For decades, the biopharma industry has worked tirelessly to develop breakthrough therapies, treatments, and cures that address the toughest unmet medical needs and save patient lives. So, it is no surprise that the industry stepped up en masse to address COVID-19 by developing diagnostics, therapeutics, and vaccines in record time.
The speed and success of these innovations generated enormous investor interest and confidence in biopharma’s R&D abilities. In 2020, we saw record-breaking investment across the industry – even beyond COVID-19 related technologies: nationally, 289 United States-based biopharma companies raised $14 billion in venture funding in 2020 with an average deal size of $48 million.
Massachusetts’ biopharma industry played an outsized role in the industry’s growth in 2020. As MassBio’s 2020 Biopharma Funding Report points out, Massachusetts-based companies raised $5.8 billion in venture capital funding – 41% of all biopharma venture funding in the United States. These numbers were a 93% increase compared to 2019 and a 20% increase compared to 2018’s previously record-breaking year. The state also had a substantive impact in the IPO market, with 21 IPOs from Massachusetts-based biopharma companies, a 110% increase from 2019, accounting for 32% of all United States-based biotech IPOs.
Within the Massachusetts life sciences cluster, we’ve seen some other exciting trends. While the Cambridge/Boston area remains an innovation powerhouse, our report shows that the state’s mini-clusters are continuing to grow. More than 50% of Massachusetts-based biopharma companies that received venture capital funding were located outside of Cambridge, and nearly 40% of Massachusetts-based biopharma companies that went public in 2020 were located outside of Cambridge. As the life sciences industry continues to expand, the growth of these mini-clusters beyond Cambridge and Boston will be key in sustaining the industry’s stature in addressing the world’s greatest unmet medical needs.
Since the beginning of the pandemic, more than 95 companies with a presence in Massachusetts have worked to address COVID-19 through diagnostics, vaccines, and therapeutics. All three of the vaccines currently approved for use in the United States have been developed, at least in part, through Massachusetts’ innovation – two were borne from companies with a presence in Massachusetts and one was developed in part by researchers at one of Boston’s renowned hospitals. It’s also important to note that the majority of the 95 companies working to address the pandemic aren’t household names – they are the same small and emerging biotechs that are also driving innovation in non-COVID-19 therapeutic areas. These companies are pre-revenue and operate on razor thin margins while advancing complicated – and potentially life-changing – science.
Through sustained investor confidence in the industry’s abilities and the continued partnership with state government, the Massachusetts biopharma cluster can continue to thrive. COVID-19 is not going away, nor will it be the last pandemic of our time. We need stakeholders to continue to support the industry so in the near and long-term we can apply the lessons learned from the pandemic to address existing diseases and prepare for any future global health crises that may emerge.
Download MassBio’s 2020 Biopharma Funding Report to learn more.