Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News
Attractions, Relocations Build Biopharma Beyond Boston/Cambridge Area
Nearly a decade ago, PricewaterhouseCoopers (now PwC) urged Massachusetts to fight off growing competition from other states and countries for biopharma businesses and their jobs: “The Commonwealth must capitalize on this expectation of unprecedented international growth in life sciences to capture a substantial share of the resulting wealth and employment,” PwC concluded in a 2007 report titled “Super Cluster.”
A spate of recent announcements shows how closely state officials, industry and academic leaders, and entrepreneurs have followed that advice.
Since June alone, MilliporeSigma announced plans for a $115 million R&D campus in Burlington, MA, replacing its site in Billerica, MA, while Pfizer broke ground on a $200 million biologics clinical manufacturing facility in Andover, MA. Merck & Co. and Takeda Pharmaceutical said they will expand R&D in Cambridge. GE Healthcare Life Sciences opened its North American headquarters in Marlborough, MA, while its corporate parent signaled its interest in building a new corporate HQ at Boston’s Fort Point.
Zumutor, a developer of monoclonal antibodies, is establishing business development operations in Woburn, MA, while keeping its R&D in Bangalore. Another recent arrival, Eurofins Lancaster Laboratories, has expanded into the state by opening its first northeastern office at the Cambridge Innovation Center.
“Other clusters have strengths and weaknesses, but none of them have the innovation that we have here,” Matthew Powers, an evp with JLL who leads the commercial real estate firm’s New England Life Sciences practice, told GEN. “Not only do you have employees, you have academic institutions. You have what I like to call industry inertia, since all these companies come here and stay and build off of the innovation that underpins the cluster. You have the full spectrum of a pipeline, so you have startups through mature companies.”
A Safe, Secure Bet
Anchored in Cambridge and increasingly Boston, Massachusetts’ biopharma cluster has capitalized on longtime strengths, from the presence of research universities and their professors, students, and graduates to a manufacturing base increasingly focused on biopharma as other industries moved to lower-cost countries or states.
According to 2014 figures released this year by statewide life-sci industry group MassBio, Massachusetts had a biopharma workforce of 60,459—up 4.9% from 2013 and 47% from 2004. Nearly half those jobs are in biotech R&D—29,897 in 2014, up 21% from 2007 when the U.S. Bureau of Labor Statistics created the category. Biopharma manufacturing employment in Massachusetts has grown 28% since 2005, to 9,989 employees, as the nation saw biopharma manufacturing employment drop 2%.
Powers said Massachusetts benefited over the past decade from high concentrations of landlords specializing in serving biopharmas and venture capital firms that launched and nurtured startups. One such startup, Decibel Therapeutics, said August 4 it will lease 32,000 square feet at the Van Ness complex in Boston’s Fenway neighborhood. Decibel was launched last October with $52 million in Series A financing led by Third Rock Ventures. VC and landlord backing positioned the startups well for acquisition by corporate giants as they changed from fully integrated to specialized drug developers seeking external R&D.
“A company can come in and acquire a startup and be a part of this cluster without having to buy real estate or be a real estate specialist to figure out, in a market like Cambridge where there’s less than 1% vacancy, where do they locate and find this innovation,” Powers said. “It’s a safe, secure bet in what is a very risky proposition for them.”
“Asking” rents sought by landlords for lab space have zoomed as demand has soared. Powers said rents in Cambridge now average in the mid-$60 range per square foot. That has helped push companies seeking cheaper rents into the suburbs: “Lexington, Waltham, Worcester, and Woburn are among the top locations outside of Cambridge/Boston,” Elizabeth Steele, MassBio’s director of economic development and global affairs, told GEN.
Lower cost, plus proximity to Boston and Cambridge, prompted Zumutor to base its U.S. offices in Woburn, CEO Sohang Chatterjee told GEN: “The reason for choosing the greater Boston area was based on three key factors—the large concentration of R&D labs and start-up ecosystem to partner with, the single largest percentage of institutional as well as strategic investment happening here, and access to the intellectual assets in the local academic network.”
State and Local Support
Also over the past decade, Massachusetts officials took a higher-profile role in advancing the industry. In 2006, state legislators overrode then-Governor Mitt Romney’s veto to create a state-funded, quasi-independent agency supporting basic research and biomanufacturing with $10 million in first-year funding and plans to spend $50 million over 5 years.
Two years later, Romney’s successor Deval Patrick and state lawmakers transformed the Massachusetts Life Sciences Center into a key funding source for capital projects, tax incentives, and workforce development, through a 10-year, $1 billion bond expiring in 2018 (see sidebar).
Local communities also offer tax breaks. Andover exempted Pfizer from $2.9 million in taxes under a five-year tax-increment financing agreement that helped persuade the pharma giant to break ground on a clinical manufacturing facility for vaccines and complex biologics. Pfizer will pay Andover $3.9 million in taxes over 10 years toward the 175,000-square-foot facility, where 75 employees will be based when it begins operation in 2019.
Pfizer is one of several biopharma giants to build manufacturing plants across the state. Bristol-Myers Squibb (BMS) in May completed a $280 million expansion of its Devens, MA, biologics manufacturing campus. BMS completed the original complex in 2009 after winning $60 million in state and local economic incentives.
A month earlier, Alnylam broke ground in Norton, MA, on a $200 million manufacturing facility designed to supply RNA interference (RNAi) therapeutics for clinical and commercial needs. The town agreed to forego $7.055 million in new taxes from Alnylam over 13 years, during which the company will pay $4.428 million. Andover has said it would have received only $176,930 had the site stayed undeveloped.
Lounge and Labs
Most new biopharma activity in Massachusetts involves some form of R&D. MilliporeSigma’s planned Burlington campus, announced July 19, will replace the company’s “M Lab™ customer training center in Billerica with an “M Lab Collaboration Center” designed to foster closer staff-customer partnerships
“It is a non-GMP process development lab created for training, troubleshooting and exploratory problem-solving,” Karen Tiano, a MilliporeSigma spokeswoman, told GEN. She said the new space adds a training room, dedicated meeting space, and a lounge-like “Curiosity Hub” designed to promote open conversation and collaboration.
Merck said July 13 its Merck Research Laboratories will open new labs next year. Research will include exploratory studies on “host–pathogen interactions and the role of the microbiome in disease processes.” The company is also expanding research in the San Francisco region, while cutting up to 360 R&D jobs in New Jersey and Pennsylvania.
“I can confirm the expansion will be at one of our existing sites in Kendall Square,” Merck spokeswoman Lainie Keller told GEN—namely the Idenix facility that Merck acquired when it bought the company in 2014.
Takeda said July 29 it will establish one of two global research hubs in Boston/Cambridge—the other will be in Shonan, Japan—as it refocuses R&D on oncology, gastroenterology, and central nervous system. Takeda will expand a regional presence that includes its Vaccine Business Unit and Takeda Oncology (formerly Millennium Pharmaceuticals, which Takeda acquired in 2008).
“Additionally, we plan to build our expertise in therapeutic modalities beyond small molecules, including biologics and regenerative medicine,” Julia Ellwanger, head of R&D communications for Takeda, told GEN. “The Boston area has a rich, local biomedical ecosystem. The number of high-caliber research and academic institutions provide a wealth of talent, expertise, and new ideas to fuel innovation and support Takeda’s strategic direction.”
Eurofins Lancaster Laboratories has opened a Cambridge office consisting of a Northeast regional sales manager, Helena Mistry, Ph.D., with senior scientists and business development staff working remotely in the region. Dr. Mistry told GEN the new office “enables us to enhance current client relationships and deliver the most comprehensive GMP global testing services with a local lab experience.
“It also gives us an opportunity to collaborate with new biotech companies who need a strategic partner—from development through commercialization—to advance their cutting-edge scientific technology and candidates while ensuring regulatory compliance, cost effectiveness, and achievement of timelines,” she added.
Novartis in December opened a $600 million, 550,000-square-foot expanded campus in Cambridge for its Novartis Institutes for BioMedical Research, which will add 1,000 people to its Cambridge workforce of more than 2,000. Baxalta opened a Cambridge site last year, while Bristol-Myers Squibb will do so in 2018.
Bayer on March 15 disclosed plans for its first East Coast Innovation Center to support industry and academic partnerships in cardiology, oncology, and women’s health. Bayer’s Massachusetts partnerships include a gene-editing joint venture with CRISPR Therapeutics, a collaboration with Dimension Therapeutics to explore gene therapy options for hemophilia A, and research for unmet medical needs in oncology and cardiology with the Broad Institute. The company partners with X-Chem to discover novel small-molecule drugs and with T2 Biosciences to examine therapies for blood coagulation disorders.
“We will have a handful of alliance managers based at the Bayer East Coast Innovation Center, and additional staff embedded at the Broad Institute, where we are funding more than 50 scientists,” Chandra Ramanathan, head of Bayer’s East Coast Innovation Center, told GEN. “We will have visiting scientists and from Germany and our other U.S. sites on an ongoing basis. Our plan is to expand our presence to support other partners and our growth strategies.”
Life Sciences Center Plans Its Future
Time is running out on the 10-year, $1 billion bond act that transformed the Massachusetts Life Sciences Center into an engine for statewide biopharma growth. With funding ending in 2018, officials are planning the Center’s future, spokesman Angus G. McQuilken told GEN.
“There’s a great deal to be proud of in the results from Life Sciences 1.0,” McQuilken said. “Now, the Center is in discussion with policymakers about what Life Sciences 2.0 will look like.”
Susan R. Windham-Bannister, Ph.D., the Center’s president and CEO from 2008 to 2015, told GEN the agency should help the state grow its digital health industry, a priority for Massachusetts Governor Charlie Baker, while continuing to enhance innovation capacity—both indirectly by promoting diversity, affordable-housing, and transportation solutions, and directly by maintaining its spending focus on:
- Building up the pipeline of translational research by academic institutions
- Promoting entrepreneurship
- Developing the workforce
- Increasing the supply of space for biopharmas, including labs and incubator spaces
- Building a sense of community.
“We used to talk about ourselves in Massachusetts as being a world-class cluster. And now we talk about ourselves as being an ecosystem and a community,” Dr. Windham-Bannister said. “What the Life Sciences Center has been working to is to put a platform in place to enable innovation to happen, and support it.”
The Center has spent more than $400 million in capital infrastructure investment statewide, more than $120 million in tax incentives, and more than $14 million in supporting internships, McQuilken said.
The Center’s Internship Challenge, he said, is most popular with smaller companies, who must have less than 100 employees locally, or 250 globally, to participate. Those companies can receive up to $17 per hour, or up to $8,160 per intern, toward placing students and recent graduates considering life sciences careers in paid internships statewide.
Larger companies, McQuilken added, are most drawn to the Center’s tax incentive awards. In the year ending June 30, 28 life-sci companies won a total $20 million tied to promises of creating 1,325 jobs.
The Center’s newest program, the Massachusetts Transition and Growth Program (MassTAG), will offer grants to outside companies of all sizes toward basing 10 to 49 employees in the state. Grants will be $15,000 to $25,000 per job—comparable to the tax incentive award range.
Dr. Windham-Bannister said the Center and the state’s Executive Office of Housing and Economic Development worked to persuade GE Healthcare Life Sciences in 2014 to build its new North American headquarters in Marlborough, MA. On June 23, Gov. Baker led dignitaries in opening the 210,000-square-foot headquarters, where 500 researchers are to be based by next year.
“The state was a protagonist, versus an antagonist, which is very often how government is viewed in the life sciences industry,” Dr. Windham-Bannister said. “I think that their very, very positive experience caused GE corporate to take a hard look at Massachusetts, and to say, ‘Yeah, this is a state where we could come and continue to really transform our business.’ ”
The experience of GE Healthcare Life Sciences was among factors in GE’s January decision to move its corporate headquarters from Fairfield, CT, to Boston, spokeswoman Susan Bishop told GEN. The day of the Marlborough opening, GE filed a letter of intent with the Boston Redevelopment Authority stating its interest in building a new corporate HQ at Boston’s Fort Point.
“There is a great business ecosystem: companies, universities, startups, R&D, and a supportive policy environment. Boston attracts a diverse, technologically fluent workforce focused on solving challenges for the world,” Bishop said. “Boston offers the complete package—innovation, talent, and infrastructure—to partner with GE now and in the future.”