Life Sciences 2020: The Future is Here

The Capital Engine All this research requires capital. Biotechnology is the most research- intensive industry in the economy with research and development spending accounting for approximately 25.7% of total life sciences industry revenue. The pharmaceuticals industry ranks third, with R&D representing 15.5% of revenue in 2018. 5 There are three major sources of capital driving R&D in the life sciences sector. All have grown rapidly in the current cycle enabling life sciences companies to expand. The National Institutes of Health (NIH) Government research grants are the primary source of funding for academics and medical practitioners. The grants tend to be concentrated in major medical research institutes, primarily hospitals and major universities. In 2018 the NIH made $28.1 billion in research grants and over the latest five years a total of $124 billion in grants were made. The 10 cities receiving the largest grant awards over the last five years were:

(A list of the top 30 cities and top grant- receiving institutions can be found in the appendix).

TOTAL U.S. NIH FUNDING OVER TIME

$30,000

$25,000

$20,000

Average Annual Growth Rate: 1995-2018:

$15,000

Millions

$10,000

$5,000

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

1

Source: U.S. National Institutes of Health

2

Venture Capital While NIH funding focuses on research, venture capital funding focuses on commercialization. As life sciences technology has advanced, venture capital investment in the life sciences industry has exploded—from a total of $3.7 billion in 2008 to $17.4 billion through the end of 2019. TOTAL U.S. LIFE SCIENCES VENTURE CAPITAL FUNDING

CITY

RESEARCH GRANTS

$3,000 $6,000 $9,000 $12,000 $15,000 $18,000 $21,000

BOSTON

$9.36B

Average Annual Growth Rate 2008-2019: 14.2% 2014-2019: 9.5% 5. 14.7

NEW YORK $7.45B PHILADELPHIA $4.47B SEATTLE $4.47B BALTIMORE $4.22B SAN DIEGO $3.75B LOS ANGELES $3.55B SAN FRANCISCO $3.43B CHICAGO $3.16B PITTSBURGH $2.73B

Millions

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Source: Pitchbook

5 PwC Innovation 1000 report

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