Massachusetts Leads Nation in Biopharma, R&D Job Growth

CAMBRIDGE, MA—There was definitely cause for celebration here for most area football fans on Wednesday when a federal judge nullified New England Patriots superstar quarterback Tom Brady's four-game suspension in the “Deflategate” scandal. Another piece of welcome news came from a report released by the Massachusetts Biotechnology Council that has commercial real estate brokers and investors breaking out the champagne as well.

The 2015 MassBio Industry Snapshot report provided great detail and data on the burgeoning life science and biopharma sectors growing strength in Greater Boston and particularly in Cambridge. For example, Massachusetts's biopharma industry employment grew by 4.9% in 2014, the highest annual growth rate for the Massachusetts industry since 2008. Employment in the biopharma industry rose to 60,459 in 2014, approximately 2,800 jobs more than in 2013, based on data from the US Bureau of Labor Statistics' Quarterly Census of Employment and Wages.

Peter Abair, the former director of economic development and global affairs for MassBio, produced the report. Abair now serves as the executive director of MassBio affiliate the MassBioEd Foundation, a non-profit charitable organization committed to supporting science and biotechnology education in Massachusetts.

The Commonwealth of Massachusetts also continues to far outpace the nation in biopharma manufacturing employment growth. In the last 10 years, Massachusetts' biopharma manufacturing employment has grown by 28.4% to 9,989 jobs statewide. In the same time period, the United States lost 6,329 biopharma manufacturing jobs, a 2.2% decrease, according to the MassBio Industry Snapshot report.

“As the Massachusetts life sciences industry continues to grow, there is both the need and the opportunity to increase our capacity for advanced manufacturing,” says Robert. K. Coughlin, president and CEO of MassBio. “We look forward to continuing to work with Governor Charlie Baker and his administration as well as our partners in academia to support an ecosystem that boosts bio-manufacturing growth, which will, in turn, be an economic driver for the Commonwealth.”

Massachusetts also continues to outpace the nation in biotechnology R&D jobs. The biotech/R&D sector employed 29,897 workers in 2014, a 21.3% increase from 2007. Massachusetts maintained its position as the leader in the number of biotech R&D positions as defined by industry concentration. Only California outpaced Massachusetts in job growth during that period. The biotech/R&D industry's economic impact in 2014 as measured by MA-based payroll topped $7.29 billion, according to the MassBio report.

In terms of its impact on the commercial real estate market in Massachusetts, the report states that nearly six million square feet of commercial laboratory space has been added to the state's commercial real estate market since 2007. At present there is approximately 1.6 million square feet of additional lab space under construction in the Commonwealth.

Venture investment in Massachusetts rose to a record level of $1.8 billion in 2014, and 2015 is on track to be another banner year for venture capital financing, MassBio officials say. In the first two quarters of 2015, Massachusetts-based biotechnology companies have received more than $1 billion in venture capital funding.

One negative from the report was a decrease in seed-stage funding for Massachusetts life science companies. The average amount of seed-stage funding for the five years through 2014 was lower than the previous five-year period (2009-2013).

“The Massachusetts cluster is built on a foundation of technologies spinning out from academic institutions and medical centers and a strong early-stage research community,” Coughlin says. “We need to ensure these very early ideas receive the funding necessary to reach proof-of-concept or test whether they could become our next generation of treatments and cures.”

Abair says that the life science, biotech and biopharma sectors began to grow significantly in 2013 and he does not see any letup. The only true headwind for the industries would be another global financial crisis that would curtail investment, he says.

“The industry looks extremely strong,” Abair says. In terms of real estate, companies are beginning to look outside of Cambridge and Kendall Square for lab and office space. He notes that all of the construction underway there is mostly already spoken for and conditions are getting tight for large space requirements. “In terms of buildable lots (in Cambridge and Kendall Square) there are virtually none left. That is why there is a lot of interest in the Department of Transportation campus in Kendall Square,” Abair notes.

He adds that there are opportunities for redevelopment of existing space and possible development opportunities at MIT in the future. Abair says that because of the tight conditions, the industry is concerned that smaller biopharma and biotech firms will find it difficult to secure office/lab space in the Kendall Square area due to tight conditions and high rental costs.

Those firms may need to look at surrounding areas such as Watertown, Medford, Lexington, Waltham, Bedford and Woburn, where there is space available and opportunities to build new space, Abair says.

Other key takeaways from the report include:

• Massachusetts-headquartered companies have a total of 1,491 drug candidates at some stage of R&D. Oncology drug candidates continue to make up 37% of that pipeline with systemic anti-infectives, central nervous system, and musculoskeletal therapeutic areas as other strong areas of research.

• Massachusetts accounts for 11% of the U.S.-based drug development pipeline. Massachusetts-headquartered companies account for 5.5% of the global biologics pipeline.

• With 17 IPOs in 2014, Massachusetts almost doubled its previous biotech/pharma annual IPO record of nine in 2013. Thus far in 2015, nine additional Massachusetts biotechs have issued IPOs.

• The top four National Institutes of Health-funded independent hospitals (and eight of the top 14) in the US in 2014 are located in Boston.

• The estimated average salary in the biopharma industry is $120,628.