Business & Tech

Boston will be the hub of the biotech universe starting Monday

More than 16,000 people from 74 countries will be in Boston for the 2018 BIO gathering.
Jonathan Wiggs/Globe Staff
More than 16,000 people from 74 countries will be in Boston for the 2018 BIO gathering.

When more than 16,000 people from 74 countries descend on Boston for the annual Biotechnology Innovation Organization convention that starts Monday, they will find a Massachusetts biotech scene that’s more robust than the one in 2012 when the city last hosted the event. And, yes, the state relishes its renown as the life sciences hub of the universe.

The Massachusetts cluster employs thousands more people than it did six years ago and occupies millions more square feet of laboratory space. Since 2012, there have been over 60 new publicly traded local firms, as well as more divisions of multinational drug-maker giants. The biotech sector has launched novel medicines for diseases once thought hopeless, including a drug for spinal muscular atrophy, the leading genetic cause of death in infants.

“We’ve seen advances in science that are beyond all expectations, as it relates to therapies that can change the course of disease and, in some cases, cure disease,” said Robert Coughlin, president and chief executive of the Massachusetts Biotechnology Council trade group, whose 16-year-old son, Bobby, has a rare condition, cystic fibrosis.

Advertisement

Yet, for all its growth, the sector is still grappling with challenges that were evident in 2012. They include a lack of diversity in the work force and the inability of some patients to actually get the most innovative drugs, which sometimes carry breathtaking annual price tags of six figures per person.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

Biopharma was certainly a jewel in the state’s crown when BIO, the largest biotech trade group in the world, last met at the Boston Convention & Exhibition Center.

Massachusetts drugmakers attracted nearly $1 billion in investment from venture capitalists that year. Boston’s world-class hospitals, universities, and research centers — which nurture the biotech industry — pocketed $1.78 billion in National Institutes of Health grants, more than any other city in the nation.

The sector had also spent $300 million in grants, loans, and tax breaks provided by the state in the prior five years, at the urging of then-governor Deval Patrick.

But biopharma was still emerging from the Great Recession and IPOs had slowed. Venture capital investment in biotechs was actually down from 2011, when it had totaled about $1.2 billion, according a recent report by MassBio.

Advertisement

Jason Rhodes, a partner at the Cambridge venture capital firm Atlas Venture, which has bankrolled local biotech startups such as Alnylam Pharmaceuticals, said he sensed at the time that the sector was about to surge again.

“I think you could kind of smell it — the permafrost was thawing and green shoots were coming up,” he said.

Today, the sector is indeed booming, growing at roughly double the rate of the US and state economy over the past four years.

For the first time, the number of employees in the life sciences in the state has crossed 70,000, according to a recent report by the Massachusetts Biotechnology Education Foundation.

Half of those jobs — 34,366, to be exact — were in research and development in 2016, more than any state and slightly ahead of California, which ranks second, according to MassBio.

Advertisement

Investment has also soared. Biopharma attracted $2.9 billion in venture capital in 2016, more than triple the $900 million it received in 2012, says MassBio.

“It’s been a spectacular six years,” said Alexis Borisy, a partner in Third Rock Ventures, a Boston venture capital firm that began operating in 2007.

Consider this: Third Rock had yet to take a biotech public when BIO last convened in Boston. Since then, Borisy’s firm has taken 16 companies public, including Bluebird Bio, which is working on gene therapy to treat rare diseases, and Agios Pharmaceuticals Inc., which focuses on medicines to stimulate the body’s immune response against cancer cells.

Less than a year ago, Agios won approval of its first medicine, Idhifa. It is the first drug approved by the Food and Drug Administration for acute myeloid leukemia in adults with a particular genetic mutation who suffer relapses despite other treatments.

“That’s the most important metric of success,” Borisy of the drug’s approval. “The whole point of biotech is to take innovation in science and medicine and to bring it to patients.’’

Signs of the white-hot life sciences industry are impossible to miss when you walk around Cambridge’s Kendall Square, ground zero for the Massachusetts cluster.

Once the site of old industrial buildings, the neighborhood features gleaming new office buildings, such as one on Binney Street that will soon house Bristol-Myers Squibb’s new research and development site and several smaller biotechs.

Like several other pharmaceutical giants, Bristol-Myers Squibb decided to put its research scientists in what a spokeswoman called “the heart of a vibrant ecosystem of world-class science, innovation, and business opportunities.” It will house about 300 employees, some from elsewhere in the state, and others from outside Massachusetts, or new hires.

Cranes in the sky nearby attest to other commercial and residential constructions projects underway that cater to people in the drug-making industry.

LabCentral, a coworking biotechnology space that opened on Main Street in Kendall Square in late 2013, has repeatedly expanded and now houses 55 startup companies in about 105,000 square feet across its two-building campus. LabCentral is among about two dozen incubators that have opened throughout the state.

Today, Big Pharma companies domestic and foreign consider it almost imperative to have a presence in Massachusetts, and often in Cambridge. Among the giant companies that have increased their presence in the state in recent years — either by moving or expanding divisions here or by buying Massachusetts-based biotechs — are Merck & Co., Pfizer Inc., Novartis AG, Sanofi SA, and Amgen Inc.

Just last month, Japanese drugmaker Takeda Pharmaceuticals Inc. finalized a $62 billion agreement to buy Shire PLC, which has its headquarters in Ireland but is the second-biggest biotech employer in Massachusetts. Shire, which has most of its operations in Lexington, makes the ADHD drug Adderall and focuses on developing medicines for rare diseases.

Drug companies are changing the landscape of Boston, as well. One of the most prominent features of Boston’s Innovation District on the South Boston Waterfront is the relatively new headquarters of Vertex Pharmaceuticals Inc. The drugmaker moved its headquarters from Cambridge to a 1.1 million-square-foot complex there in 2014.

Given the catalyzing effect biopharma has had in Massachusetts, it’s no wonder that a slew of cities, states, and countries are sending contingents to BIO to encourage drugmakers to set up shop there.

They include places that are less than obvious, like Henderson, Nev. Part of the Las Vegas metropolitan area, Henderson has fewer than 1,000 employees in the life sciences. But economic development officials tout its proximity to hospitals and the presence of a few biopharma firms.

“San Diego, Boston, the Bay Area — they have very strong clusters, and they go back decades,” said Barbra Coffee, director of economic development for Henderson. “Our goal is to head down that same path.”

But the road to biopharma success isn’t always smooth, even in Massachusetts.

For one thing, not everyone who wants the cutting-edge drugs made by biotechs can get them, largely because the medicines are so expensive.

Spinraza, the new Biogen Inc. drug to treat the deadly neurodegenerative disease spinal muscular atrophy, was approved in December 2016 after it proved remarkably effective, particularly in infants with the severest form of the condition.

But because Spinraza costs $750,000 per patient in the first year and $375,000 every year after, some insurers balked at covering it for some patients, and those people struggled to get the medicine. Other drugs developed by local biotechs also carry price tags that have strained the health care system.

Biotech in Massachusetts has also drawn criticism for a lack of women and people of color, particularly in leadership positions.

Women enter the industry in roughly equal numbers to men and aspire to be in the corner office or serve as a board director at similar rates to men, according to a study released by MassBio in September. But few women make it to the top. Only 1 in 4 “c-suite” executives is a woman, and only 1 in 10 board members.

There are similar concerns about race and ethnicity. About 60 percent of biotechs that responded to a recent survey by the Massachusetts Biotechnology Education Foundation said their companies have no formal diversity initiatives.

It’s baffling that an industry that draws so many well-educated people who are trained to challenge convention fails to make more women and minorities leaders, said Amy Schulman, a partner in the venture capital firm Polaris Partners and CEO of the Watertown-based startup Lyndra Inc. That needs to change, said Schulman, who plans to discuss the problem at a conference session.

“Study after study shows that when you have diverse people — people with different perspectives, styles, genders, ethnicities and orientations — then you have better conversations that translate into better outcomes,” she said. “It’s really important.”

Jonathan Saltzman can be reached at jsaltzman@globe.com