Tuesday, May 29 2018
By Alex Philippidis
GEN’s Annual Ranking Counts Down the Nation’s Most Nurturing Regions
Despite consolidation of capital and talent in the nation’s two largest biopharma clusters, all 10 regions ranked by GEN have significant assets that make them attractive to biopharma researchers, executives, and investors. [Wsvan/Wikimedia]
Bruce Booth, D.Phil., a partner at Atlas Venture, astutely observed earlier this year that two key resources fueling the growth of biopharma were, until recently, somewhat geographically spread among the ten or so regions of the nation where the industry began to arise a generation ago.
“In recent years, this has changed—Boston and San Francisco are now the preeminent biotech clusters. And their gravity in the ecosystem is only getting stronger,” Dr. Booth concluded in a March 21 post on his Life Sci VC blog. “Beyond having great science and the right ‘pixie dust’ in the local environment, two fundamentally important ingredients to the success of any cluster are capital and talent—and both are aggregating into the two key clusters.”
So it’s no surprise that Boston/Cambridge, MA, and the San Francisco Bay Area again top this year’s GEN List of the nation’s top 10 biopharma clusters, as they did last year and in 2015. Yet that’s not to say the other eight clusters rounding out the list are the proverbial chopped liver; they too have significant assets that make them attractive to biopharma researchers, executives, and investors, often drawing upon heritages that include the presence of big pharmas or home-grown biotech giants.
And while the regions making the list this year will be very familiar to biopharma industry watchers, the regions just below the top ten also continue to build clusters that may someday propel them to future GEN lists. Highest among those remains Denver at No. 11, which ranked higher on two criteria—ninth in lab space (four million square feet) and tenth in jobs (27,666, according to JLL).
GEN ranks regions based on five criteria:
Improving the region’s biopharma ecosystem will be among the priorities of James E. Audia, CSO of Constellation Pharmaceuticals, who on May 25 was named the new executive director of the Chicago Biomedical Consortium, effective August 1. The consortium was formed to stoke collaboration among researchers at Northwestern University, The University of Chicago, the University of Illinois at Chicago, and other institutions.
In March, Rosalind Franklin University of Medicine and Science said it will build a $50 million Innovation and Research Park with labs and an incubator for biopharma startups, and space for larger global life sciences companies. Ground for the 100,000-square-foot addition to the campus’ north side is set to be broken in September, with the project completed by summer 2019.
#9. Los Angeles / Orange County
Basic research is among strengths of the region, which ranks seventh in patents (1,479), and ninth in NIH funding (806 awards totaling $337.4 million). Those numbers can be expected to grow, as startup accelerator Make in LA joined LabLaunch last year to create a new bioscience-focused lab at Make in LA’s Chatsworth, CA, campus, with plans to create the first early-stage biotechnology incubator in the City of Los Angeles. Where the region shines is in number of jobs, where it ranks second with 120,688, according to JLL—though regional life science industry group Biocom counts 117,879, consisting of 69,830 in Los Angeles County and 48,049 in Orange County.
#8. Raleigh-Durham, NC (includes Research Triangle Park, NC)
The region also ranks eighth in NIH funding (749 awards totaling $349 million) and tenth in patents (928)—but fared a little better in jobs, ranking ninth with 35,073 according to JLL, though the North Carolina Biotechnology Center counted 62,937 jobs statewide in 2016. The Center faces either a budget freeze at $13.6 million each year during 2017–19, or a five percent cut, in the approximately $23 billion biennial spending plan under discussion by state lawmakers at deadline.
The region ranked fifth in VC (eight deals totaling $169 million in 2016), dipping in Q1 (two deals totaling $31 million) to sixth, same as its ranking for NIH funding (621 awards totaling $374.4 million) and patents (1,887). However, the Seattle area has already more than doubled its VC dollars this quarter, as Genoa Pharmaceuticals closed on a $62 million Series A financing in May. The region fares worse, however, in lab space (eighth with 4.6 million square feet) and especially jobs (11th with 24,320, according to JLL). A report released in February by Washington state’s Life Science & Global Health Advisory Council showed the life sciences industry has lost three percent of its jobs since 2011.
#6. Greater Philadelphia
Yet during this year’s Philly Tech Week, according to Technically Philly, Barbara Schilberg, CEO of VC firm Bioadvance, said investors remain concerned about getting startups past their seed stage: “The thing to watch is if they can get to a Series A.” VC funding is among challenges for the region, which ranked eighth both last year (11 deals totaling $125 million) and in Q1 (two deals totaling $29 million). The region also ranked eighth in patents (1,365), but fared better in lab space (seventh with nearly 6.4 million square feet), employment (sixth with 53,614 jobs, according to JLL) and notably NIH funding (fifth with 671 awards totaling $389 million).
#5. Maryland / Virginia / DC Metro
Vaccine developers continue to grow. In May, Gaithersburg-based Emergent BioSciences opened an $80 million expanded medical countermeasures plant in East Baltimore, while GlaxoSmithKline announced a $139 million capacity expansion at its API plant in Rockville, MD, due to growing demand for its lupus erythematosus treatment Benlysta® (belimumab). The region finished sixth in VC funding last year ($146 million), but climbed to fourth during Q1 (seven awards totaling $71 million). Courting the industry eagerly are both Virginia Governor Terry McAuliffe (D) and Maryland Governor Larry Hogan (R), a non-Hodgkin's lymphoma survivor who calls the cluster-building effort a personal mission.
#4. San Diego
Illumina’s roughly 3,000 employees help made the region fifth in jobs (63,730 according to JLL, compared with 49,763 counted by Biocom). The region ranks fourth in lab space (11.9 million square feet plus 1.1 million square feet under construction) and third in patents (4,383), but seventh in NIH funding (741 awards totaling $352.9 million).
#3. New York-New Jersey
New Jersey accounts for nearly 61 percent of the region’s jobs, helping catapult the Empire State–Garden State tandem to number-one in jobs (127,308, according to JLL). Among growing companies is Tarrytown, NY-based Regeneron Pharmaceuticals, which in January said it will purchase its headquarters site for $720 million—a month after shelling out $50 million for an office property in nearby Sleepy Hollow, NY. Despite being home to Wall Street and the financial industry, the region ranks only seventh in VC funding (11 deals totaling $132 million in 2016; two deals totaling $29 million in Q1). NY–NJ fares better in patents (fifth with 3,208), and especially in lab space (12.7 million square feet) and NIH funding (third with 1,835 awards totaling about $787.3 million).
#2. San Francisco Bay Area
In VC funding, the Bay Area finished 2016 second with $2.2 billion in 80 deals, and narrowly edged Boston/Cambridge in Q1 2017 with $1.435 billion in 20 deals. The region finished third in NIH funding (1,283 awards totaling about $520.6 million), and fourth in jobs with 67,738 according to JLL, though the California Life Sciences Association offers a slightly higher count of 68,313 as of 2015. That number can be expected to grow in coming months, with Juno Therapeutics in April confirming plans for a Bay Area office, saying it “puts us in the best position to continue to hire world-class talent.” Not all the region’s job news has been good; OncoMed halved its workforce in April.
#1. Boston / Cambridge, MA
Not surprisingly, the region leads the nation in NIH funding (2,169 awards totaling nearly $1.055 billion), lab space (19.9 million square feet), and 2016 VC funding (78 deals totaling $3.06 billion), though Boston/Cambridge finished second to the San Francisco Bay Area in Q1 with 19 deals totaling $534 million. Biopharma growth is fueling a wave of speculative lab space development in and around Boston and Cambridge; King Street Properties, for example, is building the $200 million, 145,000-square-foot 828 Winter Street adjacent to an existing lab building owned by the developer, and slated for completion in 2018. The region is also second in patents (6,496), but third in jobs with 86,235 according to JLL, though industry group Massachusetts Biotechnology Council (MassBio) reported 63,026 last year.