The city that never sleeps is itching to become the city that could cure insomnia. With Boston and San Francisco maintaining their dominance as the premier hubs for developing drugs, New York City has orchestrated a scheme to entice biotech — identifying the lack of space in these desired clusters as a key impediment to growing startups.
Back in 2016, NYC mayor Bill de Blasio made a $500 million commitment to the sector over 10 years as part of his broader plan to boost job creation. As part of this initiative, called LifeSci NYC, $10 million has been set aside to support nascent biotechs by allocating them lab space.
“One of the major issues the city has faced with life sciences has been finding space,” a spokesman for New York City Economic Development Corp (NYCEDC) told Endpoints News. “There has been significant additions to incubation space with BioLabs@NYULangone, JLabs, and Launch Labs, but we’re now facing what happens to those companies once they’ve successful graduated from these spaces. The Expansion Space Funds was one of the solutions – we wanted to help them by directly investing into the companies who are taking on the additional cost to create new space in the City to grow.”
Despite high rents and low availability, the life science ecosystems in Boston and San Francisco continue to thrive, while the Denver metro area has seen life sciences employment double in the last decade thanks to a burgeoning startup community. Seattle, meanwhile, has profited from a flurry of M&A activity and now commands some of the highest rents outside of San Francisco and Boston, according to a research report by Jones Lang LaSalle detailing the life sciences landscape in 2018.
Startups are also constantly vying for top biopharma talent, which has had a ripple effect on real estate decisions. Data from JLL show the highest number of life sciences PhDs each year graduate from — you guessed it — Boston and San Francisco with 1317 and 1065, respectively. New York, meanwhile, generates some 591 such graduates annually, while claiming to be the world’s largest concentration of academic institutions. After talent, space is another important consideration for biotech startups. According to JLL, eight of the top 10 US clusters currently have single-digit direct vacancy rates.
NYCEDC launched the expansion fund earlier this month by allocating $1 million to Versant Ventures-backed immuno-oncology startup Quentis Therapeutics. They debuted with a $48 million A round in 2016, used to expand its headquarters with 10,000 square feet of dedicated wet-lab and office space in West Harlem.
The company, run by former Regeneron exec Michael Aberman, currently has 16 employees, and hopes to employ a total of 50 over the course of five years. Quentis’ new HQ will form part of West Harlem’s biotech cluster, which includes CUNY’s Advanced Science Research Center, City College’s Center for Discovery and Innovation, Harlem Biospace, New York Structural Biology Center and the Zuckerman Mind & Brain Institute.
“Investments in NYC by Alexandria Realty initially, and JLABS, and Biolabs NY more recently, have really moved the needle for the NYC biotech environment as start-up space/incubator space had been one of the missing ingredients, now that we have achieved a critical mass of young companies in startup,” Aberman told Endpoints News.
“I have lived in NY for my entire career, my family is here, I am a Yankee, Jets, Knicks fan, and believe there are many talented biopharma executives that would love to stay in (or return to) NY rather than move to Boston or San Francisco.”
Image: NYC Shutterstock
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