Despite layoffs and funding cuts last year, Massachusetts’ biopharmaceutical industry added 3,000 net new jobs in 2023, according to a new report released Tuesday by MassBio.
The biotech trade group’s annual Industry Snapshot report examines the growth of the state’s life sciences industry across many dimensions, including employment, funding, drug development and other metrics.
The biopharmaceutical sector employs nearly 117,000 people, representing just 3.7% of the state’s total workforce, but the industry’s job growth accounted for nearly 17% of Massachusetts’ job growth in 2023, according to the report.
Much of this job growth is due to research and development, which MassBio spokesman Ben Bradford says is the state’s “bread and butter.”
“We remain the best place in the world for research and development, particularly for the early-stage innovations that come out of our hospitals, colleges, universities and research institutes. That’s why the big pharmaceutical companies are here,” Bradford said.
He added that while most of these major pharmaceutical companies are not headquartered in Massachusetts, 18 of the top 20 companies are located in the state.
Bradford said about 2,000 of the net new jobs created in the biopharmaceutical industry were in research and development. The state is also a major leader in therapeutics, representing 15 percent of U.S. and 6.4 percent of global drug development.
At the same time, biomanufacturing jobs declined by about 2% statewide, although there was growth in some parts of the state. In particular, Worcester County saw a nearly 12% increase in biomanufacturing jobs, according to the report. Efforts are underway to promote life sciences, including biomanufacturing, in the region, and the state is making recent investments.
The job growth in the state’s biopharmaceutical sector comes despite layoffs at several companies last year. And more layoffs are on the way, with industry giant Takeda Pharmaceuticals recently announcing plans to lay off hundreds of employees in the state.
Another area to watch is venture capital funding. So far, Massachusetts-based companies have received $3.26 billion in venture capital in the first half of 2024, That’s a 12.6% drop from the same period last year, the report said. Bradford said funding is critical to helping cutting-edge innovations mature.
“Without this very early-stage funding, we might not see as many companies growing as quickly,” he said.
Venture capital funding reached record levels during the pandemic – putting the industry in the spotlight and sending a host of investors searching for the next big thing. Local companies received $8 billion in 2020, around $13 billion in 2021 and nearly $9 billion in 2022.
“2020 and 2021 were really hot,” Bradford said. “And how can you blame investors for looking for the next Moderna, which went from a very small company to a global household name overnight?”
Still, Bradford said, “This doesn’t happen every day.” He believes there is a reboot in venture capital funding and “we are returning to normal.”
Interestingly, the majority of venture capital funds invested so far this year are benefiting cities and towns outside of Cambridge, the state’s life sciences hub. According to the report, 65% of venture capital funds have been invested in companies outside of Cambridge – including in Waltham, Watertown and Framingham. That’s up from 55% in the first half of 2023, the report said.
This “tremendous” distribution of funds shows that the biopharma industry “has the ability to support many different microclusters across the Commonwealth,” Bradford said.
This article was originally published on WBUR.org.
