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Aug. 26 — Massachusetts biotechnology startups have experienced a surge in seed-stage funding in 2016, a Massachusetts Biotechnology Council (MassBIO) report said.
Massachusetts biotechnology startups received $300 million in seed funding through the second quarter, compared to $150 million for all of 2015, the report said. Seed-stage funding is the initial funding sought by a biotech venture engaged in research and development.
The strong increase in biotech investing is unique to the state. “The large surge in recent seed funding appears to be unique to the Massachusetts biotech industry and isn’t a trend across other industries in Massachusetts or across the biotech industry nationwide,” said Elizabeth Steele, director of economic development at MassBIO.
“Nationwide, biotech as a whole is also outperforming 2015, but again at a slower rate than that of Massachusetts, with seed stage investment outside of Massachusetts surpassing 2015 rates by 41 percent in the first half of the year, in comparison to Massachusetts’ 95 percent,” Steele told Bloomberg BNA in an Aug. 26 e-mail.
About 79 percent of seed capital from disclosed, leading investors in 2015 came from financiers within Massachusetts. About 49 percent of Series A funding—the first significant round of investing for a startup—came from within the state and 30 percent came from financiers based elsewhere in the U.S., according to the report, titled MassBIO 2016 Industry Snapshot.
Total venture capital investment in Massachusetts biotechnology increased to $2.1 billion in 2015, the highest amount ever, compared to about $1.8 billion in 2014, the report said.
Massachusetts received 28 percent of venture capital funds in the U.S. last year, the report said.
The Massachusetts startups that received the most venture capital funding overall in 2015 included Moderna Therapeutics, at $450 million; Editas Medicine, at $120 million; and Gritstone Oncology, at $102 million, the report said.
The Massachusetts biotechnology sector is competing head to head with California's large biotechnology base.
California hosts 2,700 biotechnology companies, which employ 267,000 people. About 900 new drugs are in the pipeline in California, according to the California Biotechnology Foundation.
In 2015, Massachusetts had about 750 biotechnology companies, according to MassBIO. They employed 63,026 and had 1,645 drugs in the pipeline, the MassBIO report said.
After California and Massachusetts, the MassBIO report showed, New Jersey, New York and Pennsylvania also host vibrant biotechnology sectors.
Massachusetts leads the nation in biotech research and development employment. In 2015, 31,469 people worked in biotech R&D in Massachusetts.
In California, 29,616 people were employed in biotechnology R&D. New Jersey followed, at 13,799 R&D jobs, the MassBIO report said.
California is first in the nation in biopharmaceutical manufacturing employment, with 47,986 people in 2015, MassBIO found. New Jersey was a distant second, with 22,353 people employed in manufacturing, and North Carolina was third, at 21,684 people.
Massachusetts was 10th in biopharmaceutical manufacturing, with 10,616 people employed in that area in 2015. Manufacturing grew, however, from 2014, when the sector employed 9,899 people.
“Massachusetts continues to shine in research and development, and this year we are also proud to see marked growth in bio-manufacturing,” Robert Coughlin, MassBIO's chief executive officer, said in an Aug. 24 statement. “MassBio has been working with our partners in government and academia to cultivate an ecosystem that supports biomanufacturing, so we are pleased to see those efforts paying off.”
The largest biopharmaceutical employers in Massachusetts in 2015 included Sanofi Genzyme, with 5,000 employees; Biogen, with 2,900 employees; and Shire, with 2,580 employees, according to MassBIO.
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Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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