Why is Everyone Talking about Gene Therapy and Biotech?
In the past three years, there has been a noticeable uptick in stories featuring the development and commercialization of gene and cell therapies as treatments for cancers and other diseases. The local and national business communities stirred when news outlets detailed the $4.3 billion acquisition of Philadelphia-based Spark Therapeutics from the multinational Swiss healthcare company Roche in February 2019. A few days later Amicus Therapeutics announced the launch of its new Global Research and Gene Therapy Center in University City to the excitement of local researchers and entrepreneurs. It seems that Philadelphia is poised to become a major biotechnology hub – or “Cellicon Valley” (a play on California’s Silicon Valley) -- as enthusiasts have suggested.
Biotechnology is a fast-growing industry across the U.S. and within Greater Philadelphia. Broadly speaking, biotechnology is the use of biological materials and living organisms to manufacture various agricultural, medicinal, and commercial products.[3,4] There are many different subfields and specializations within biotech, and Greater Philadelphia has made a name for itself in the subfields of gene and cell therapy – a treatment protocol in which viruses or new cells are introduced into a patient’s system to either stimulate or inhibit the growth of certain proteins or cells. In fact, the first FDA-approved gene therapy for a genetic disease originated in Philadelphia. Recent research breakthroughs in the region have ushered in a surge of private investment, new business activity, and media attention directed at Philadelphia’s biotech industry. The world’s eyes turned to Philly’s biotech sector when it played host to the 2019 Biotechnology Innovation Organization’s (BIO) International Convention. To many, hosting this convention at this moment solidified Philadelphia’s position as a global biotech leader.
With anecdotal evidence pointing to unmatched growth and development in Philadelphia's biotech scene, the Economy League set out to determine if and how this qualitative growth is reflected in regional economic indicators. In this brief, we compare biotech industry growth metrics among major U.S. metropolitan areas, and we conclude that the right elements are coalescing for Greater Philadelphia to become Cellicon Valley – provided relevant stakeholders continue to do the work to deepen collaboration. This brief was developed for our 2019 Greater Philadelphia Leadership Exchange’s Regional Exploration on biotechnology presented by the Philadelphia Convention and Visitors Bureau.
Measuring Greater Philadelphia’s Growth in Biotech
Biotech is an innovation-driven industry where successful businesses grow from the confluence of precise research and entrepreneurial acumen. To capture growth in both biotech research endeavors and private investment, we utilized four proxy measures. To measure growth in research, we used the U.S. National Institutes of Health (NIH) funding awards records and the U.S. Patent and Trademark Office’s biotechnology-related utility patent counts. While NIH funding awards detail how well a region’s life sciences field is at acquiring federal funding for projects, patent records provide an estimate of the number of completed or nearly completed projects that require patent protection. For private investment, we used the PwC MoneyTree Report’s venture capital investment data to measure initial-stage biotech investment (i.e. Seed/Angel, Series A, and Series B investments). We also used the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages to track biotech establishment growth across metropolitan areas (ideally, we’d also measure biotech employment growth across metropolitan regions, but data from the Bureau of Labor Statistics is incomplete and makes comparisons difficult). The table below compares Greater Philadelphia’s growth rate across these measures with other major metropolitan regions and the U.S. The other metropolitan regions used in this comparison were identified from research as high-achieving biotech regions.
Comparing Biotechnology Industry Growth Rates across Major Metropolitan Regions and the U.S.
(click "Hide Toolbars" to see the entire table)
The above table is interactive and will reorder columns in size order when you click on the columns' names.
The table shows that Greater Philadelphia’s growth in biotech in the past decade has been substantial, but still lags other metropolitan regions. Greater Philadelphia generally ranks fourth or fifth across most of the beforementioned measures, except for two: the region ranks first in “Growth in Early-Stage Venture Capital Investment (2008-2018)” and ranks next to last in “Growth in Patents (2002-2015).” These two measures, however, suggest that Greater Philadelphia’s biotech industry is in something of a ‘takeoff’ phase.
Early-stage venture capital investments occur during the initial phases of a project or product’s development, while patenting most often occurs after researchers have produced enough experimental evidence to demonstrate the product’s or project’s novel utility.[4,8] Significant growth in early-stage venture capital investments and sluggish growth in patenting highlights a developing momentum for Greater Philadelphia’s biotech industry. The interactive line graph below further demonstrates this initial momentum; it illustrates raw figures for early-stage venture capital investment across major metropolitan regions and the U.S. as a whole. Click on any metropolitan region in the top-right corner to add or delete it from the graph; isolating Greater Philadelphia shows the steep growth curve in venture capital investment in the past two years. It may not be at the level of other metropolitan regions, but the recent growth is undeniable.
Early-Stage Venture Capital Investments in Biotechnology
(click "Hide Toolbars" to see the entire graph)
The above graph is interactive. Click and drag the mouse over certain sections of the graph to zoom-in. You can also "add" or "delete" cities on the graph by clicking their names in the legend on the right.
It is important to note that in the life sciences, commercialization takes time, thanks in part to federal research regulations and protocols for working with living organisms. The long tail of life sciences commercialization can mean that discoveries made a decade ago may only just now be seeing the light of day in a commercial application. Metropolitan regions who had more collaborative research and private industry sectors (e.g. San Francisco and Boston) were able to jumpstart their biotech endeavors much earlier than Philadelphia. Philadelphia’s biotech industry is not at the levels of Boston or San Francisco, but continued collaboration among research institutions and the private sector could help close this gap.
Philadelphia the next Cellicon Valley?
Many biotech enthusiasts have analogized Philadelphia's growing biotech scene to that of California’s Silicon Valley. Silicon Valley is seen as the hub of “disruptive technology” because of the dense co-location of top-flight higher education institutions, high-tech companies, specialized law firms, and venture capital all with the capacity to support and fund new innovative ideas or advances in technology. Much of Silicon Valley’s success has come from cross-collaboration among these entities. Greater Philadelphia contains many of the same elements, but it has only recently capitalized on these cross-collaborations.
The recent burgeoning success of Greater Philadelphia's biotech industry is the culmination of years of investing in technology transfer. A 2007 Economy League report highlighted the region’s need to facilitate the transfer of innovative ideas and technologies from research institutions to private industry. This process of commercialization fosters regional economic development and helps sustain technologically-advanced industries. A robust commercialization pipeline requires an integrated ecosystem where researchers, entrepreneurs, investors, and other key stakeholders can easily collaborate.[10,11] Much of the recent growth in the region’s biotechnology industry is the result of concerted strategies to enhance this kind of collaboration, led by economic development intermediaries--like the University City Science Center and Benjamin Franklin Technology Partner--and academic and research institutions that have beefed up the capacity of their technology transfer offices.
If Greater Philadelphia hopes to position itself as Cellicon Valley, this collaborative element of our local innovation ecosystem must continue to develop. During the 2019 Greater Philadelphia Leadership Exchange, we are convening representatives from biotech firms, academic institutions, and tech transfer nonprofits to learn about efforts currently underway to strengthen collaboration. Our leadership cohort will hear from these representatives about how well our region is growing its biotech industry. They will also discuss strategies to further its momentum.
 DiStefano, Joseph N. and Diane Mastrull. 2019. “Roche agrees to buy Philadelphia biotech Spark Therapeutics for $4.3 billion, enriching CHOP, founders.” The Philadelphia Inquirer, February 25. Retrieved from: https://www.inquirer.com/business/roche-spark-therapeutics-gene-therapy-purchase-20190225.html.
 Terry, Mark. 2019. “Amicus Therapeutics to Hire 200 Researchers at New Gene Therapy Center in Philadelphia.” BioSpace, February 26. Retrieved from: https://www.biospace.com/article/amicus-launching-gene-therapy-center-in-philadelphia/.
 European Patent Office. 2017. “Biotechnology Patents at the EPO.” European Patent Office. Retrieved from: https://www.epo.org/news-issues/issues/biotechnology-patents.html.
 Rothstein, Matthew. 2019. “Finally, Philly has a Signature Industry to Kick-Start a Development Boom.” Bisnow, June 18. Retrieved from: https://www.bisnow.com/philadelphia/news/economic-development/philadelphia-life-science-signature-industry-development-boom-99479.
 Rushing, Ellie. 2019. “Philly’s biotech leaders pitched the city at Bio 2019 to CEOs and some even seemed impressed.” The Philadelphia Inquirer, June 5. Retrieved from: https://www.inquirer.com/business/drugs/philadelphia-bio-2019-gene-therapy-novartis-spark-university-pennsylvania-20190605.html.
 TEConomy Partners, LLC and Biotechnology Innovation Organization (BIO). 2018. Investment, Innovation and Job Creation in a Growing U.S. Bioscience Industry. Retrieved from: https://www.bio.org/value-bioscience-innovation-growing-jobs-and-improving-quality-life-2018.
 Stephenson, David. 2015. “Biotechnology and the Independent Inventor: Experiments.” Professional Blog of Vincent LoTempio: Registered Patent Attorney. Retrieved from: https://www.lotempiolaw.com/2015/02/blog-2/biotechnology-experiments/.
 Amadeo, Kimberly. 2019. “Silicon Valley, America's Innovative Advantage: Five Reasons Why No One Can Copy Silicon Valley's Success.” The Balance, August 24. Retrieved from: https://www.thebalance.com/what-is-silicon-valley-3305808.
 Moretti, Eric. 2012. The New Geography of Jobs. Boston, MA: Mariner Books: Houghton Mifflin Harcourt.
 Carlino, Gerald and William R. Kerr. 2014. “Agglomeration and Innovation.” National Bureau of Economic Research, Working Papers: 20367. Cambridge, MA: National Bureau of Economic Research. Retrieved from: https://www.nber.org/papers/w20367.pdf.
FURTHER READINGS ON THIS TOPIC:
Imvax is Putting Brain-Cancer Lab in Old City - Inquirer 2019
How Philadelphia Became Cellicon Valley - CIC 2019