Startups, BioPharma

Massachusetts accounted for more than one-third of biopharma VC funding last year, report shows

The report also showed 1H18 VC funding already nearly equaled investment in 2017. That's consistent with Silicon Valley Bank's findings on Series A rounds last month.

More than one-third of all venture capital funding for biopharma went to companies in one state, according to a report released Wednesday.

The report, by Massachusetts Biotechnology Council, also known as MassBio, found that 37 percent of all biopharma venture capital dollars went to companies in Massachusetts last year, for a total of $3.1 billion. For the first two quarters of this year, companies in the same category raised $2.7 billion in venture funding. Combined with biopharma, life sciences companies there raised $3.6 billion. That marks a slight increase over 2016, but compares with around $1 billion 10 years ago. Much of that funding comes from out of state, with investors from outside of Massachusetts leading 60 percent of the investment into biopharma companies there.

Along with such a large share of venture capital, Massachusetts also accounted for the largest share of biotech initial public offerings, with 48 percent of all biotech companies having IPOs in 2017 being based in the state, compared with 30 percent in 2016.

That the venture capital raised in the first to quarters of this year alone is more than two-thirds the total for all of 2017 should come as no surprise in light of broader research into biopharma and life sciences investment trends. A report in July by Silicon Valley Bank found that nationwide investment in Series A funding rounds in the first half of 2018 already exceeded all the Series A rounds for 2017, hitting $2.6 billion in the first half of this year, compared with $2.3 billion last year. In Massachusetts, the average investment deal size increased from 2017’s $34 million to $51 million in the first two quarters of 2018.

The top venture capital raises by Massachusetts companies include a $500 million raise by Moderna Therapeutics, though the series was undisclosed, followed by a $125 million Series B raise by TCR2 Therapeutics and a $101 million Series C round for Kaleido Biosciences. The two biggest rounds of financing last year were Series A rounds by Cullinan Oncology and Rubius Therapeutics, respectively worth $150 million and $120 million, followed by a $114 million Series B round for Semma Therapeutics.

In addition to venture capital, Massachusetts received $2.7 billion in National Institutes of Health funding, coming in second after California, which received $3.9 billion. But on a per capita basis, Massachusetts ranks highest among the top 10 recipients of NIH funding, at $396 per person, compared while California and Minnesota were tied at receiving $100 per person. Of the top six NIH-funded hospitals, five are in Boston, namely Massachusetts General Hospital, Brigham and Women’s Hospital, Boston Children’s Hospital, Dana-Farber Cancer Institute and Beth Israel Deaconess Medical Center. Other major recipients of NIH funding in the state Boston Medical Center, Massachusetts Eye and Ear Infirmary, Tufts Medical Center and McLean Hospital in Belmont. Of all NIH funding to independent hospitals, Massachusetts receives 57 percent of it.

Photo: Getty Images

Shares1
Shares1