Silicon Valley, Seattle, Austin and New York often come to mind when you think of the nation’s tech capitals, but the Greater Boston area steadily has built a tech hub that rivals all these cities.

Biotech is at the center of it all. The area’s biotech industry emerged about 40 years ago and today there are more than 430 biotech companies. Many of them are located in Boston and Cambridge, two cities that form the state’s biotech core.

“The Bay Area is probably the cradle of biotech in the U.S., but it’s lost its mantle to Boston,” says Dr. RJ Tesi, who moved from the San Francisco Bay Area to Boston in 2015 and is the CEO and CMO of INmune Bio, a company that develops therapies for cancer and Alzheimer’s disease.

Tesi’s statement may not be hyperbole. In 2018, Massachusetts biopharma companies surpassed more than $4.8 billion in venture capital investment, up from $900 million in 2012, according to Robert Coughlin, CEO of the Massachusetts Biotechnology Council (MassBio), an industry trade group with more than 1,200 members that span biotech and life sciences companies, research institutions and hospitals. Today, there are more than 113,000 biopharma and biotech research and development jobs and more than 30 million square feet of lab space throughout the state.

From investing in innovation to collaborative partnerships between government, academia, hospitals and the private sector, this is how Massachusetts has built, brick by brick, what some experts now call the world’s top biotech hub.

Massachusetts Biotech

Paving the way for biotech

In the medical field, biotechnology involves using biology and the life sciences in commercial applications to treat disease. It encompasses a diverse range of applications, including biological medicines, medical devices and research products.

In Massachusetts, which is home to 122 colleges and universities, the biotechnology industry emerged thanks in part to university research and a decision in the late 1970s by the Cambridge City Council to allow DNA experimentation. This paved the way for companies like Biogen, which focused on genetic engineering, to set up shop.

From that foundation, more biotech and life sciences companies came to the region, buoyed by leading research institutions like Harvard and MIT and top research hospitals, including Massachusetts General Hospital, Dana-Farber Cancer Institute and Brigham & Women’s Hospital. Today, the state is home to five of the top hospitals in the country that receive the most National Institutes of Health (NIH) funding. The city of Boston itself has received the most NIH funding for 24 consecutive years. That track record is significant because NIH is the largest public funding source of biomedical research worldwide.

Massachusetts is one of the smallest states in the country by size — a characteristic that, ironically, gives it a business advantage. The state benefits from what’s known in the biotech industry as clustering. There’s a high concentration of hospitals, leading universities and private companies in a relatively small area, which spurs collaboration and innovation. Clustering is particularly evident in Cambridge’s Kendall Square.

Kendall Square, which has been labeled “the most innovative square mile on the planet,” has 25 biotech and life sciences companies and research institutions, including Amgen, Novartis Institute for Biomedical Research and Pfizer. There’s also Mass Innovation Labs, which gives research scientists access to on-demand lab space, and the Broad Institute of MIT and Harvard, an institution that fosters collaboration between researchers from MIT, Harvard and Harvard-affiliated hospitals to advance biomedicine and solve national and global public health challenges. Last year, 78 percent of all Massachusetts biotech companies that went public were from Cambridge, a city that’s located just a few miles from Boston.

“What makes Boston different is that there’s this incredible stew that’s highly concentrated within 25 miles of downtown,” Tesi says.

Proximity may give Massachusetts an advantage, but government and other local organizations also have helped the state emerge as a biotech hub.

MassBio Edge, MassBio’s purchasing consortium, pools the buying power of its member companies to purchase goods and services, such as lab supplies, office supplies, bulk gas and compress gas, that the state’s biotech and life sciences companies need to do innovative work and develop new therapies, Coughlin says.

“We can use the buying power of our collective membership to make sure that our smallest companies are getting competitive pricing for these goods and services just as our largest companies are. That way, they can extend their capital and put their money towards science under the microscope,” he says.

The state also has 31 biotech and life sciences incubators. The Massachusetts Life Sciences Center (MLSC), an economic development and investment agency, has invested more than $700 million in the industry over the last 12 years via grants, loans, tax credits and workforce training and development programs. One of MLSC’s marquee programs is its Seed Fund, which invests up to $250,000 in convertible notes in emerging life sciences companies.

Much of MLSC’s investment is the result of state government efforts. In 2008, Massachusetts launched an initiative to invest $1 billion over 10 years in the life sciences sector. As of June 2018, the state had invested or committed around $650 million. Last year, Governor Charlie Baker renewed the initiative and signed an act committing up to $623 million in bonds and tax credits over five years to drive education, research and development and workforce training in the life sciences industry.

The initiative “enabled us to recruit so many of these large companies that got us through the economic downturn,” Coughlin says. “It continues to work. The key differentiator between Massachusetts and any other state in the U.S. and any other country in the world is that government has been our partner.”

“With government, industry and academia working together, there is not a problem that you cannot solve,” Coughlin adds. “Curing diseases and investing in new therapies is so difficult that if you don’t have the best climate to do that, you can’t succeed.”

Massachusetts Biotech

Putting talent at the center

Though clustering and collaboration with government have helped the state’s biotech industry grow, most business leaders say what drives the industry is one of Massachusetts’ greatest natural resources — talent.

The state’s high density of colleges and universities creates an enviable talent pipeline, one that remains strong even as low unemployment creates more competition for talent.

“How did this Massachusetts miracle happen in the life sciences? We decided we were going to play to our strengths,” Coughlin says.

That positioning has helped to attract companies like Bristol-Myers Squibb, Merck, Sanofi Genzyme (in fact, 18 of the top 20 pharmaceutical companies have a presence in the state, Coughlin says). It’s also lured healthcare IT startups and growing companies that partner with the biotech industry, like Biofourmis.

Biofourmis, whose clients include Massachusetts General Hospital and Brigham & Women’s, augments personalized patient care and therapies with digital therapeutics and remote monitoring to improve care management for people with complex chronic conditions. It partners with pharmaceutical companies and has built a pipeline of possible new therapies for conditions like heart failure, asthma and multiple sclerosis.

Kuldeep Singh Rajput, an MIT grad who is Biofourmis’s founder and CEO, recently moved the company’s headquarters from Singapore to Boston, where Biofourmis bases its operations out of WeWork’s downtown location on Arch Street (To meet growing demand in the area, WeWork has 15 locations in Boston). Singh Rajput said he decided to move the company here for several reasons — access to talent was one of the biggest draws.

“The East Coast has some of the largest and most prominent health systems in the country. Having access to these health systems, along with the right clinical and regulatory talent and data scientists that have good clinical experience — all of these things combined together make it a compelling place to have a digital health or biotech company,” he says.

Silicon Valley, San Diego and New York have thriving tech ecosystems, too, but Singh Rajput says there’s a key difference when it comes to talent in these places compared to the Boston area.

“Silicon Valley has data scientists, but it’s very consumer-driven,” he says, adding that having people with a combination of technical skills and clinical expertise was crucial for his company. Since it relocated to Boston, Biofourmis has hired 20 people. The company plans to grow its U.S. team to 120 by the end of the year, with more than 35 employees in Boston.

Companies can go through the normal process to find and recruit talent, but the state’s biotech ecosystem also streamlines this process. Local events like MassBio’s partnering days connect larger companies to talent. With partnering days, big pharma companies can establish relationships with early-stage companies, entrepreneurs, clinical scientists and tech transfer professionals (those who work in government, academia and research institutions and want to transfer their knowledge and skills to the corporate world). These connections ultimately lay the groundwork for future innovation and often result in strategic partnerships, investments and licensing deals for biotech and life sciences startups.

However, Massachusetts will have to balance growing the industry with urban sprawl and building an infrastructure that can sustain biotech and all the talented professionals it attracts. Expensive rents make the cost of doing business more expensive for biotech companies that want to base themselves in Boston and Cambridge. Public transportation needs improvement to solve traffic congestion. Massachusetts ranks near the bottom — 47th nationally, to be exact — for commuting times and road quality. Earlier this year, Boston was awarded the dubious distinction of having the worst rush-hour traffic in the country. This particular challenge is so pressing that the Kendall Square Association, a business organization in Cambridge, issued a call to action in late 2018.

“The future of innovation is at stake. Our workforce should be focused on nanotechnology breakthroughs, improving the internet, and finding cures for rare diseases — not on dreading their commutes. Bottom line: you can’t find the cure for cancer while sitting in traffic,” the organization said.

But even as the area takes steps to address these challenges, companies will continue to innovate. Biotech is big business in Massachusetts, but at its core, the industry is about treating disease and finding ways to make people healthier — two things with a global impact that extend far beyond the state’s borders.

“I came to the industry and left government because I have a son with cystic fibrosis,” Coughlin of MassBio says. “For me, to follow how science has advanced in the treatment of cystic fibrosis, that’s just one small piece of what’s happening here.”

“When you look at the science that’s been tested for decades — all the way back to the 1970s here in Massachusetts — it’s amazing how much things have changed. We use the word cure now for the first time. When I started here at MassBio, just over a decade ago, I was told that using the word cure offered false hope to patients. But now we have cures. Look at personalized medicine and how it’s transforming patient care with things like immuno-oncology and gene and cell therapies. Think of the unmet medical needs these technologies are solving. It’s truly amazing.”

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