Surges in R&D jobs and venture capital (VC) investment kept Massachusetts’ top-tier biopharma cluster growing last year, according to the latest edition of the annual report from the state’s life sciences industry group.
The Bay State’s biopharma workforce grew 6.2% last year to a total 74,256 jobs, up from 69,941 in 2017, the Massachusetts Biotechnology Council (MassBio) reported in its 2019 Industry Snapshot, released August 27 and produced in partnership with Evaluate.
The 2018 total represents a 35% increase in Massachusetts biopharma jobs from the 54,829 reported in 2008, MassBio said.
Takeda Pharmaceutical overtook Sanofi last year to become Massachusetts’ largest biopharma employer, MassBio reported, with 4,927 employees to Sanofi’s 4,800. However, Takeda’s workforce is actually 2.4% smaller than the combined 5,050 employees reported by MassBio in its 2018 Industry Snapshot for Takeda and Shire—which Takeda acquired for £62 million ($56 billion) in a deal completed January 8—while the size of Sanofi’s workforce remained unchanged year-over-year.
MassBio’s figures for the state’s largest biopharma employers come from membership reports and surveys, as well as the Boston Business Journal’s Book of Lists 2018.
More than half of Massachusetts’ biopharma jobs (53%) are in biotech R&D, which last year rose to 39,365 jobs, up 10% from 35,768 in 2017, the report stated. Massachusetts has added 12,606 biotech R&D jobs in the 10 years since 2009, up 47% from 26,759 jobs that year.
California retains R&D job lead
However, Massachusetts’ 10-year growth in biotech R&D jobs was less than half that of California, which produced 23,415 such jobs between 2009 and 2018, up 110%. Year-over-year, California saw its R&D job growth rise 14% year-over-year, to 44,751 jobs last year— remaining the nation’s top state for biopharma R&D jobs by keeping the R&D job lead over Massachusetts that the Golden State attained in 2017.
Rounding out the top five states in biotech R&D jobs last year were Pennsylvania (15,099, up 13% from 2017), New Jersey (14,822, up 14% from 2017), and North Carolina (10,468, up 22% from 2017).
Of nine U.S. states whose job figures were listed in the report, California is one of three that more-than-doubled its number of biotech R&D jobs between 2009–2018. Washington state showed the largest increase, a near-tripling of biotech R&D jobs that catapulted the Evergreen State to 7,962 jobs from 2,737. Next-highest was New York state, which zoomed to 9,680 jobs last year from 3,706 in 2009.
Year-over-year, Washington state showed an 11% increase in biotech R&D jobs from 7,149 in 2017, while New York state rose 9% from 8,856.
Massachusetts’ biopharma industry is anchored by the Boston/Cambridge, MA, regional cluster, which topped GEN’s A-List of Top 10 U.S. Biopharma Clusters last year; an updated list will be published this fall. 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.
6% growth in manufacturing jobs
That manufacturing base consisted last year of 10,148 biopharma manufacturing jobs, up 0.8% from 10,072 in 2017. Over the past decade, the state’s biopharma manufacturing job base grew by 5.9%, rising from 9,581 in 2009—compared with a 1% increase in the United States as a whole during 2009–2018.
Massachusetts’ biopharma manufacturing workforce remained the nation’s 10th largest, with California continuing its distinction of having the nation’s largest biopharma manufacturing workforce with 46,693 jobs in 2018—a 10.4% year-over-year decline from 52,125 in 2017.
However, during the decade ending last year, California saw biomanufacturing employment rise 9% from 43,035 jobs in 2009—a rate of growth that lagged behind those of Illinois (10%, to 20,297 jobs in 2018), North Carolina (16%, to 21,705 jobs), and fastest-growing Texas (24%, to 12,494 jobs).
Job data cited by MassBio comes from both the U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW), and data from privately-owned companies.
According to the report, Massachusetts rode the proverbial wave of last year’s historically high initial public offering (IPO) surge. During 2018, 18 Massachusetts companies represented 31% of all U.S.-based biotech IPOs went public, of which 14 (78%) were launched by companies located in Cambridge, MA. The 18 companies raised a total $2.46 billion—of which nearly one-quarter came from a single IPO, the largest such offering of 2018: Moderna’s $604.3 million offering in December.
During the first six months of 2019, MassBio added, nine Massachusetts biotech companies have carried out IPOs, representing 35% of all U.S.-based biotech IPOs. The nine companies raised a combined $808 million.
Record-high VC investment
Massachusetts fared even better in venture capital (VC) investment, recording another record-high of investment with $4.8 billion, compared with $3.1 billion recorded for 2017.
Of the $4.8 billion in 2018 VC investment, more than one-quarter (26%) came from three nine-figure deals: Moderna’s pre-IPO $500 million in equity financing, completed in February 2018; Relay Therapeutics’ $400 million in Series C financing; and Cerevel Therapeutics’ $350 million in launch capital from funds affiliated with Bain Capital Private Equity and Bain Capital Life Sciences.
Cerevel was launched by Bain Capital and Pfizer, which contributed a portfolio of three clinical-stage and “several” preclinical neuroscience compounds.
However, during the first half of this year, Massachusetts has failed to sustain that torrid pace of VC activity, with $1.5 billion invested between January–June 2019. Of 11 VC financings between January–June 2019, only one exceeded $100 million—Beam Therapeutics’ $135 million in Series B financing, completed in March.
“The Massachusetts biopharma industry continues to grow and innovate at an incredible rate, creating both challenges and opportunities for companies who must fill their pipeline of talent to meet the increasing demands on their services,” Robert K. Coughlin, president & CEO of MassBio, said in a statement.
“We’re focused on efforts to support both the infrastructure needs of the Commonwealth in terms of employee housing and transportation, and also creative ways to ensure that a diversity of companies, from small startups to established biotechs, have the investments and resources they need to sustain this growth,” Coughlin added.