Record lev­els of VC fi­nanc­ing and R&D boom left bio­phar­ma com­pa­nies clam­or­ing for space. How bad is it?

There are mul­ti­ple ways to mea­sure just how vi­brant the life sci­ence in­dus­try is: the in­flux of ven­ture cap­i­tal (now re­treat­ing slight­ly from a record high), the num­ber of new in­cu­ba­tors and star­tups and Big Phar­ma spin­offs (still go­ing strong de­spite slow­ing down), the M&A as well as part­ner­ship deals (mega­bil­lions in cash were ex­changed just last year), and so on. But one met­ric is par­tic­u­lar­ly help­ful if you want to track ac­tiv­i­ties on the ground, and that is re­al es­tate oc­cu­pan­cy.

The big pic­ture: Va­can­cy for lab space is at 7.1% across the 12 ma­jor life sci­ences clus­ters in North Amer­i­ca iden­ti­fied by Cush­man & Wake­field, a re­al es­tate ser­vices com­pa­ny. That’s low­er than the of­fice va­can­cy rate (12.4%) in these mar­kets, while rents are gen­er­al­ly high­er.

In the buzzing bio­phar­ma hub of Boston, on­ly 0.8% of lab space is still avail­able for rent, with East Cam­bridge — which hous­es the ven­er­a­ble Kendall Square — re­port­ing a va­can­cy rate of 0.0%. A cou­ple of oth­er neigh­bor­hoods are al­so ful­ly oc­cu­pied, ac­cord­ing to the re­port.

At the same time, Boston al­so has the high­est ask­ing rent among the mar­kets sur­veyed at $108 per square foot, an all-time high.

Rent vs va­can­cy com­par­i­son in Boston (Cred­it: Cush­man & Wake­field)

Click on the im­age to see the full-sized ver­sion

The re­al­i­ty has not es­caped those liv­ing in it. Arie Bellde­grun, the biotech en­tre­pre­neur best known for his work at Kite Phar­ma, has launched a new re­al es­tate ven­ture with de­vel­op­er Tish­man Spey­er. Break­through Prop­er­ties’ first cam­pus — de­signed to fos­ter a sense of com­mu­ni­ty — is slat­ed to open in the Sea­port com­plex next year.

“There is plen­ty of life sci­ences sup­ply un­der con­struc­tion or pro­posed,” Cush­man & Wake­field not­ed. “The lab mar­ket could grow by 55% to 32 msf by 2024. While the mar­ket is in­cred­i­bly tight, it is one of the few mar­kets in the coun­try that is build­ing ag­gres­sive­ly enough to pla­cate de­mand.”

When you zoom out to the broad­er mar­ket of San Fran­cis­co, the area just trail­ing Boston in the cost of rent­ing a lab space, has a va­can­cy of just 7.5% — mid­dle of the pack, high­er than Chica­go (1.3%), Seat­tle (6%) and even the Wash­ing­ton DC area (4.1%). But drill down to San Fran­cis­co Coun­ty and you’ll find an­oth­er 0.0%.

To put the av­er­age rent of $84 in­to per­spec­tive, the San Fran­cis­co Busi­ness Times re­cent­ly re­port­ed that lease rates were in the $30 range a decade ago in the high­ly cov­et­ed vicin­i­ty of South San Fran­cis­co, where Genen­tech and Gilead call home.

What does this mean for the oth­er cities vy­ing for bio­phar­ma hub sta­tus?

Philadel­phia cur­rent­ly claims the third spot on the list for most lab space, and you can ex­pect it to keep ex­pand­ing with a key fo­cus around its “Cel­li­con Val­ley” brand. Then there’s San Diego and New Jer­sey, which could soon reach sat­u­ra­tion if there’s no new con­struc­tion. And where New York City falls far be­hind in terms of space, it plans to make up with in­cen­tives and the lure of its tal­ent pool.

“With the strong un­der­ly­ing fun­da­men­tals it looks like the life sci­ences era is here,” Cush­man & Wake­field con­clud­ed.

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

Covid-19 vac­cine boost­ers earn big thumbs up, but Mod­er­na draws ire over world sup­ply; What's next for Mer­ck’s Covid pill?; The C-suite view on biotech; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

You may remember that at the beginning of this year, Endpoints News set a goal to go broader and deeper. We are still working towards that, and are excited to share that Beth Snyder Bulik will be joining us on Monday to cover all things pharma marketing. You can sign up for her weekly Endpoints MarketingRx newsletter in your reader profile.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Roche's Tecen­triq cross­es the fin­ish line first in ad­ju­vant lung can­cer, po­ten­tial­ly kick­ing off gold rush

While falling behind the biggest PD-(L)1 drugs in terms of sales, Roche has looked to carve out a space for its Tecentriq with a growing expertise in lung cancer. The drug will now take an early lead in the sought-after adjuvant setting — but competitors are on the way.

The FDA on Friday approved Tecentriq as an adjuvant therapy for patients with Stage II-IIIA non small cell lung cancer with PD-(L)1 scores greater than or equal to 1, making it the first drug of its kind approved in an early setting that covers around 40% of all NSCLC patients.

Amit Etkin, Alto Neuroscience CEO (Alto via Vimeo)

A star Stan­ford pro­fes­sor leaves his lab for a start­up out to re­make psy­chi­a­try

About five years ago, Amit Etkin had a breakthrough.

The Stanford neurologist, a soft-spoken demi-prodigy who became a professor while still a resident, had been obsessed for a decade with how to better define psychiatric disorders. Drugs for depression or bipolar disorder didn’t work for many patients with the conditions, and he suspected the reason was how traditional diagnoses didn’t actually get at the heart of what was going on in a patient’s brain.

Susan Galbraith, Executive VP, Oncology R&D, AstraZeneca

As­traZeneca on­col­o­gy R&D chief Su­san Gal­braith: 'Y­ou're go­ing to need or­thog­o­nal com­bi­na­tion­s'

 

Earlier in the week we broadcast our 4th annual European Biopharma Summit with a great lineup of top execs. One of the one-on-one conversations I set up was with Susan Galbraith, the oncology research chief at AstraZeneca. In a wide-ranging discussion, Galbraith reviewed the cancer drug pipeline and key trends influencing development work at the pharma giant. You can watch the video, above, or stick with the script below. — JC

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Jacob Van Naarden, Senior VP, CEO of Loxo Oncology at Lilly; President, Lilly Oncology

Eli Lil­ly bags FDA nod for Verzenio in ear­ly breast can­cer, but a con­tro­ver­sial di­ag­nos­tic could dog its roll­out

As Eli Lilly works to consolidate its internal and Loxo teams into an oncology powerhouse, the drug giant is putting high hopes on CDK 4/6 inhibitor Verzenio to help drive the portfolio into the future. Now, the drug has scored a paradigm-altering win in early breast cancer — but will a controversial companion diagnostic hamstring Lilly’s market plans?

The FDA on Wednesday approved CDK 4/6 inhibitor Verzenio in combination with physician’s-choice endocrine therapy to cut the risk of relapse in patients with high-risk HR-positive, HER2-negative breast cancer, Lilly said in a release.

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FDA ad­comm votes unan­i­mous­ly in sup­port of a J&J Covid-19 boost­er two months af­ter one-dose shot

The FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) on Friday voted 19-0 in favor of authorizing a second shot of J&J’s Covid-19 vaccine to follow at least two months after the initial dose.

Regulators don’t have to follow VRBPAC’s recommendation, but they almost always do. Considering that the CDC’s advisory committee has already been set to review the expanded EUA, VRBPAC’s recommendation is likely to be adopted.

FDA ad­comm to de­cide on mol­nupi­ravir EUA; Can­cer at­las un­veils new po­ten­tial drug tar­get

The FDA has another adcomm coming down the pipeline — this time on Covid-19 oral antiviral molnupiravir.

The federal agency’s advisory committee will meet on November 30th to go over Merck and Ridgeback’s EUA request for their investigational antiviral drug, and discuss the available data supporting its use in Covid-19 patients.

This comes two weeks after Merck claimed that their antiviral pill reduced the chance that newly diagnosed Covid-19 patients would be hospitalized or die by 50%. The pharma made the announcement after interim data on 775 patients in their clinical trial showed the antiviral’s potential.