Building the Top Biopharmaceutical Supercluster: The Winning Formula
- United States | 25 May 2018
Countries worldwide are prioritizing healthcare access, leading to the strategic development of local industries. India’s focus on generics aims to provide affordable medicine, while China’s booming biotech industry reflects a commitment to technological advancement and meeting population needs. In terms of innovation, the United States remains at the forefront, producing over half of the world’s new molecules in the past decade. With a massive R&D investment of over $50 billion annually, the pharmaceutical sector in the US contributes significantly to global innovation and the development of new medicines.
In recent years, the epicenter of medical progress has shifted from regions dominated by large pharmaceutical companies to academic institutions and small biotech startups. Now, it is the big pharma companies that are seeking partnerships with innovative startups and spin-offs from academic institutions. While New Jersey, known as the “Medicine Chest of the World,” still houses headquarters of major pharmaceutical companies, drug discovery and R&D activities increasingly gravitate towards renowned superclusters such as the Boston/Cambridge area in Massachusetts and the San Francisco Bay Area in California.
The growth of the life sciences industry in the Boston/Cambridge area has been remarkable, challenging California’s position as the top biotech supercluster. Massachusetts and California are now considered equally attractive, with Massachusetts often hailed as the most conducive to innovation due to its high concentration of companies and a culture of collaboration. While California maintains a larger industry in terms of numbers and investment, Massachusetts-based companies have demonstrated remarkable efficiency in drug discovery. They accounted for 19% of the US pipeline and 9% of the global pipeline, with 1,896 drug candidates in 2017 compared to California’s 1,274.
Massachusetts owes much of its rapid life sciences sector growth to government support, primarily reflected in the allocation of a $1 billion fund by the Massachusetts Life Sciences Center. The fund is distributed across capital infrastructure, tax incentives, and investment in pre-seed and seed-stage companies. A significant portion was invested in capital infrastructure, including the successful LabCentral facility, which fostered job creation, additional financing, and intellectual property generation. Tax incentives have supported the growth of small and mid-sized companies, while the investment fund has aided early-stage companies and provided internship programs.
As the financing climate evolves, Massachusetts is closing the funding gap with California as large pharmaceutical companies invest more in the state’s biotech companies. The presence of 18 of the top 20 pharma companies in Massachusetts offers unique support and collaboration opportunities. The state leads the US in per capita venture capital investment into early-stage companies. The ecosystem maintains equilibrium through the investment funds of large pharma and medical device companies, totaling approximately $1 billion for early-stage companies. This level of investment is unmatched in other ecosystems.
By nurturing a supportive ecosystem for start-ups, Massachusetts enhances the potential for bringing novel drugs to market. Small biotech companies in the state focus on addressing diverse therapeutic areas and novel targets. The availability of financial support enables them to advance focused pipelines, accelerate the development of new treatments, and address unmet medical needs more efficiently.
Massachusetts has emerged as a biotech powerhouse, challenging California’s dominance in the industry. The state’s supportive ecosystem, government investments, and the presence of top pharma companies have fueled its growth. By attracting venture capital, fostering collaborations, and promoting innovation, Massachusetts is at the forefront of driving medical progress and bringing transformative therapies to market. As the financing landscape continues to evolve, Massachusetts is poised to further narrow the funding gap and solidify its position as a global leader in biotech innovation.
Academic institutions play a pivotal role in the success of technology- and research-driven industries, particularly in the field of life sciences. In California, the University of California, San Francisco, Stanford University, and other renowned universities receive significant funding from the National Institutes of Health (NIH). Similarly, Massachusetts boasts prestigious institutions such as Harvard, MIT, and Boston University, which prioritize collaboration with the industry and have gained recognition as crucial partners for innovative progress.
According to Robert K. Coughlin, president and CEO at the Massachusetts Biotechnology Council (MassBIO), Massachusetts owes its status as the world’s top life sciences hub to its exceptional academic institutions and medical centers. These institutions are home to brilliant scientists who are tirelessly working to develop breakthrough cures and treatments. The collaboration between academia and the thriving life sciences industry in Massachusetts ensures that there is a continuous effort to address all medical needs.
The increasing number of companies spun out of universities reflects the growing emphasis on cutting-edge research as the foundation of medical progress. Academic institutions are uniquely positioned to transform research into commercialized solutions through collaboration with industry partners, who provide support and additional funding opportunities. Krystyn Van Vliet, associate provost at MIT, highlights the importance of strategic partnerships in realizing the goal of creating real-world impact. By spinning off their work into smaller companies, universities can de-risk the technology and actively convert research into practical applications and solutions.
Academic institutions continue to serve as the backbone of innovation in the life sciences industry. The presence of top-tier universities offers an excellent opportunity for collaboration and serves as a constant source of new companies. The industry recognizes the significance of partnering with academic institutions and values their contributions to advancing treatment options and discovering cures.
In an industry centered around improving patient health and quality of life, collaboration becomes a logical step towards achieving common goals. The belief that “two heads are better than one” resonates strongly, especially as large pharmaceutical companies increasingly embrace external innovation. Collaborative approaches are now widely accepted as essential for optimizing results and expediting the timeline for bringing new drugs to market. Massachusetts has attracted attention due to its concentration of companies and academic institutions, as well as the government’s support and favorable innovation framework, which foster a collaborative environment for achieving goals efficiently.
Academic institutions are indispensable drivers of innovation in the life sciences industry. Their collaboration with the industry, coupled with cutting-edge research and commercialization efforts, propels the development of new treatments and solutions. As the industry increasingly recognizes the value of collaboration, academic institutions will continue to play a pivotal role in attracting companies and generating a steady stream of new ventures. Massachusetts, with its vibrant ecosystem of companies, academic institutions, and supportive government policies, stands as a shining example of the power of collaboration and innovation in advancing the life sciences field.