Despite a prolonged slump in biotech stocks, the Massachusetts life sciences boom continues, according to a report from a state trade group.
Private biotech startups raised $5.1 billion in venture capital investments in the first half of the year, creating new jobs and fueling demand for more lab space, according to the Massachusetts Biotechnology Council’s findings, which were released Tuesday.
That funding, which MassBio said already is the fourth highest annual total for the industry, comes even as a downturn has collectively wiped billions of dollars from small and medium-sized biotech firms over the past year and a half, forcing some companies to fold and many more to lay off employees.
Still, some companies say that they are having a hard time filling positions. Tellingly, MassBio’s 2022 Industry Snapshot shows that biopharma jobs grew by 13.2 percent last year, with 12,400 employees added to a total workforce of nearly 106,700. Research and development jobs grew by about 17 percent in 2021, about twice the rate as the year prior.
“It’s pretty incredible we’re still able to maintain that growth,” especially given the housing and transportation crises in the state, said Joe Boncore, MassBio’s chief executive.
The industry remains one of the most lucrative in the state. Biopharma jobs accounted for $21.5 billion in total wages for Massachusetts in 2021, with an average wage of $201,549, up 5 percent from $191,345 in 2020.
The open spigot of biotech funding and the new jobs it creates is also fueling the demand for more lab and manufacturing space, which MassBio said has expanded to 55.9 million square feet so far this year, a 40 percent increase from the 40 million square feet recorded last year.
“I know a lot of people think it’s too much, but the reality is for too long we just didn’t have enough [lab space] in Massachusetts, and that really tied the hands of companies that wanted to expand within or relocate to the Commonwealth,” Boncore said.
Even though Massachusetts saw a 15 percent increase in biomanufacturing jobs last year, the state lags behind California, North Carolina, Pennsylvania, Texas, and Florida in sheer numbers of these jobs; the number of biomanufacturing jobs in Massachusetts is below 10,000. With 1.7 million square feet of manufacturing space under construction in the state, that number is expected to increase.
But not every measure of the industry showed growth. The stock slump has dried up demand for initial public offerings, causing many private biotech startups to delay plans for going public. The dismal public financial markets have led many in the private sector to wonder if funding will stall for them as well.
So far, that isn’t happening. Although venture capital funding this year isn’t likely to match the record-smashing $13.66 billion that Massachusetts biotech firms raised in 2021, it is still outpacing the total funds raised in most other years.
“Generally, the trajectory of this industry over time is upward,” Boncore said. “We’re still in a good place, because even in pre-pandemic times, this industry was going really well. And we’re still seeing growth over pre-pandemic” levels of funding.
Multiple biotech firms raised rounds topping $400 million to $500 million last year. The biggest financing round so far this year went to Tessera Therapeutics in Cambridge, which raised $300 million in April to develop genetic medicines with its proprietary “gene writing” technology that aims to improve upon CRISPR gene editing.
Other large financing rounds this year include the Waltham startup Upstream Bio, which raised $200 million to develop a treatment for severe asthma. Affini-T Therapeutics, a startup based in Boston and Seattle, raised $175 million to design T cell therapies that target tumors with a notoriously difficult-to-treat genetic mutation. And Cambridge-based LifeMine Therapeutics raised $175 million to find drugs from fungi.
The majority of venture capital investments often go to Cambridge startups, but that’s changed so far this year, perhaps reflecting a growing interest to escape the sky-high rent prices of Kendall Square.
Cambridge-based companies reaped about 43 percent of the investments in the first half of this year, down from about 58 percent last year. About 30 percent of the investments went to Boston firms and 11 percent to Waltham firms.