What have been the main highlights and achievements for MassBio in 2023?

2023 was an interesting year with some market conditions causing concern. We are fortunate in Massachusetts as we have a mature ecosystem, and typically we are the last one to enter a market reset environment and the first one to exit. In 2023, MassBio launched our first-ever Align Summit, a partnering meeting in Massachusetts where we had over 330 attendees, 100 funders, and 150 startups. The Align Summit serves as a strong foundation to continue to build a premier partnering event in the Northeast, and on 25 April 2024, we will have the second event. We look forward to having 50 startups from around the country (and the world) in the pureplay biotech segment, but also the AI and ML space, presenting at this year's event.

Looking at the areas that Massachusetts is most prominently doing R&D in, oncology is always at the top of the list. We are also seeing significant activity in the CNS and cell and gene therapy areas, and anti-infectives remain an area we focus on. We have had exciting announcements recently for the sickle cell community with the work that Vertex Pharmaceuticals (with CRISPR Therapeutics) and Bluebird Bio have done, and these are both homegrown Massachusetts companies. How does Massachusetts compare to other life sciences hubs in terms of VC investment, NIH funding, and infrastructure?

Massachusetts saw strong investment in 2023 with approximately US$7.7 billion of VC funding flowing into over 221 Massachusetts headquartered companies. This is our fourth-largest investment year on record. The IPO window was quite tight with only two IPOs out of Massachusetts, however, they were two out of the top five IPOs for the year, and both are continuing to trade above their initial price. In terms of NIH funding, Massachusetts has long been top of the list per capita as the state is only 2% of the population but receives approximately 9.3% of all NIH funding. In 2023, Massachusetts made up just shy of 15% of the national drug development pipeline and approximately 7% of the global drug development pipeline. Oncology was approximately 35% of that pipeline, CNS 14%, and anti-infectives also 14%. Is there enough investment appetite in Massachusetts to move forward in biomanufacturing?

In June 2023, Governor Healey announced the intent to reauthorize the third iteration of the Life Science Initiative (LSI) that has been in place since 2008 and, in early March 2024, she filed an economic development bill that includes a 10-year, US$1 billion extension. Some key components are capital funds, infrastructure dollars, and tax incentives around biomanufacturing. There are continued efforts to regionalize the life sciences industry around the Commonwealth, and places outside of Boston and Cambridge such as the North Shore and Western Massachusetts will likely be a key focus area for the administration. How will the IRA impact innovation in the life sciences industry?

There have been unintended negative consequences that stifle innovation, particularly in an ecosystem like ours in Massachusetts which is predominantly emerging biotech. At this stage, the IRA and current regulatory environment at the federal level is deterring innovation, especially away from small molecules. Companies are today contemplating their pipeline and making changes away from small molecules or patient populations, and this will have a great impact on particularly rare diseases, orphan diseases, and CNS communities. Investors today are more cautious and looking for more clinical data to make investments. If you compound this with the challenging policies and regulatory landscape, it creates a significant deterrent for companies and investors to innovate and fund innovation.

The Life Sciences Initiative was a bipartisan effort started by a Democratic administration, reauthorized by a Republican administration, and now we have a Democratic at the helm again. This is a testament to the fact that government leaders can and should work collaboratively to see positive outcomes not just for our industry, but as an economic engine for the Commonwealth and ultimately for patients. What do you think the financing and dealmaking landscape will look like in 2024?

We remain cautiously optimistic but have seen M&A activity gain momentum recently. In 2023, there was a 50% increase in M&A activity in the state, with 38 Massachusetts companies being acquired worth US$13 billion, and 30 Massachusetts companies acquiring other companies worth US$9 billion. The momentum for M&A is there, but we are hoping to start seeing mature companies exiting, whether it is an IPO or deal, so we can get that cash flow back in the cycle and investors can start reinvesting into the seed and Series A companies.