‘Massachusetts remains in a position of strength to receive continued, meaningful investment’

By Rachel Arthur

- Last updated on GMT


Related tags Massachusetts Biotech companies Boston Cambridge Venture capital IPO acquisition

Around 25% of US venture capital biopharma investments flowed to Massachusetts in 2022: cementing the state’s position as a leader in the industry. But how will economic uncertainty affect the hub’s fortunes moving forward?

2022 saw the second highest total of venture capital (VC) funding to Massachusetts-based biopharma companies, $8.72bn, surpassing 2020’s $8bn and only falling short of 2021’s $13.66bn, according to figures from the Massachusetts Biotechnology Council (MassBio) in its 2022 Massachusetts Biopharma Funding Report.

But the council notes biopharma investors are acting cautiously by seeking more data on a longer time horizon amid economic uncertainty, a market reset, and a closed IPO window. The average round size shrank considerably: $35.3m in 2022 compared to $53m in 2021. That is, however, still above the 2022 national average of $28.8m.

And investments flowed to more companies: benefiting 246 companies over 273 rounds compared to 236 across 253 rounds in 2021. Top funding rounds in 2022 were seen by Tessera (Series C, $300m), Upstream Bio (Series A, $200m) and FogPharma (Series D, $178m).

New focus: Waltham, Bedford, Somerville

An interesting shift seen in 2022 was increased investment outside the stronghold of Cambridge. Whereas 42% of companies receiving VC funding in 2021 were outside Cambridge, this rose to 51% in 2022. Boston continues to increase its share of funding (23% in 2022, up from 17% the year before). Waltham took 11% of investment; while up-and-coming areas were Bedford, Somerville and Framingham.

“The VC funding that flowed into local biopharma companies in 2022 is proof that investors continue to want to be a part of the early-stage research and development happening here,”​ said Kendalle Burlin O’Connell, CEO and President of MassBio, which represents 1,600+ members in the state. “The Commonwealth’s innovation ecosystem is second to none, and with these investments comes new opportunities to spread the industry into new corners of the state and advance exciting science toward patients.

“The influx of private funding into the Massachusetts ecosystem will ensure that lab and biomanufacturing space will continue to be in demand, and startup formation and company expansions will lead to additional jobs.”


Even though the impact of the global biotech reset on the IPO market has been dramatic with total IPOs declining significantly compared to 2021, Massachusetts companies did represent 33% of all biopharma IPOs in the US in 2022 with eight companies going public.

While industry experts had predicted an active year for mergers and acquisitions, the total number of Massachusetts biopharma companies acquired was just 26, down from 34 in 2021 and 28 in 2020 - again matching national trends.

The combined value of the acquisitions was $5.9bn, down from 2021’s mega $63.86bn (although that year included AstraZeneca’s $39bn takeover of Alexion and Merck’s $11.5bn purchase of Acceleron). Top acquisitions in 2022 included GSK’s $3bn acquisition of Affinivax (headquartered in Cambridge) and Novo Nordisk’s $1.1bn acquisition of forma therapeutics in Watertown.

“Massachusetts remains in a position of strength to receive continued, meaningful investment, but the implementation of the Inflation Reduction Act, coupled with the fewest US FDA approvals in years, will give investors new reasons for pause,”​ added Burlin O’Connell.

“To counteract these chilling effects on innovation and address the enduring workforce challenges that endanger the industry’s future growth here, the Commonwealth must renew its commitment to an industry that has proven its value to the state economy and its residents and send a clear message to investors that Massachusetts remains the state of possible.”


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