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Boston’s home-state biotech hub has seen better days. But there are also reasons to believe a comeback is on the horizon based on last year’s performance, according to industry nonprofit MassBio.
MassBio reported gloomy statistics from the Commonwealth of Massachusetts in 2024, including a rise in layoffs, limited funding and lower rates of innovation. The downturn reflected wider industry struggles, and the Bay State’s slump can be viewed as a microcosm for how early-stage drugmakers have fared nationwide. Long story short: not great.
So when Massachusetts — and particularly Greater Boston, which has served as a major nucleus for the biotech industry for decades — sees brighter shores ahead, the industry can often take that as a sign of potential recovery as well.
Unveiling a recent report from MassBio that takes a look at the state’s biotech funding and innovation environment, CEO Kendalle Burlin O’Connell wrote, “Massachusetts built its leading biotech cluster by investing in breakthrough science at its earliest and riskiest stages … [and] American leadership in biotechnology is both a national security imperative and an economic priority.”
Here are three reasons from the report that point to potentially a brighter future for Massachusetts’ biotech despite recent hard times.
1. Innovation expansion
Massachusetts drugmakers have stayed resilient in the face of a difficult financial landscape, and they have innovation growth to show for it. MassBio reported that biopharma companies in the state advanced their pipelines by almost 14% year over year in 2025, ahead of the U.S. growth of just 6.8%.
Companies with Massachusetts headquarters made up more than 16% of the U.S. drug pipeline in 2025, up a percentage point from the year before. That puts the state at 6.4% of the global pipeline.
And a lot of that innovation was in much-needed early science with preclinical candidates comprising the “largest jump” in pipeline growth, according to MassBio.
2. Strong first funding rounds
Healthy pipeline progress comes amid a harsh financing climate that includes “reluctant private investors, a closed IPO window, cautious pharma and layoffs defining the first half of the [last] year,” according to the report. Venture capital dollars are still hard to come by with only $6.85 billion for Massachusetts-based companies, the lowest amount since 2019.
But there’s a silver lining that could have implications for the future. The average series A venture capital round was $76.7 million in 2025, up more than $10 million from the year before. Although there were fewer deals overall, the rise in value could point to greater willingness to take on earlier investments.
Two companies raking in the biggest VC rounds were Treeline Biosciences with a more than $621 million infusion and Kailera Therapeutics with $600 million.
Cambridge, long the epicenter of the Massachusetts biotech universe, has fallen out of favor. Companies in Boston received more VC funding for the second year in a row, and 71% of funding went to companies outside of Cambridge.
3. Government funding exceeds expectations
NIH cuts to research grants have made many scientists nervous that their funding source could vanish at any moment. While some states like Maryland and North Carolina have borne the brunt of these cuts, MassBio noted the slashing in 2025 wasn’t as bad as expected.
Massachusetts, which received almost $3.5 billion from the federal health research agency in 2024, lost only 3.7% in 2025 and remains the third-largest beneficiary in the U.S. behind California and New York. By comparison, Maryland, which hosts NIH headquarters, lost more than 42% of its funding and North Carolina more than 20%.
In July, MassBio predicted that NIH would cut $500 million. But due to a series of court rulings, policy changes and a September funding frenzy, those cuts only amounted to $125 million by the end of the year.
Where Massachusetts far outshines other states is in federal funding per capita. At $467 dollars per resident in 2025, the nearest state is Maryland, which received just $224.
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Boston’s home-state biotech hub has seen better days. But there are also reasons to believe a comeback is on the horizon based on last year’s performance, according to industry nonprofit MassBio.
MassBio reported gloomy statistics from the Commonwealth of Massachusetts in 2024, including a rise in layoffs, limited funding and lower rates of innovation. The downturn reflected wider industry struggles, and the Bay State’s slump can be viewed as a microcosm for how early-stage drugmakers have fared nationwide. Long story short: not great.
So when Massachusetts — and particularly Greater Boston, which has served as a major nucleus for the biotech industry for decades — sees brighter shores ahead, the industry can often take that as a sign of potential recovery as well.
Unveiling a recent report from MassBio that takes a look at the state’s biotech funding and innovation environment, CEO Kendalle Burlin O’Connell wrote, “Massachusetts built its leading biotech cluster by investing in breakthrough science at its earliest and riskiest stages … [and] American leadership in biotechnology is both a national security imperative and an economic priority.”
Here are three reasons from the report that point to potentially a brighter future for Massachusetts’ biotech despite recent hard times.
1. Innovation expansion
Massachusetts drugmakers have stayed resilient in the face of a difficult financial landscape, and they have innovation growth to show for it. MassBio reported that biopharma companies in the state advanced their pipelines by almost 14% year over year in 2025, ahead of the U.S. growth of just 6.8%.
Companies with Massachusetts headquarters made up more than 16% of the U.S. drug pipeline in 2025, up a percentage point from the year before. That puts the state at 6.4% of the global pipeline.
And a lot of that innovation was in much-needed early science with preclinical candidates comprising the “largest jump” in pipeline growth, according to MassBio.
2. Strong first funding rounds
Healthy pipeline progress comes amid a harsh financing climate that includes “reluctant private investors, a closed IPO window, cautious pharma and layoffs defining the first half of the [last] year,” according to the report. Venture capital dollars are still hard to come by with only $6.85 billion for Massachusetts-based companies, the lowest amount since 2019.
But there’s a silver lining that could have implications for the future. The average series A venture capital round was $76.7 million in 2025, up more than $10 million from the year before. Although there were fewer deals overall, the rise in value could point to greater willingness to take on earlier investments.
Two companies raking in the biggest VC rounds were Treeline Biosciences with a more than $621 million infusion and Kailera Therapeutics with $600 million.
Cambridge, long the epicenter of the Massachusetts biotech universe, has fallen out of favor. Companies in Boston received more VC funding for the second year in a row, and 71% of funding went to companies outside of Cambridge.
3. Government funding exceeds expectations
NIH cuts to research grants have made many scientists nervous that their funding source could vanish at any moment. While some states like Maryland and North Carolina have borne the brunt of these cuts, MassBio noted the slashing in 2025 wasn’t as bad as expected.
Massachusetts, which received almost $3.5 billion from the federal health research agency in 2024, lost only 3.7% in 2025 and remains the third-largest beneficiary in the U.S. behind California and New York. By comparison, Maryland, which hosts NIH headquarters, lost more than 42% of its funding and North Carolina more than 20%.
In July, MassBio predicted that NIH would cut $500 million. But due to a series of court rulings, policy changes and a September funding frenzy, those cuts only amounted to $125 million by the end of the year.
Where Massachusetts far outshines other states is in federal funding per capita. At $467 dollars per resident in 2025, the nearest state is Maryland, which received just $224.
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