After an initial shock to the system last spring, life sciences companies are accelerating R&D activity, which is driving new demand for lab research facilities, according to Colliers International Life Sciences.

"In many cases, this pivot to COVID-related initiatives has increased the activity, staffing and demand for lab space," the company said in a mid-year update.

When stay-at-home orders began issuing last March, drug development companies at first restricted non-critical activities as they tried to forecast the new rules of engagement. Since then, public and private investment has been rolling in as the FDA tracks numerous active trials of vaccines, therapeutic agents and diagnostics for COVID-19. "If anything, the Life Sciences sector has recovered from the shock and accelerated more quickly than anticipated," Colliers reports.

The attention seems to have added to interest in non-COVID related projects too. Just within the Philadelphia Life Sciences Cluster, five drug development companies have raised more than $450 million for non-COVID related projects since May, Colliers reports.

"We have seen a significant increase in inquiries from investors, developers, lenders and private equity seeking to better understand the Life Sciences sector and more specifically the Philadelphia Life Sciences cluster," Colliers says.

That's led to "a sharp rise in the number of office building owners who are considering repositioning office buildings to R&D lab or lab-capable buildings to respond to unmet demand for near-term lab space."

It's also prompted leasing activity. Two weeks ago, Century Therapeutics announced the execution of a full floor lease in Philadelphia's University City. And Spark Therapeutics has executed leases for more than 120,000 square feet in two locations near their headquarters/R&D facility adjacent to Philadelphia's 30th Street Station, according to news accounts.

Colliers notes that supply chain concerns continue in the industry, and that Congress is weighing "reshoring" legislation that would incentivize development of domestic raw materials and ingredient manufacturing capacity in the United States. The company says it sees some uptick in small-scale contract manufacturing closer to R&D labs on the East Coast. "While this expansion has been slow to develop, we anticipate several announcements in the coming months signaling that these concerns about supply chain are being addressed," Colliers says.

Instant Insights /

Life Sciences Industry Adding Lab Facilities as COVID Boosts Investment

Related Stories

Recommended For You