Biden’s Biotech Moonshot Has The Money. Now Cities Want It In Their Backyard

Cities and states jockeying for position in the race for biotech dollars and talent have their sights set on a whale that comes along once in a generation.

When President Joe Biden announced last year that the federal government is launching a new outfit, the Advanced Research Projects Agency for Health, dedicated to funding moonshot tech research, he kicked off a new, high-stakes battle among municipalities that are eager to land the headquarters of a federal agency dedicated to advancing and funding cutting-edge research.

Meant to “drive breakthroughs in biomedicine to prevent, detect and treat diseases, including cancer, Alzheimer’s and diabetes,” Biden said at a recent March event, ARPA-H is part of an overall increase in health and biotech funding championed by the new administration.

When up and running, the new agency will dole out billions of dollars in research grants, adding to the sizable pool of existing National Institutes of Health grants while supporting more experimental, cutting-edge treatments and therapies.

Top biotech clusters have thrown their hat in the ring to host ARPA-H, including Boston, Silicon Valley, San Diego, Maryland and North Carolina, according to recent reporting from Stat News and The Scientist. Mary Beth Thomas, a senior vice president at the North Carolina Biotechnology Center, told Bisnow that ARPA-H is “one of the bigger and more exciting life science-oriented topics that is actively being discussed in D.C.,” and said “chatter has begun by stakeholders across North Carolina” due to the possibility that ARPA-H is located far from the nation's capital.

”We obviously think that North Carolina should surely be considered as a possible location for this new effort,” she said.

Since the Biden administration first proposed the idea in early 2021, Congress has already set aside $1B in a recent spending bill, suggesting it will soon be up and running and trying to seed catalytic ideas for biotech innovation. Biden requested an additional $4B for ARPA-H in current budget talks for the coming fiscal year, while keeping the NIH funding flat, suggesting the annual increase in NIH funding and resources would effectively flow through the new agency.

The pitch — or the chatter forming around the pitch, as Thomas said — tends to focus around how certain markets can play a role connecting research grants and those administering them to different facets of the life sciences ecosystem. For North Carolina, Thomas points to the Research Triangle’s universities, depth of contract research organizations and biomanufacturing.

But there is doubt that landing the headquarters would be a catalyst unto itself, bringing more startups and lab development to a particular region, or merely a feather in the cap, a symbol of a city or region’s coming of age that is more symbolic.

“I think it’s less important where the ARPA-H headquarters is,” Association of University Research Parks CEO Brian Darmody said. “I don’t think there’s going to be a lot of research happening at the headquarters. It’s more going to be about adding to the luster of whatever region.”

Many lawmakers and regional biotech business associations are already making a push for ARPA-H. Rep. Anna Eshoo, a Northern California Democrat who has been in Congress for nearly two decades, who co-wrote the bill creating ARPA-H, has been pushing for the agency to have a California address. Darmody says the Maryland delegation wants ARPA-H near the NIH headquarters in Bethesda.

The most organized effort to date has come from Texas. A coalition of research centers, universities and health systems, building on recent developments and investment in the state’s biotech capacity, are working to bring ARPA-H to the Lone Star State. At a time when big developments in Dallas and Houston, including the TMC3 campus near the Texas Medical Center, are taking shape, landing the new agency could be seen by researchers and investors as a vote of confidence in the state’s recent growth.

“It’s really early in the process, and the president has to make some decisions, so the ball’s in their court,” said Thomas Graham, a spokesman for what’s being called the Coalition for Health Advancement and Research in Texas, which has detailed site proposals for Houston, Dallas, San Antonio and Austin based on conversations with the Office of Science and Technology Policy.

“Our goal is to let them know the infrastructure and depth of support to bring the headquarters to Texas," Graham said. "We believe in the mission of ARPA-H and think it can be transformative to the future of healthcare and want to play a role. It’s important for it to be in a place that provides maximum benefit to the nation and the world.” 

“Sometimes, it requires an outside entity ... to say, 'We’re doing a lot here' to validate what’s going on,” Darmody added. 

The question of where ARPA-H’s headquarters ends up may not be the most important one, as far as determining the direction of biotech innovation and the growth in lab space demand. Similar agencies didn’t provide the kind of economic development boost that tends to bring out incentives and tax breaks.

The creation of DARPA, the Defensive Advanced Research Project Agency, which is the model for ARPA-H and ARPA-E, and its eventual location in Arlington, Virginia, didn’t turn the Beltway-adjacent county into a nexus for futuristic innovation. The armed force’s innovation agency, born in 1958 out of space race fears and the launch of Sputnik, had and has a small staff, which funds strategic research across the country, seeding top scientists with grants as opposed to running its own labs.

Currently, it has roughly 220 employees who oversee a budget of $3.5B that’s spent across the country. Its early work on computers, for instance, tended to be concentrated at universities in California and Massachusetts. 

That history isn’t deterring cities and states vying to host the agency. Texas Healthcare and Bioscience Institute President Victoria Ford said even if ARPA-H is just sending out grants to researchers across the country, landing the HQ in Texas would be a symbol of the growth and “coalescing” of the industry in the state, and a source of prestige. 

Health and Human Services Secretary Xavier Becerra envisions a similarly “small, lean” team running ARPA-H, he told Congress during an appropriations hearing, one that “leans on the private sector” to get up and running. What may end up being more impactful than the agency’s location is how it’s set up.  

Lawmakers, including Eshoo, expressed disappointment that ARPA-H would fall under the extensive NIH bureaucracy, per a decision by Becerra, who argued having the ARPA-H within NIH would avoid funding and grant-making overlap. Eshoo said in a statement that by “relying on a bureaucratic structure, rather than a transformational one,” and placing it within existing bureaucracy, the decision was “an opportunity squandered.”

An HHS spokesperson told STAT News that while ARPA-H would fall under NIH in the department's organizational chart, its director would report directly to the HHS secretary.

Other lawmakers have suggested ARPA-H is being set up too quickly. Oklahoma Rep. Tom Cole, who championed the creation of ARPA-H, argued that by focusing on the transformative, great-leap-forward types of grants envisioned for ARPA-H before it’s up and running, the nation is misdirecting funds that could be used for basic biomedical research, which have proven themselves to be particularly valuable in recent years. 

During a recent appropriations hearing about Biden’s 2023 budget requests, he expressed skepticism over the structure of the agency and said he didn’t want to see ARPA-H “cannibalizing” what other agencies were doing.

“I don’t disagree with the spending you’re talking about, but disagree about the division of labor between the NIH and ARPA-H,” Cole said.

Federal funding has been a key source of biotech’s recent boom and the subsequent demand for life sciences real estate. Wherever ARPA-H ends up, it seems more significant that more funding is being added to the $43B pool of grants the NIH handed out in the most recent fiscal year, roughly equal to the amount of money venture capital invested in the space last year.