Big3Bio Regions Dominate GEN’s Top 10 U.S. Biopharma Clusters of 2017

SAN FRANCISCO – (June 5, 2017) – Genetic Engineering & Biotechnology News (GEN) has again put out its annual Top Biopharma Clusters list, and again, the “Big 3” are leaders on the list. This year, Boston repeats its #1 position, the Bay Area is next at #2, while San Diego comes in at #4 on their list.

GEN ranks regions based on five criteria:

  • NIH funding—Taken from the publicly available NIH RePORT database, for the current federal fiscal year, from its start on October 1, 2016, through May 23, 2017.
  • Venture Capital (VC) funding—Taken from 2016 and Q1 2017 figures furnished by the publicly available MoneyTree Report.
  • Patents—Based on the number of patents containing the word “biotechnology” awarded since 1976 in namesake cities and suburbs where key companies are located.
  • Lab space—Based on total-size-of-market figures, in millions of square feet, furnished by the commercial real estate brokerage JLL in its U.S. Life Sciences Outlook report for 2016.
  • Jobs—Based on JLL’s report. While job numbers are ranked this year compared with last year’s Top 10 US Clusters list, less weight had to be given to job totals in regions where GEN has found widespread discrepancies in job figures. However, workforce size was factored in when deciding the ultimate position of a region.

The “Big 3” went as follows:

#4. San Diego

“America’s Finest City” will be the center of the biopharma industry in June, when the Biotechnology Innovation Organization holds its annual BIO International Convention at the San Diego Convention Center, expected to draw 16,000 attendees. The “Plymouth of the West” and vicinity remain third in VC funding with 28 deals totaling $650 million last year. Nearly one-third of that total came from a single deal, the “in excess of” $220 million Series B financing of Human Longevity Inc. HLI and its executive chairman J. Craig Venter, Ph.D., who stepped down as CEO earlier this year, are among anchors of the region’s cluster-within-a-cluster focused on genomics, which according to the San Diego Regional Economic Development Corporation encompasses some 100 of the 1,200-plus companies and institutions. Another anchor, Illumina, in January opened the $40 million, 293,000-square-foot “Building 6” manufacturing facility, built for the sequencing giant by Alexandria Real Estate Equities.

Illumina’s roughly 3,000 employees help made the region fifth in jobs (63,730 according to JLL, compared with 49,763 counted by Biocom). The region ranks fourth in lab space (11.9 million square feet plus 1.1 million square feet under construction) and third in patents (4,383), but seventh in NIH funding (741 awards totaling $352.9 million).”

#2. San Francisco Bay Area

“The Bay Area leads the nation in patents (10,312), and is close behind Boston/Cambridge in lab space with 19.3 million square feet. The lab market may be peaking; developer Oyster Point Development in January halved the lab R&D space it proposes to build at The Landing at Oyster Point in South San Francisco, from the 2.25 million square feet submitted to City officials last year, to 1 million square feet, replacing the lab space with 1,191 residential units. However, on May 4, the “Birthplace of Biotechnology” saw another developer, BioMed Realty, break ground on the first phase of Gateway of Pacific, a 1.3 million square foot lab-office campus.

In VC funding, the Bay Area finished 2016 second with $2.2 billion in 80 deals, and narrowly edged Boston/Cambridge in Q1 2017 with $1.435 billion in 20 deals. The region finished third in NIH funding (1,283 awards totaling about $520.6 million), and fourth in jobs with 67,738 according to JLL, though the California Life Sciences Association offers a slightly higher count of 68,313 as of 2015. That number can be expected to grow in coming months, with Juno Therapeutics in April confirming plans for a Bay Area office, saying it “puts us in the best position to continue to hire world-class talent.” Not all the region’s job news has been good; OncoMed halved its workforce in April.”

#1. Boston-Cambridge

“A decade after then-Gov. Deval Patrick (D) enacted the Massachusetts Life Sciences Initiative, his successor has yet to announce what support the state will offer the industry when the $1 billion, ten-year measure expires next year. However, Gov. Charlie Baker (R) has committed the state to growing life sciences companies through workforce development programs and funding for drug R&D. Supporting biopharma is also the goal of the region’s incubators and accelerators—including the first Chinese-owned bioincubator, the Qilu Boston Innovation Center (QBIC), which opened May 19. QBIC was founded by Qilu Pharmaceuticals, a $2 billion-a-year Chinese drug developer that opened within the incubator its first branch company, cancer immunotherapy developer QLB Biotherapeutics.

Not surprisingly, the region leads the nation in NIH funding (2,169 awards totaling nearly $1.055 billion), lab space (19.9 million square feet), and 2016 VC funding (78 deals totaling $3.06 billion), though Boston/Cambridge finished second to the San Francisco Bay Area in Q1 with 19 deals totaling $534 million. Biopharma growth is fueling a wave of speculative lab space development in and around Boston and Cambridge; King Street Properties, for example, is building the $200 million, 145,000-square-foot 828 Winter Street adjacent to an existing lab building owned by the developer, and slated for completion in 2018. The region is also second in patents (6,496), but third in jobs with 86,235 according to JLL, though industry group Massachusetts Biotechnology Council (MassBio) reported 63,026 last year.”

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