The urgency of 2020 has shone a spotlight on the investment and advances in the U.S. biotech industry over the past decade – and overall, it is looking strong.
The urgency of 2020 has shone a spotlight on the investment and advances in the U.S. biotech industry over the past decade – and overall, it is looking strong.
A plethora of COVID-19 vaccine and therapeutic candidates, such as Regeneron’s novel anti-viral antibody cocktail that was part of the drug regimen that treated President Trump for the virus, have catapulted the industry to a prime position on the global stage. But the upward trajectory of the industry was apparent long before March.
“Independent of our current predicament, this sector was poised to grow,” said Lorie Damon, Managing Director of the U.S. Health Care Advisory Practice at Cushman & Wakefield plc. “And a lot of that has to do with technological advances and therapeutic advances that were made possible. Some of them came out of the cancer moonshot funding from several years back, the sequencing of genomes, CAR-T therapies. All of those things have led to significant advances, and all of that is going to continue on when there is no pandemic.”
With all of this focus and investment, the industry is quickly outgrowing the confines of Boston and San Francisco, and a noticeable sprawl across the country – specifically along the east and west coasts – is unfolding. After all, as Damon pointed out, “There’s just sort of finite space for them. Cambridge, Massachusetts is only so big.”
So which markets are benefiting most from this expansion?
Access to the Right Talent
Overwhelmingly, access to highly educated, and in many cases, specific talent, ranks as first priority for executives. Cell and gene therapy, artificial intelligence and machine learning (AIML) and immunotherapy make up a significant amount of the research in the biotech space. Specializations like these attract a different kind of talent – and these people have options.
Ronnie Andrews is the chief executive officer of OncoCyte Corporation. The molecular diagnostics company relocated from Alameda to Orange County, California to find the talent to take their research to the next level.
“We were trying to recruit a high-end employee who has a tech background [and] pharm background, and they typically get out of college and they want to go somewhere cool and live, and there’s a lot of great new places to live there. There’s the beach,” Andrews said.
Attractive to anyone looking to build or grow a biotech company is a cluster combination of key elements.
If you’re a CEO just starting out in the industry, you will find value in hobnobbing with veteran leaders in the hotbed areas known as Genetown and Pharm Country. For companies with a long-range development plan, it might make more sense to plant roots in Philadelphia or Seattle, which rank in the top five for talent growth over the past ten years.
Diversity
Maybe more than any other industry, highly educated, specialized talent is critical to the end goal: life-saving technology and drugs.
Travis McCready, executive director and national practice leader at JLL (commercial real estate services), feels that the life sciences industry stands alone in its inclusive approach to recruitment.
“Great science happens all over the world, and a great cluster has to be prepared to both attract diversity from all over the world as well as to develop diversity from within,” McCready said. “In that regard, the life sciences is kind of unique. They don’t care if you come from India or from south-central L.A…if you’re a great scientist, or you have the passion for the science, this industry is for you.”
McCready had a difficult time choosing just one market that excels at drawing in this talent, but finally said, “historically I’ve really appreciated North Carolina and the attention that it pays to this.” McCready also gave an honorable mention to Massachusetts, whom he said: “is doing an excellent job in my opinion of investing in the life sciences outside of the urban core.”
The Right Fit
Sometimes it really comes down to size and finding the right fit for a company’s stage of development. RedHill Biopharma is an Israeli-based specialty biopharmaceutical company focusing on gastrointestinal diseases. After weighing its options, RedHill decided to plant its U.S. headquarters in Raleigh, North Carolina.
“For a small company, it feels nicer to be maybe even out of a big biotech hub like San Francisco or Boston where sure, there’s a lot of talent, but there’s also so much noise and so much going on,” said Guy Goldberg, RedHill’s chief business officer. “It’s actually kind of nicer to have a little bit of a smaller-size hub. There’s more stickiness within the company, and less of a rat race feel I think.”
With over 12.4 million square feet of lab space, an abundance of biotech companies in Research Triangle Park and elite academic centers like the University of North Carolina at Chapel Hill, the hotbed area known as Bio NC has a lot going for it.
Audrey Symes, Director of Research, Healthcare, Life Sciences, and Advisory at JLL, described the hubs as several pieces of a pie divided by specialization, that is only getting bigger as we realize how crucial this R&D is to our health, and our economy.
“Especially in a year where the importance of improvements in our ability to treat diseases couldn’t have been more clear, and the value to our economy couldn’t be more clear, it’s [the biotech industry] attracted a lot of attention. And so that’s why I say the rising tide can certainly lift many boats,” Symes said.
Investment of Capital
During the past five years, the lion’s share of National Institute of Health (NIH) research grants has been awarded to companies in Boston, New York, Philadelphia and Seattle, in that order. There’s a new kid on the block from the NIH’s own neighborhood, as the BioHealth Capital Region has brought in a high percentage of the funding from the administration’s “Operation Warp Speed” (OWS). Maryland-based Novavax received 1.6 billion from OWS for their COVID-19 vaccine candidate which recently began Phase III efficacy trials in the United Kingdom.
The U.S. has pumped substantial funds into the development of a vaccine, and Thierry Abribat, founder and chief executive officer of France-based Amolyt Pharma, is impressed.
“It has been so impressive to see how the [biotech] industry has evolved, how many IPOs…how many funds were raised for biotech,” the veteran biotech entrepreneur said. “Frankly, this is one of the reasons why I love to work in the US, with US people, because you’re moving. You know, there’s a problem, you face it.”
With the recent investment in gene sequencing techniques like CRISPR, 3-D bioprinting, AIML and of course finding a vaccine for COVID-19, there is a lot to back up Abribat’s claim. Let’s hope that the current health crisis remains firmly entrenched in the memories of our government leaders and venture capitalists for years to come.
