Philadelphia's Life Sciences Ranking Has Slipped. Insiders Say The State Needs To Go Big To Level Up
Philadelphia needs to remind investors the city can do it all in life sciences and reestablish its bona fides as a fitting headquarters location for leading companies.
That was the word from panelists at Bisnow's Philadelphia Life Sciences Conference Thursday, who said it's time for the city to go big or go home when it comes to burnishing its image and tapping into government and private funding to boost and expand the industry.
While a downturn in life sciences has hurt every market, Philadelphia is feeling the pain acutely, thanks to rising vacancy and slower leasing in labs and other facilities over the past two quarters. Meanwhile, the city's life sciences market has dropped two spots to eighth place in CBRE's most recent ranking of leading life sciences markets.
Philadelphia is home to nearly 10% of the world’s cell and gene therapy companies, according to The Chamber of Commerce for Greater Philadelphia, supplying thousands of jobs to the area. But dominance in just one area might be a sign that Philadelphia has set itself up as a one-trick pony, panelists said.
If venture capital money returns soon — and many believe it will — Philadelphia needs to get its share by advertising its strengths outside of gene therapy, they said.
Gene therapy suffers compared to other life sciences specialties because it takes longer to test potential therapies and products before bringing them to market, Melina Blees, Philadelphia head of BioLabs, said at the event, held at Live Casino.
“If you're watching a cell therapy company or a company specializing in cell therapy, you're not going to just kick anything off the ground, versus medical devices, where you can make a lot of progress and get a lot closer [to profitability] on a relatively small amount of money,” Blees said, adding the medical device field also enjoys a shorter timeline to making money.
Panelists also said Pennsylvania’s government may be making it onerous for new companies to enter the market, including requiring a liquor license for some life sciences work.
“You need a permit through the liquor board in order to order high-proof ethanol for the labs,” Blees said. “This is the only location we're in across the world where that's true.”
More state funding is also needed to shore up the industry and put it on par with the biggest life sciences meccas.
Pennsylvania Gov. Josh Shapiro has been vocal about supporting the industry, rolling out efforts like the Life Science Greenhouse Initiative, but that funding is paltry compared to government initiatives in life sciences powerhouses like Boston, panelists said. The initiative for startups will dole out only $3M to be split between Pennsylvania’s three Life Sciences Greenhouse organizations.
Tony Green, chief scientific officer at Ben Franklin Technology Partners, said funding isn’t following the growth of the industry.
“Though Shapiro has been tremendous, the money still isn't there,” he said. “We're not Massachusetts, we're not North Carolina, we're not even Ohio.”
Green’s firm hopes to add thousands of new life sciences jobs within the decade just to keep up with demand.
Instead of waiting for support from the government, private and other nongovernmental support could be the answer to getting the industry revved up, B+labs Director Matthew Burkhardt said.
Science shouldn’t be sitting on the sidelines, he added.
Burkhardt’s accelerator space is backed by the Pennsylvania Biotechnology Center, a local nonprofit. The organization offers an accelerator lab and offices for 40 small to midsized science, research and pharmaceutical firms. That type of model could capture capital, as long as benefactors realize they are investing for the long run, he said.
Panelists also said the region should better advertise itself as a place to find and keep talent, from recent graduates to corporate leaders. Whereas companies in places like Boston cycle through new CEOs each year or so, companies in Philadelphia have staff that stay, and that's a selling point, they said.
Philadelphia Industrial Development Corp. is working in the Navy Yard to help start programs that find and train entry-level talent, not only to create a life sciences pipeline but also to attract new business, PIDC Senior Vice President Kate McNamara said. Some 90% of the graduates find area jobs, according to PIDC data.
CBRE analyst Matthew Knowles said Philadelphia is still a leader for talent despite this year's drop in the rankings.
“Our market’s top five position in degree and certificate creation, which outpaces our number eight position overall, highlights that deep talent pool the universities and institutions provide,” he said in a statement released with the report.
And a downturn isn't a downfall, said Jim Daly, associate project director at CRB Group, merely a dark cloud with a silver lining.
“Science doesn't stop, right? Great research [is] happening, great science being advanced,” Daly said. “Those folks need to advance those programs. And that will happen. It's kind of like water. It'll seek itself up.”
