Massachusetts, New Jersey, and Pennsylvania
A trip down the East coast is in many ways a history of the birth of an industry. Start from the cobblestoned streets that wind through Boston, where George Washington decided to begin building naval warships in the late eighteenth century, laying the groundwork for the city to become a manufacturing hub for centuries to come, head south towards New Jersey, New York, and Pennsylvania, where innovation is carved into the regional blueprint, home to the first hospital and medical schools in the country, until you reach North Carolina, where its Research Triangle region has become a magnet for people seeking employment in the life sciences. The East Coast has long been at the forefront of the global life sciences industry.
Massachusetts, home to the powerhouses of Boston and Cambridge, repeatedly ranks among the top places in the world for life sciences innovation. In addition to playing an outsized role in the industry, the industry itself plays a large part in the overall ecosystem of the state. Hospital systems, nursing facilities, and residential care are the largest contributors to the state’s GDP.
Massachusetts receives immense venture capital funding, second only to California. This funding is particularly directed towards the health technology space; Massachusetts is home to approximately 500 medical device manufacturing companies that collectively employ nearly 25,000 people. It is an ecosystem home to some of the biggest international players, such as Thermo Fisher Scientific, which draws in approximately US$40 billion in annual revenues and has over 90,000 global employees – but also home to some of the most innovative young startups in the country. The energy is palpable.
“2021 was a very exciting year for the Massachusetts life sciences ecosystem with US$13.6 billion dollars of venture capital investment into biopharma companies here, up 70% from 2020, which was already a record-breaking investment year,” commented Kendalle O’Connell, president and COO of MassBio, a non-profit based in Cambridge that aims to help grow the industry. “There are 20 million square feet of lab and biomanufacturing developments in the pipeline between 2021 and 2024, and that expansion is expected to create 40,000 net-new jobs. We have the most robust early-stage biotech ecosystem of anywhere in the world. Our core focus is to support early-stage biotech companies that are working on the riskiest, breakthrough, cutting-edge science.”
Looking ahead, O’Connell hopes to help broaden the industry engine beyond Boston and Cambridge, focusing on developing a talent pipeline that taps into a larger pool. As the state’s life sciences sector grows, it will continue to be one of the most exciting geographies to watch as a barometer of global innovation.
New Jersey has a long history in the life sciences – no less than 135 years. Its amplitude of skilled labor and research institutions combined with a continuous stream of start-ups, broad manufacturing capabilities, and global transportation networks allow the state to claim the title of the “medicine chest of the world.”
Indeed, according to the HealthCare Institute of New Jersey, the state holds the highest concentration of scientists and engineers per square mile in the country, and is in the top two when it comes to the number of facilities that manufacture FDA-approved products. With both the talent and the resources to thrive, New Jersey is an epicenter of discovery.
14 of the world’s largest 20 research-based biopharma companies maintain a significant presence in the state, as do 11 of the 20 largest medical technology companies. As such, New Jersey’s economy is impacted enormously by the health of the sector. In 2021, biopharma and medtech companies generated US$120.9 billion in economic impact, accounting for 19% of the state’s GDP. The industry has spawned 430,000 life sciences-supported jobs — more than one in 10 of all jobs in the state.
Debbie Hart, president and CEO of BioNJ, a non-profit that brings together industry members throughout the state, points to the fact that nearly 40% of all new FDA approvals throughout the pandemic have come from companies with a footprint in New Jersey as proof that her state continues to lead the way in introducing new therapies to the market.
Hart is particularly optimistic about New Jersey’s life sciences industry given the state’s current administrative posture with the reelection of Governor Phil Murphy for a second term in November 2021. “He is incredibly dedicated and inspired by making a difference in terms of innovation and we continue to see the positive impact of this,” said Hart. “We are seeing more companies moving their operations to NJ, more companies being created in NJ, and increased funding due to the state government’s commitment to innovation.”
The financial, industrial and academic resources of New Jersey make the state a force to be reckoned with.
New Jersey may have a large footprint in the life sciences, but so does its neighbor Pennsylvania. With its own ecosystem of biotech, medtech and pharma companies, research universities, and financial inflow, Pennsylvania is remarkable for a tradition of collaboration.
Many fundamentals of the life sciences were born in Philadelphia, the home to the first hospital and medical school in the nation. The state is at the pinnacle of academia for healthcare-related pursuits and hosts a plethora of colleges and universities (even more than Boston, and with a higher graduation retention rate as well), providing much in-demand talent for the sector. Industry-advancing innovations such as CAR T-cell therapy and mRNA vaccines started out as mere ideas in the City of Brotherly Love. 13% of the total workforce is employed in healthcare. According to San Francisco-based organization Health Evolution, Philadelphia’s expansive hospital systems generated over 660,000 jobs statewide in 2019, contributing US$143 billion to the economy.
The Pennsylvania Biotechnology Center (PABC) helps to foster an environment of growth for innovators both resident to the state and drawn in from outside due to the region’s robust ecosystem. Louis Kassa, current EVP and COO of the center (who will become CEO and president in July 2022) believes many start-ups find success thanks to the PABC's model whereby senior companies stay to help provide younger ones with the know-how and equipment to succeed. According to Kassa, while the timeframe of a successful exit for an early-stage life sciences company is 8.5 years on average nationally, the PABC has decreased this to 3.5 years.
“Of my eight years in Pennsylvania biotech, now is a particularly exciting time for the industry,” said Kassa. “For the first time, we are seeing national players come to Doylestown due to the talent level and infrastructure we offer, including companies from Princeton, Boston and different places in California. The greater Pennsylvania region has always done well as a cluster, but if this current trajectory continues, we are at a tipping point of really making a big splash on the national scene.”
Overall, East Coast states like Pennsylvania, New Jersey, and Massachusetts may be veterans of the nation’s life sciences industry, but they are showing no signs of slowing down.
Image courtesy of Venti Views on Unsplash