Aug 30, 2022 - News

Biotech funding expanding into Mass. suburbs

An aerial view of the Boston and Cambridge skylines

The Cambridge and Boston skyline. Photo: Christopher Evans/MediaNews Group/Boston Herald via Getty Images

Cambridge and Boston continue to outpace other Massachusetts cities and towns when it comes to venture capital funding for biopharmaceutical companies, a new report says.

  • Yes, but: Investors are also betting on startups in Waltham, Watertown and other small cities, per the report, confirming state officials and business leaders’ comments that the biotech industry is expanding beyond Cambridge.

Driving the news: Cambridge biotech companies raised $2.2 billion — or 43% of biotech funding in Massachusetts — in the first half of 2022, according to MassBio’s industry snapshot released today.

  • Just over the river, Boston biotech companies raised $1.5 billion, nearly 30% of funding in the state, in that same time frame.
  • The other nearly $1.4 billion, or 27%, in investments funded biotech companies in other cities and towns, but among them Waltham stood out as an emerging biotech hub with $561 million in VC funding (about 11% of funding).
Massachusetts venture capital life sciences investment, by&nbspmunicipality
Data: Pitchbook; Chart: Erin Davis/Axios Visuals

Yes, but: Just how much biopharmaceutical companies have expanded beyond Cambridge and Boston remains unclear; MassBio’s industry snapshot did not break down VC funding by municipality in previous years.

Why it matters: Biotech has transformed from an industry of roughly 46,000 workers in 2006 to one boasting more than 106,000 workers so far this year, per MassBio.

  • These workers have helped develop cancer-treating drugs, COVID-19 vaccines and other life-saving treatments.
  • The funding kept coming for Massachusetts biotechs this year, despite lower stock valuations, layoffs, inflation and other challenges affecting the life sciences industry.

Zoom out: Greater Boston remains one of the biggest biotech hubs in the country, behind the Bay Area.

  • About one-quarter of all VC funding for pharmaceuticals in the U.S. went to Massachusetts-based companies in the first half of the year, per MassBio.

What they’re saying: "The fact that good science will continue to be invested in and is being invested in here in Massachusetts is a great sign for the industry here,” said Ben Bradford, MassBio’s vice president of economic development and workforce, in an interview with Axios.

Details: Some newer, smaller biopharmaceutical companies are moving into the suburbs, such as Upstream Bio in Waltham and Affini-T Therapeutics in Watertown.

  • But it’s not just new biotech startups, either. Cambridge-based Moderna also has a biomanufacturing facility in Norwood, a town south of Boston, while its rival Pfizer has a 70-acre campus for research and manufacturing in Andover, roughly 20 minutes south of the New Hampshire border.

Between the lines: Cambridge and Boston are home to renowned institutions, from Harvard University and MIT to Brigham and Women’s Hospital, but the report notes the suburbs have something they don’t: cheaper real estate.

  • Cambridge lab rents average $118 per square foot, while Boston lab rents average $108 per square foot.
  • Middlesex County prices outside of Cambridge averages $94-$97 per square foot.
  • And rent is far lower elsewhere, averaging $31-$45 per square foot in Worcester County, $35-$60.50 per square foot in Essex County and $49-$52 per square foot in Norfolk County.

The bottom line: Cambridge remains the state’s biotech capital, just over the river from the actual state capital, but expect the state’s life sciences industry to keep growing out into the suburbs.


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