For Boston's budding biotechs, an uncertain future amid funding cuts

Boston Globe

5 hours ago

Early stage startups, operating without much financial cushion, are feeling the impact sooner than better-established companies.
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Dépis, and many entrepreneurs like him, are looking for ways to get their science funded. For example, LabCentral, a biotech startup incubator, has a program that allows big pharmaceutical companies to invest in cutting-edge science without making long-term commitments. Pharma companies cover the costs of lab space for individual scientists for a year, providing an easy exit if the research doesn't prove promising.
In its recent five-year strategic plan, the Massachusetts Biotechnology Council pitched the idea of a seed fund to support companies that graduate from the trade group's incubator program. Discussions are underway with MassBio's partners such as LabCentral and the Massachusetts Life Sciences Center, a quasi-public state agency.
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'What's happened this year just validated our plans,' said MassBio CEO Kendalle Burlin O'Connell. 'We knew that we needed to support these early stage companies. We really, really feel it's imperative for Massachusetts to be an entrepreneur, founder-centric ecosystem.'
Dépis — who is researching techniques to better deliver drugs to treat immune diseases — says such support is sorely needed. Earlier this year, he applied for a federal Small Business Innovation Research grant; then the government employee responsible for his application was laid off. Two weeks later, the employee was reinstated, but Dépis's application remains in limbo.
'I'm in a position where time is critical,' Dépis said. 'For me that translates into a higher chance to not have the funding in time that I need to survive.'
And Dépis is not alone.
Before the post-COVID biotech slump, companies accepted
at LabCentral could typically secure funding and move into the space in a few weeks. Now, startups are taking six months to a year to move in — if they move in at all, said LabCentral CEO Maggie O'Toole.
Startups at LabCentral are staying longer, unable to raise the money needed to grow their companies and expand into their own facilities, O'Toole said. The average length of tenancy doubled to about 36 months from 18 months,
Some startups, affected by the Trump administration's grant cuts, have had to give up their LabCentral benches because they can't pay the rent.
'It was nothing to do with the promise of their science,' O'Toole said. 'They had received [approval for] funding that never came through.'
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Robert Coughlin, a managing director at the commercial real estate firm JLL and former MassBio CEO, said the biotech industry is going through a downturn reminiscent of the Great Recession of 2008. Layoffs have spread across the sector. Earlier this month, Boston-based Vertex Pharmaceuticals said it would
Moderna, the Cambridge biotech that soared with the success of its COVID vaccine, has gone through recent layoffs. In 2024, employment across Massachusetts' life sciences sector stagnated for the first time in more than 10 years, according to a report from the Massachusetts Biotechnology Education Foundation.
Boston's commercial real estate sector has been hurt by the biotech slump. The vacancy rate for lab space has reached 32 percent, the highest among major metropolitan areas, according to JLL's most recent US Life Sciences Property Report.
While conditions seem dismal, Coughlin said, he noticed a sense of optimism at the BIO conference. The annual convention not only attracted big crowds from established biotech centers, but also representatives from states and countries looking to invest in and build their own life sciences sectors.
'People want to get together,' Coughlin said. 'They want to collaborate, they want to talk about these challenges.'
Marin Wolf can be reached at