Massachusetts’ top-tier biopharma cluster is weathering the storm wreaked by COVID-19 after a year in which it continued to attract jobs, especially R&D jobs, and venture capital (VC) investments—helping to keep the Bay State on top in two key measures of growth, according to a report issued this week by the statewide life sciences industry group.
The Bay State’s biopharma workforce grew 7.7% last year to a total 79,972 jobs, up from 74,256 in 2018, the Massachusetts Biotechnology Council (MassBio) reported in its 2020 Industry Snapshot, produced in partnership with Evaluate.
The 2019 total represents a 46% increase in Massachusetts biopharma jobs from the 54,829 reported in 2009, MassBio said.
“The science is here. The venture capital community is here. The workforce is here,” Elizabeth Steele, MassBio’s vice president of programs & global affairs, told GEN. “You can’t go to any state in the country and expect to hire over 5,000 people year over year. I mean, that is a pretty remarkable statistic and the fact that our universities and colleges are putting out the graduates that we need to sustain this growth.”
She said the life sciences industry job growth appears to have continued even as COVID-19 has upended the economies of Massachusetts and other U.S. states. Those jobs fall into any of three categories tracked by the state Executive Office of Labor and Workforce Development (LWD):
- Professional, scientific, and business services, including scientific R&D, which grew by 7,600 (+1.4%) statewide in June—but lost 33,000 jobs (-5.5%) year-over-year.
- Education and health services, including academic and hospital-based jobs, gained 5,900 (+0.8%) jobs in June, while losing 83,300 (-10.3%) jobs in the year since June 2019.
- Manufacturing, including pharmaceutical and medicine manufacturing, added 5,500 (+2.4%) jobs in June, but shrunk by 13,200 (-5.4%) jobs year-over-year.
“From what we have seen, very few companies if any have had to cut jobs. A lot of our industry is in a great place,” Steele said. “NIH funding is still happening. Venture capital funding is still happening. And unmet medical needs outside of COVID-19 haven’t gone away. So, there is still the need for our industry. There’s now just a larger need for our industry. So we are more able to say that the industry that our industry has been affected by COVID-19 less than other industries.”
MassBio has tallied more than 85 companies based in the state that are working on new drugs, vaccines, and diagnostics aimed at the virus.
Across all sectors, LWD has reported that Massachusetts lost a total 529,800 jobs in the 12 months ending in June—though the U.S. Bureau of Labor Statistics’ preliminary job estimates indicate that the state added 83,700 jobs that month.
R&D job surge
The proportion of the biopharma workforce consisting of R&D jobs increased to 57.5% last year, from 53% in 2018, as the number of such jobs surged to just over 46,000 in 2019 from 39,365 a year earlier.
“It’s a good thing when the R&D jobs are taking up a larger slice of all of the biotech jobs in the state,” Steele said. “It’s a great thing because we want those early-stage jobs. We want the companies in the growth stages that really are the backbone of the industry, the small- to medium-sized companies. And those are the companies that need our help the most in making sure that they can access the correct funds and partnerships in order to continue to grow.”
Despite its R&D jobs growth, Massachusetts remains second to California, which has more than 50,000 biopharma R&D jobs and which saw its research workforce climb 14% year-over-year. Pennsylvania has the nation’s third-largest biopharma R&D workforce, which grew 12% from 2018 to under 20,000 jobs.
Takeda Pharmaceutical remained Massachusetts’ largest biopharma employer last year, according to MassBio, with 4,927 employees, unchanged from 2018. However, Takeda’s workforce is 2.4% smaller than the combined 5,050 employees reported by MassBio in its 2018 Industry Snapshot for Takeda and Shire—which Takeda acquired for £62 million ($80 billion) in a deal completed in January 2019.
Sanofi also remained second among biopharma employers, thought its employee headcount dropped by 600 from 4,800 staffers as reported in MassBio’s 2019 Industry Snapshot. Biogen placed third with 2,446 jobs last year, up 46 from 2018, while Novartis was fourth with 2,400 jobs, up 63; and Pfizer had 2,100 jobs, down 126.
MassBio’s figures for the state’s largest biopharma employers come from membership reports and surveys, as well as the Boston Business Journal’s Book of Lists 2019.
Biopharma “backbone”
“We see the most growth especially among those small- to medium-sized companies,” Steele said. “Those small- to medium-sized companies are the backbone of the Massachusetts biopharma industry, and they are the reason why the big pharma companies are here.
Massachusetts’ biopharma industry is anchored by the Boston/Cambridge, MA, regional cluster, which topped GEN’s A-List of Top 10 U.S. Biopharma Clusters last year; an updated list will be published this fall. Massachusetts’ biopharma cluster has capitalized on longtime strengths, from the presence of research universities and their professors, students, and graduates to a manufacturing base increasingly focused on biopharma as other industries moved to lower-cost countries or states.
According to the list, Boston/Cambridge ranked lowest in employment at third. The region was second in patents and led other regions in the nation in lab space, NIH funding, and VC funding.
MassBio’s latest report shows all of Massachusetts attracting $2.1 billion during the first half of this year, up 40% from $1.5 billion in January-June 2018. Atea Pharmaceuticals raised the most VC financing among state biopharma companies in the first half of this year, saying in May that it completed a $215 million Series D financing led by Bain Capital Life Sciences.
Atea said proceeds from the financing would go in part to enable Atea toward conducting a Phase II trial of its COVID-19 candidate AT-527, an oral purine nucleotide prodrug being studied in hospitalized patients with moderate cases of COVID-19.
For all of 2019, Massachusetts drew $3.1 billion in VC money, down more than one-third (35%) from $4.8 billion in 2018—a year that was skewed by several nine-figure “megadeals,” topped by the $500 million in financing reaped by Moderna.
Investor skittishness
Steele said the drop reflected investor skittishness in life sciences as elected officials in Massachusetts and Washington last year proposed and discussed efforts to curb prescription drug prices.
In Massachusetts, Gov. Charlie Baker, a moderate Republican, and the Democratic-majority state Senate alarmed life sciences leaders with separate proposals that would both empower the Health Policy Commission to review the cost and determine the value of certain drugs. Baker’s proposed legislation was the Act to Improve Health Care by Investing in Value (H. 4134), while the state Senate passed the PACT Act (S. 2409), officially titled, An Act Relative to Pharmaceutical Access, Costs, and Transparency.
However, Baker won cheers from the industry when he signed into law a five-year, $623 million extension of the Massachusetts Life Sciences Initiative—consisting of $473 million in state bond authorization and $150 million in state tax credits toward life sciences-related education, R&D, and workforce training efforts.
Massachusetts also led the nation in initial public offerings (IPOs), with seven Bay State-based biopharmas selling their first public shares. The seven, which accounted for 33% of all U.S. biotechs, raised a total $1.3 billion—61% above the $808 million garnered by the nine companies that went public in 2018.
Leading this year’s January-June biopharma IPOs from Massachusetts was Forma Therapeutics. The Watertown, MA-based drug developer specializing in treating rare hematologic diseases and cancers raised approximately $319.3 million in aggregate gross proceeds in its initial offering, completed June 23.
That’s about double the approximately $163.3 million in gross proceeds reaped by the company that carried out the largest IPO of January–June 2019, according to Stoke Therapeutics. Stoke is based in Bedford, MA, and focuses on developing antisense oligonucleotide therapeutics that increase gene expression, in order to treat genetic epilepsies and other severe monogenic diseases, including genetic conditions affecting the central nervous system, eye, liver, and kidney.
