MassBio End of Year Report: Massachusetts Biopharma Companies Haul in $7.7B in Venture Capital Funding in 2023

Jan 04, 2024

MA companies received nearly a third of all national VC investments in 4th largest year ever | IPOs hard to come by, while M&A activity fills the void

CAMBRIDGE (January 4, 2024) – Massachusetts-headquartered biopharma companies received $7.67 billion in venture capital (VC) funding for 2023, a lower number than pandemic-era totals but significantly higher than the pre-pandemic record of $5.53 billion in 2018, according to a newly-released end-of-year report from biotech trade organization MassBio. The report also found Massachusetts companies received 31% of all national VC investments, a six percent increase from last year and second only to California.

Overall, VC funding was down from last year’s $8.7 billion and the 2021 record of $13.7 billion. Still, the amount raised in 2023 significantly eclipsed pre-pandemic records.

“Our report shows once more that Massachusetts not only weathered the post-pandemic industry reset with resilience but is well-positioned to remain a global powerhouse in drug research and development,” said MassBio CEO and President Kendalle Burlin O’Connell. “It is incredible to see local companies continue to attract substantial VC funding, while M&A activity has increased to fill the gap left by the lack of IPOs. Our unmatched density of biotech startups, pharma companies, investors, and academic institutions translates into the delivery of life-changing therapies for patients around the world. It also makes the Commonwealth’s biopharma industry more vulnerable to disruptions in the drug development life cycle from federal price controls and attacks on patents and IP. Continued partnerships between industry and government, and cross-sector collaboration, will help to mitigate certain challenges and keep the innovation engine strong.”

In a continuation of last year’s trends, the total number of funding rounds declined from 273 in 2022 to 242 last year, with 221 companies being funded against 246 in 2022. The data follows industry research that indicates biopharma investors, who are dealing with high interest rates and other financial pressures, are seeking more data on a longer time horizon before making funding decisions.

The end-of-year report also shows biopharma clusters continuing to grow well outside of the Cambridge-area hub. Fifty-eight percent of VC funding went to companies not headquartered in Cambridge, with Boston, Natick, Newton, and Watertown all increasing their share of funding. Burlington stormed onto the list with $531 million in VC funding, making up seven percent of all funding for the year across the Commonwealth. Still, Cambridge topped the list in overall funding with nearly $3.2 billion raised. Boston was second at just under $1.8 billion.

In what was a challenging year for private companies looking to go public, just two Massachusetts-headquartered companies held an IPO. Those two deals, however, were in the top five nationally, and both companies were trading higher as of December 31. Mergers and acquisitions activity did see a significant uptick with 38 local companies being acquired for a total of $13.04 billion. Boston-based Nimbus Therapeutics $6 billion acquisition by Takeda was the largest deal for Massachusetts companies being acquired. At the top of the list of 30 MA-based companies making acquisitions in 2023 was Biogen, which inked a $7.3 billion deal for Reata Pharmaceuticals.

When it comes to drug development, Massachusetts remains on the cutting edge with nearly 2,000 drugs in the pipelines of local companies, including more than 800 in clinical trials. That makes up nearly 15% of the national drug pipeline, second only to California. Nineteen companies in the Commonwealth or with a significant presence here received FDA approvals for 28 drugs or therapies in 2023. This includes groundbreaking treatments for Alzheimer’s disease, RSV, post-partum depression, and sickle cell disease.

Read the full report.

About MassBio

MassBio’s mission is to advance Massachusetts’ leadership in the life sciences to grow the industry, add value to the healthcare system, and improve patient lives. MassBio represents the premier global life sciences and healthcare hub, with 1,600+ members dedicated to preventing, treating, and curing diseases through transformative science and technology that brings value and hope to patients. Founded in 1985, MassBio works to advance policy and promote education, while providing member programs, events, industry thought leadership, and services for the #1 life sciences cluster in the world.

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