In Massachusetts, Latest Annual Snapshot Shows a Tale of Two Biopharmas

Massachusetts, the home of the nation’s leading biopharma cluster as ranked by GEN, offers a study in contrasts when it comes to the health of the sector, as revealed by an industry group.

In a report released Tuesday, life sciences group Massachusetts Biotechnology Council (MassBio) found that companies based in the Bay State, especially at growth stages, are reaping the fruits of growth in venture capital (VC), the initial public offering (IPO) market, and merger-and-acquisition (M&A) activity.

But Massachusetts—whose nation-leading cluster is centered in Boston and neighboring Cambridge, MA—is seeing three challenging trends unfolding in recent months. One is a 39% decline in seed-stage venture capital awarded to startups in the first half of this year vs. H1 2025, to $4.65 million from $7.65 million—even though Massachusetts saw 21 seed deals during Q1-Q2 2026, from 15 a year ago.

Another concerning trend for the industry was a 1.3% dip in NIH grant funding for the research that underpins biopharma, to $3.413 billion in 2025 from $3.458 billion a year earlier—and especially a six percent drop in the number of grants awarded, to 5,423 from 5,782.

Even worse, Massachusetts’ biopharma workforce shrank three percent or 3,605 jobs in 2025 compared with a year earlier, sliding from 117,108 to 113,503 jobs. And the state’s biopharma community is assessing the competitive challenge posed by China’s biopharma ecosystem.

“In the big picture, things look good. But when you drill a little bit deeper, there’s some places that are potentially worrisome,” Ben Bradford, MassBio’s head of external affairs, told GEN.

‘Fewer shots on goal’

“A one percent drop in NIH funding is not great, but also not the end of the world. The more concerning number for me is seeing the 6+% drop in number of awards. That’s just fewer shots on goal,” Bradford said. “And in an industry that has such a high failure rate, we need as many shots on goal as possible.”

He said MassBio is working to address the need for further NIH funding through talks with Massachusetts’ Congressional delegation and building relations with delegations of U.S. lawmakers from other states. The effort faces a political hurdle, however: Massachusetts’ delegation consists entirely of Democrats while Republicans control both the U.S. Senate and House of Representatives heading into November’s elections.

“We need to spread the wealth of these grants as much as we can, so that we get as many shots at good science as possible,” Bradford said.

He said MassBio was committed to supporting startups, citing the Drive accelerator program through which MassBio partners with South Carolina’s life-sci industry group SCbio to advance the breakthrough science and technology of pre-seed companies, as well as equip their founders with the tools for long-term success. Drive is intended to enable startups to access the knowledge of industry experts, the guidance of experienced mentors, and the connections essential for life-sci success.

“We have been approved by our board to take some of our reserves and give non-dilutive grant funding to some of the graduates of that program. And we’re trying to pull in other organizations to provide non-dilutive capital to really well-vetted early-stage companies as well,” Bradford explained.

The job contraction, he said, reflected pipeline reprioritization by biopharma giants plus contraction by smaller companies, with R&D jobs dropping significantly between Q2 and Q3 of 2025, then starting to bounce back by Q4. The mid-year drop explains last year’s overall 3.9% or 2,563-job decrease in R&D employment statewide, which fell to 62,991 from 65,554 jobs.

Of the 20 largest biopharma industry employers whose headcounts were included in the report, eight showed year-over-year job declines—Takeda Pharmaceutical, Moderna, Bristol Myers Squibb, EMD/MilliporeSigma, Merck & Co., Foundation Medicine, Lantheus, and Sarepta Therapeutics. Another two employers (Novartis and AstraZeneca/Alexion) showed no change from 2025.

Reducing headcount

Takeda, which is Massachusetts’ largest biopharma employer, was reported as reducing its Massachusetts headcount by three percent or 181 jobs this year, shrinking to 5,628 from 5,809 in 2025. That total will likely shrivel further next year, since Takeda announced plans in May to shed 4,500 jobs worldwide, about 10% of its total workforce. In March, Takeda eliminated 247 jobs in Massachusetts, where the company has facilities in Lexington, MA, and Cambridge, part of a $1.3 billion restructuring that cut 634 jobs nationwide.

Among companies that expanded their workforces, the biggest creator of new jobs was Eli Lilly, whose headcount nearly tripled, zooming 164% to 1,423 from 540 jobs. The pharma giant has carried out a companywide expansion fueled by more activity in genetic medicines—Lilly opened its $700 million Institute for Genetic Medicine in Boston’s Fort Point section in 2021—plus blockbuster-level sales for its obesity and type 2 diabetes drugs. In June, for example, Lilly agreed to partner with Ascidian Therapeutics to develop RNA exon editors intended to treat inherited kidney diseases, through a collaboration that could generate more than $1.9 billion for Boston-based Ascidian.

And twice so far this year, Lilly has agreed to acquire Massachusetts-based oncology and autoimmune drug developers among the 11 biopharmas it has announced plans to buy out. In April, Lilly said it was shelling out up to $7 million for Kelonia Therapeutics, while in February Lilly announced it would spend $2.4 billion for genetic medicine developer Orna Therapeutics. Among Massachusetts-based buyers, the biggest dealmaker was Cambridge-based Biogen, which in May completed its up to $5.6 billion purchase of Apellis Pharmaceuticals, a Waltham, MA-based developer of immunology and rare disease treatments.

China watch

MassBio’s report included for the first time a “China Watch” section devoted to the world’s most populous country’s biopharma industry, citing its numerous successes of recent years. They include a 36% year-over-year jump in clinical pipeline drugs, to 7,105, compared with Massachusetts’ nine percent growth for its pipeline of 2,175 treatment candidates. China has more than double the state’s number of candidates in advanced modalities such as cell and gene therapies (1,322 to 561) and has racked up $79 billion in out-licensing deal value compared with just $10.9 billion for the Bay State.

China’s advantage over Massachusetts is most pronounced in numbers of ongoing clinical trials, including Phase IV (17,150 to 2,690).

China’s pipeline grew 36.2% year over year, surpassing Europe’s for the first time; China out-licensed roughly $79 billion in disclosed potential deal value in 2025, up from about $1 billion in 2019; and China now runs more early-stage clinical trials than any geography analyzed.

“The companies being impacted most are really those early-stage companies,” Bradford acknowledged. “Right now, we need to make sure that clinical trials can be faster in the U.S., so that companies don’t want to go to China to do it. We need to make sure that we have a full incentive package to help companies grow in the U.S. So it’s not just walling off China; it’s creating a full suite of competitiveness programs, that allow the U.S. to maintain our leadership.”

Can Massachusetts act alone? Or must it wait for an American biopharma-first policy to emerge from Washington?

“Does some of that take waiting for D.C.? Yes. Do we need our voice in D.C. to make sure that those programs are created for what the U.S. needs? Yes, we do. And do we need industry to step up, like we’re doing through our Drive program? Absolutely,” Bradford added. “It’s all of the above, really.”

Boston, Cambridge, and their suburbs comprise the nation’s top biopharma cluster as ranked in GEN’s nationally- and regionally-cited A-List of Top 10 U.S. Biopharma Clusters. As of June when the updated ranking was published, Boston/Cambrdge scored lowest in jobs, placing just fifth—while finishing third in patents, second in VC and NIH funding, and tops in lab space.

No lab space growth

MassBio recorded no growth in the amount of lab and biomanufacturing space this year. It remained at a nation-leading amount of 63.2 million square feet as developers scrambled to fill a glut of available space. Despite no increase, the statewide vacancy rate for life-sci space climbed year-over-year to approximately 31% by mid-2026, up from about 28% a year earlier. MassBio contrasted the current inventory size with the 21.5 million square feet it recorded in 2015.

Also on the positive side, Massachusetts biopharma startups raised $3.45 billion in VC in the first half of 2026, the largest amount for a half-year period since 2023 and an increase of 25% from $2.75 billion last year. Parabilis Medicines raised the largest VC award of the half, a $305 million Series F round in January completed five months before it completed the largest-ever IPO to date by a drug developer, raising an eye-popping $770.5 million in gross proceeds.

Massachusetts-based biopharmas completed eight IPOs in the first half of 2026—compared with two in all of 2025 and six in all of 2024. Going public between January and June were Kailera Therapeutics ($719 million); Generate: Biomedicines ($400 million); Hemab Therapeutics ($347 million); Aktis Oncology ($318 million), Avalyn Pharma ($300 million), Odyssey Therapeutics ($279 million); and Seaport Therapeutics ($255 million). This year’s eight IPOs accounted for about two-thirds of the 13 total biopharma IPOs carried out in U.S. markets so far in 2026.

Beeline Medicines, a developer of precision autoimmune and inflammatory disease therapies, closed in June on a $126.3 million VC extension that boosted its total Series A round to $426.3 million, inclusive of a $300 million financing commitment announced last year and led by Bain Capital.

Massachusetts accounted for 25% of the nation’s total VC haul and placed second only to California’s $5.979 billion among individual states. Massachusetts also attracted $7.63 billion in VC last year, 3% below the $7.89 billion recorded for 2024.

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