 2024, easily surpassing the two in 2023. Bicara Therapeutics (Boston), Zena Therapeutics (Waltham), and Upstream Bio (Waltham) raised the most from their IPOs. At market close on December 31, 2024, the stock values for five of the six companies were trading below their initial price, with only Rapport Therapeutics showing modest gains.

Drug Pipelines

Globally, Massachusetts continues to be a strong player in drug development, with 6.4% of the worldwide drug pipeline. Nationally, the Commonwealth stands firmly in second place with 15.1% of the pipeline, a slight increase from last year’s report (14.9%). It is important to note that these pipeline numbers only represent companies based in Massachusetts, excluding those with substantial R&D operations here and headquarters elsewhere. There are 762 active clinical trials underway in Massachusetts. In 2024, 23 companies either based in or with a significant presence in Massachusetts received FDA approvals, including groundbreaking treatments for RSV, Schizophrenia, leukemia, and advanced squamous cell carcinoma. (Source: MassBio Website, 07 January, 2025)