Boston's life sciences industry looks to rebound in 2025
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Greater Boston's life sciences leaders will find out in 2025 if their industry can overcome its post-pandemic slump — and how the incoming Trump administration will affect them.
Why it matters: Biopharma contributes billions of dollars to the state's economy, per a report from the trade organization MassBio.
- The latest economic development package Gov. Healey signed into law, which includes a $500 million investment in the life sciences industry, signals Massachusetts' commitment to the sector's growth here.
The big picture: Venture capital investment dropped in late 2022 and 2023 after years of record funding, but rebounded last year.
Zoom in: Massachusetts biopharma companies got a combined $7.8 billion in VC funding last year — the first year-over-year increase since the pandemic, per MassBio's 2024 biopharma funding report.
- Massachusetts-based companies also saw an increase in IPOs in 2024 compared to a year earlier.
State of play: The biotech industry may see more money flowing this year and perhaps more funding outside of Cambridge.
- In 2024, Boston unseated Cambridge as the city with the highest biopharma VC funding raised, per MassBio.
- Waltham, Watertown and other cities saw increases in funding for their local biotech companies, a sign the industry continues to branch out.
Yes, but: President-elect Trump's nomination of Robert F. Kennedy Jr. raised concerns that the vaccine skeptic could make it even harder to get drug candidates approved, especially vaccines.
- A health and human services overhaul could hit vaccine-focused companies and early-stage investments for vaccine startups particularly hard, per Axios Pro Rata.
The Trump administration's vows to impose broad-based tariffs could also shake up the entire industry, raising concerns about drug pricing increases and supply chain disruptions in the U.S.
- Massachusetts bio-manufacturing companies have emerged since the pandemic, but it's unclear how they would respond to tariff disruptions.
- Several companies and organizations Axios contacted declined to comment on how they're preparing for the possibility of tariffs affecting pharmaceuticals.
Friction point: Massachusetts companies still struggle to fill openings for entry-level jobs and executive roles.
- AI-based solutions could streamline some of the work and improve research, diagnostics and other areas, but it's too soon to tell if Pharma will incorporate AI into its workflow the way the health care sector has.
What we're watching: Cambridge-based vaccine maker Moderna is struggling to build on its success from the COVID-19 pandemic.
- The company now plans to cut $1.1 billion from its annual research and development budget and says it will aim to break even by 2028 (its prior target was 2026).