Pharmaceutical giant Eli Lilly & Co. said Tuesday that it will invest $700 million to create a genetic medicine research center in a 12-story building under construction along Fort Point Channel that General Electric Co. once hoped would become part of its corporate headquarters.
Lilly, the 146-year-old Indianapolis-based maker of such well-known drugs as Prozac, said the Lilly Institute for Genetic Medicine on Necco Street will be finished in 2024. The company will move its current modest Massachusetts workforce of 120 scientists from Kendall Square to the 334,000-square-foot laboratory and office building, and expects to add another 130 employees.
In addition to housing Lilly employees, the building will include biotech space that other companies can use, modeled after Lilly’s Gateway Labs in San Francisco. The space will create “opportunities for collaboration” with Lilly scientists and could house an additional 150 workers, the company said.
Andrew C. Adams, Lilly’s vice president of genetic medicine who will be co-director of the new institute, said it will focus on developing RNA-based medicines, gene therapies, and other treatments that address the root cause of diseases. RNA drugs use ribonucleic acid to turn genes on and off in the treatment of disease. Gene therapies replace defective genes with healthy ones to help fight illnesses.
“Boston is probably the world’s center as far as RNA and DNA research goes,” Adams said. “Now is likely the right time for Lilly to invest here to capture that talent.”
The region has long been touted as among the world’s most attractive life science hubs, with the Seaport neighborhood rapidly becoming the region’s second-largest cluster of labs behind Kendall Square.
Record-breaking investment from venture capital and other sources into the life sciences industry has fueled a near-ceaseless demand for lab space to house biotech companies, a trend that grew throughout the pandemic. About 9.4 million square feet of life science space is under construction in Greater Boston, with another 52.3 million proposed, according to research from brokerage Colliers International. Boston’s office market, comparatively, has just over 3.1 million square feet under construction, with an additional 1.4 million square feet under construction in Cambridge and the suburbs, Colliers data show.
Adams said Lilly went through a “rigorous process” when searching for a home for the genetic medicine institute. The Seaport property now puts the company in close proximity to both talent and potential collaborators, Adams said.
“A lot of the type of companies Lilly wants to work with as partners are really expanding in that Seaport area,” he said.
Lilly has made several forays into genetic medicine in recent years. In December, it spent $380 million to form a partnership with Foghorn Therapeutics, a Cambridge biotech focused on genetic treatments for cancer. In 2020, Lilly spent about $1 billion on the New York City gene therapy firm Prevail Therapeutics.
And in 2018, it paid Lexington-based Dicerna Pharmaceuticals $100 million and invested another $100 million in the company’s research and development. Dicerna was working on medicines that rely on RNA interference, a Nobel Prize-winning technology that drug makers hope to use to turn off disease-causing genes. Dicerna is now owned by Danish drug firm Norvo Nordisk, which acquired it in December for $3.3 billion.
In tandem with its latest plans in Massachusetts, Lilly expects to expand the New York City headquarters of Prevail, which has become a hub for gene therapy research, to employ about 200 scientists.
With 250 employees in Massachusetts, Lilly would not be among the top 20 biopharma employers in the state by head count. The biggest is Takeda Pharmaceutical, which is based in Japan and has 6,750 workers, according to a 2021 report by the Massachusetts Biotechnology Council trade group. The 20th-biggest is AstraZeneca, the British-Swedish company, with 500 employees.
Messenger RNA coronavirus vaccines by Pfizer and Moderna have introduced genetic medicine to the public on a wide scale. But Adams said the Lilly institute doesn’t expect to work on vaccines. Rather, it will concentrate on drugs similar to those pioneered by the Cambridge biotech Alnylam Pharmaceuticals.
In 2018, Alnylam won the first approval ever of a medicine that uses RNA interference to “silence” disease-causing genes. The drug, called Onpattro, treated a rare hereditary disease. Alnylam has since won approval for three other RNAi drugs, all but one for rare inherited diseases.
Lilly has been working on experimental drugs to treat such conditions as Alzheimer’s and Parkinson’s, and hopes the new institute can help, according to Adams. The biggest challenge is to devise technologies that can effectively deliver genetic medicines to different organs, including the brain and pancreas.
“Delivery, delivery, delivery are the top three priorities we have in my group” of scientists, he said.
When GE moved its corporate headquarters to Boston from Connecticut in 2016, it planned to renovate two historic Necco candy factories into one building and build a flashy second headquarters from the ground up. When announcing GE’s commitment to Boston, then-chief executive Jeff Immelt joked that he wished the GE logo at the headquarters could be seen from outer space.
But the legendary corporation soon went into a tailspin, and new CEO Larry Culp did not see a need for a second building. GE eventually sold the site to Alexandria Real Estate Equities — among the largest developers of lab space in the region — and Newton-based National Development for $252 million, and also reimbursed the state $87 million in incentives it had received as part of the state’s effort to lure GE from Connecticut.
Alexandria and National later pitched building a lab complex at 15 Necco St.
It’s not clear what kind of public access to the waterfront Alexandria, National, or Lilly intend to create. State regulations call for buildings constructed on waterfront property to have some type of public access or public benefit. GE, for example, expanded the Harborwalk outside its headquarters. State officials are reviewing the developers’ plans and have requested more information, a representative from the department of environmental protection said.
Alexandria is rapidly expanding its local footprint in Boston outside of its Cambridge stronghold, and has plans for additional lab development in South Boston. Peter Moglia, Alexandria’s co-CEO, said in a statement that 15 Necco St. is “designed to be a unique and inspiring facility.”
“We are thrilled to bring an anchor tenant to this unparalleled location in the Seaport, where we are pioneering a new life science submarket,” Moglia said.
Indeed, the stretch of former Gillette parking lots fronting the Fort Point Channel leading toward the Broadway MBTA station in South Boston has been of intense interest to developers in recent years. Another major developer, Related Beal, is pitching a multi-building lab, office, and residential complex on 6.5 acres between 15 Necco St. and Gillette’s headquarters.