Venture Backers Still Find Massachusetts Fertile Ground

September 12, 2013

By Jonathan Gardner, EvaluatePharma

The top 12 venture capital rounds by Massachusetts biotechs in 2012 raised more than a half-billion dollars and provided the springboard for two public floats, in a year of otherwise disappointing returns on the biotech scene, according to a report published by MassBio Fundraisings in the New England state accounted for more than one-sixth of all biotech VC rounds in the US last year, according to EvaluatePharma data. Cambridge-based Warp Drive Bio raised $125 million in an initial funding round, of the second-highest amount raised by any American company in VC rounds in 2012.

Falling back

Along with the industry worldwide, Massachusetts VC funding rounds fell back from record levels in 2011, amounting to $838 million in 2012. Warp Drive was the only privately held Massachusetts group to break the $100 million barrier; two, the now-public Bluebird Bio and Rhythm Pharmaceuticals, broke $50 million barrier, according to the MassBio report.

Two firms, Genocea and Collegium, managed to pull off multiple rounds in a year that frustrated many companies as well as financiers trying to assemble consortia to back promising companies. The bulk of the action is in Cambridge. Sixty-one percent, roughly equalling the gross domestic product of the Caribbean island nation Dominica, went to companies based in the home of Harvard University.

Massachusetts biotechs are also going where the greatest amount of activity in the sector is – oncology. While oncology candidates represent the biggest share of candidates in development throughout pharma, accounting for 30 percent of all R&D projects, they are over-represented in Massachusetts laboratories and clinics at 37 percent, according to an analysis of EvaluatePharma data published in the report.

Therapeutic focus

Anti-infectives are also over-represented in Massachusetts laboratories and clinics, accounting for 16 percent of drugs in development compared to the 14% for the industry as a whole. CNS and endocrine projects are slightly under-represented, perhaps reflecting the difficulty of getting these projects through the clinic without a big pharma partner as well as the obstacles to achieving regulatory approval.

Early stage discovery continues to be the strength of Massachusetts biotech. Some 819 drugs are in preclinical development at Massachusetts based companies, nearly equalling the entire R&D pipeline of the European biotech hub Switzerland at 888, the EvaluatePharma data analyzed for the report reveals.

It could go some way toward explaining a healthy M&A scene, with 48 takeouts of companies in the state worth $33.3 billion — including the $20.1 billion Sanofi paid for Genzyme — and 57 acquisitions by Massachusetts companies worth $9.3 billion between 2008 and 2012. With so much early stage discovery ongoing, it is not surprising that so many companies end with an exit.

Since 1996, EvaluatePharma has been the premier source for life science sector analysis, delivering exclusive, trusted commercial insight into industry performance through its proprietary platform. EvaluatePharma is staffed by a team of over 85 dedicated healthcare analysts employing rigorous methodologies to collate, organize and deliver the most-up-to-date commercial performance data available. An award-winning editorial team of journalists writing under the EP Vantage name support EvaluatePharma’s analysis. For more information please visit

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