More than 15,000 people arriving in Boston for the Biotechnology Industry Organization convention opening Monday will see a Massachusetts life sciences sector that has grown and changed noticeably since the city last played host to BIO in 2007.
Big drug companies, aka Big Pharma, have claimed a larger role, adding the resources of global giants to a home-grown biomedical cluster that already included over a dozen teaching hospitals, one of the nation’s largest concentrations of venture capital firms, and about 500 biotech companies working on a pipeline of approximately 900 medicines, according to figures set to be released at BIO this week by the PricewaterhouseCoopers accounting and consulting firm.
There have also been continued consolidation, an accelerated push toward personalized medicine, and a shift to a collaborative business model where drug companies strike partnerships and research alliances with biotechs and academic labs, sharing the costs and risks of bringing new therapies to market.
Like the broader sector, the Massachusetts industry was blindsided by the economic downturn but still managed to add companies and jobs over the past five years, thanks in part to $300 million in grants, loans, and tax breaks extended by the Patrick administration.
“Everyone has had to cut back and to share in the economic challenges,” said Susan R. Windham-Bannister, president of the Massachusetts Life Sciences Center, which runs the state’s 10-year, $1 billion life sciences initiative. “But we have been willing to stay the course.”
Indeed, industry watchers say Massachusetts may have strengthened its position against rival life sciences centers during the slump by continuing to win outsized shares of federal research dollars and the venture capital funds that bankroll medical technology start-ups.
A Boston Redevelopment Authority report to be released this week will show the city drew more National Institutes of Health grants in 2011 than any other US city for the 17th straight year.
Boston hospitals and research institutes pocketed $1.7 billion in NIH grants last year, bringing their total to $23.4 billion over the 17 years, according to the city, though last year’s haul was down from $2.1 billion in 2010 when grants were bolstered by stimulus funds.
The largest hospital grants this year, as in past years, went to a pair of Harvard-affiliated medical centers owned by Partners HealthCare System: Massachusetts General Hospital won $343.8 million in grants, while its sister Brigham and Women’s Hospital collected grants totaling $287.2 million. Harvard Medical School itself received grants totaling $200.4 million.
Venture funding to New England companies, mostly in Massachusetts, climbed 23 percent last year to $3.2 billion, led by investments in biotechnology and medical device start-ups, according to the Moneytree survey published by PricewaterhouseCoopers and two partners. From the start of 2009 through March 2012, nearly 25 percent of the $13.1 billion invested in the US biotechnology sector went to companies in New England, according to PricewaterhouseCoopers.
“We’re still getting our disproportionate fair share of NIH funding and venture capital,” quipped Jim Connolly, a Boston-based partner who leads the US pharmaceutical and life sciences practice for PricewaterhouseCoopers. “The money goes where the talent is.”
But with federal budget cuts on the horizon, and some private investors worried about the slow pace of regulatory reviews of new drug candidates and medical devices, Massachusetts and Boston officials have begun talking about steps they can take to assure the flow of funds.
“One of my concerns is where we go in the future,” said Boston Mayor Thomas M. Menino. “We know the NIH grants drive our economy. All budgets are down, but this NIH budget is too important for us. We need to show Congress the money is being put to good use.”
Pharmaceutical companies, some of which entered the Boston market by acquiring biotechs but have continued to expand, have begun to invest their own money or join with venture investors in financing medical technology start-ups.
One example is Sanofi SA, the French drug maker that last year paid $20.1 million to buy Cambridge’s Genzyme Corp. Now it is co-investing with Boston venture capital firm Third Rock Ventures in Warp Drive Bio, a Cambridge start-up developing technology that will enable it to make drugs from microbes found in plant extracts.
While companies like Genzyme and Millennium Pharmaceuticals are no longer independent, they remain major players in the Massachusetts sector under their overseas owners.
Meanwhile, established Bay State biotechnology stalwarts such as Biogen Idec Inc. of Weston and Vertex Pharmaceuticals Inc. of Cambridge continue to move drug candidates through their pipelines. Biogen, best known for its multiple sclerosis drugs, is now working on treatments for conditions ranging from hemophilia to Alzheimer’s disease. After two decades of development, Vertex has introduced new drugs combating hepatitis C and cystic fibrosis in the past year.
And a new crop of rising stars, among them Cubist Pharmaceuticals Inc. of Lexington, Ariad Pharmaceuticals Inc. of Cambridge, and Ironwood Pharmaceuticals Inc. of Cambridge, are moving experimental treatments for a range of diseases toward commercialization. They include a new Cubist drug to fight bacterial infections, an Ariad therapy for sarcomas, and an Ironwood treatment for irritable bowel syndrome.
Visitors to BIO, which will be held at the Boston Convention & Exhibition Center, will get a chance to tour the new Innovation District taking root nearby on the South Boston Waterfront where Vertex is building a new headquarters, as well as the cluster of research hospitals in the Longwood Medical Area and the BioSquare cluster in the South End.
Most important, perhaps, will be the thousands of one-on-one business meetings where start-ups can forge partnerships with larger companies and states can woo new businesses.
“Just as a company needs a pipeline of drugs, Massachusetts needs a pipeline of companies,” said Connolly. “This is a marketplace that’s still innovating and still producing new medicines.”