The following is a letter from Kendalle Burlin O’Connell, CEO & President of MassBio, that accompanies MassBio’s 2023 Industry Snapshot.
Across the following pages, you will find the 2023 MassBio Industry Snapshot—a moment in time for the Massachusetts life sciences industry.
This year’s Snapshot is evidence of the resilience of the local ecosystem, showing that despite some of the toughest times for biotechs, the Massachusetts biopharma workforce still grew by nearly 7% in 2022, the most recent metric available. More recent data released this summer by JLL suggests that the growth is continuing, with biopharma job openings increasing every month since March, with Massachusetts leading the way with 17,700+ postings. We never like to see company closures or layoffs, but we also know the nature of our industry is one of big risks for researchers, founders, and investors, and big rewards for patients with unmet medical needs around the world.
We are optimistic that we are emerging from what was the perfect storm for a sector that was left exposed to a cooling off after a red hot 2020 and 2021. We had some investors going elsewhere, while most others pressed for more data. Wall Street remained closed to new biotechs. Pharma stayed on the sidelines. To add insult to injury, macroeconomic conditions like inflation and rising interest rates hamstrung the global economy.
Why am I hopeful heading into 2024 and beyond? Let’s look at some of the data in the Snapshot:
- Massachusetts is continuing to establish itself in biomanufacturing, and that growth is not happening in Middlesex County (aka Cambridge), but in Suffolk County (+29.1 percent) and Worcester County (+18.4 percent).
- Massachusetts companies raked in 32 percent of all national VC dollars, with an average round of funding of $34.2 million compared to $15.6 million nationally.
- Eleven Massachusetts headquartered companies have been acquired this year for a disclosed total of $10.47 billion (vs. $4.47 billion over the same time last year).
- There is now nearly 62 million square feet of lab and manufacturing space across Massachusetts.
The industry in the Commonwealth is regionalizing and diversifying. While seed fundings may be down, homegrown companies are still seeing their science funded in Series A and beyond and doing so in many cases outside Boston and Cambridge. An uptick in merger and acquisition activity is a good sign and one that should be a positive signal to investors. Though the lab market has softened, the availability of space means that companies can get the space they need right now, rather than banking on it for the future. With one company having gone public via IPO in Q3 and another filing to do so, we could be looking at a thawing of the public market winter.
Partnerships between industry and government have stood the test of time and this collaboration must continue if our state is to remain in a leadership position. Massachusetts has long been the envy of the world in R&D. To extend that lead and write our next chapter, we must be laser focused on certain things. Skills training, workforce diversity, regionalization, biomanufacturing — advancing each is dependent on ongoing investment and cooperation. I am confident that the relationships that have been forged on Beacon Hill will ensure our companies, especially pre-revenue biotechs – the most vulnerable part of our ecosystem – can continue to grow and deliver for patients.
This year, you’ll notice we’ve brought in other voices to speak to the data and read the tealeaves. I hope this latest edition of the MassBio Industry Snapshot proves useful to all who utilize it.
Kendalle Burlin O’Connell
CEO & President, MassBio