[Updated w/comments, new information, 3:45 p.m. ET, see below] Over the last two days, city and state governments in New York have combined to commit a total of $1.15 billion to the development of the life sciences industry in the Empire State, the largest biotech bet in its history. Today is New York City’s turn.
At an event this morning at the Alexandria Center for Life Sciences on Manhattan’s East Side, Mayor Bill De Blasio (pictured) and the New York City Economic Development Corp.—a quasi-governmental agency that supports job growth in New York—are unveiling a $500 million, 10-year commitment to biotech in New York City, a plan meant to create 16,000 jobs in the area. As with a $650 million initiative announced by Governor Andrew Cuomo on Monday, De Blasio’s plan, dubbed “LifeSci NYC,” is a sprawling group of ideas meant to help young life sciences companies hatch in New York, stay, and grow—something that New York state has had trouble doing for years.
New York City is traditionally known as a financial center, not a life sciences powerhouse. But the raw tools for biotech success are there, with a dense, mixed population; a network of high-profile academic institutions and research centers; plenty of cash; and the nearby presence of large pharmaceutical companies. The city, however, has been unable to capitalize on these tools for years, instead watching much of its research ideas funneled into companies in other cities—most notably the big biotech hubs of Boston and San Francisco, CA.
“We have a real competitive advantage [in life sciences], but it’s one that we’ve underplayed our hand on historically,” De Blasio said at Tuesday’s press conference. “It’s time to change that.”
That narrative has already started to change over the past decade with a series of steps. Through the formation of the Alexandria Center in 2010, along with some incubators, high-profile startups, collaborative initiatives between institutions, and the arrival of several biotech investors willing to bet on its future, biotech in the city has been stirring. Just two months ago, for instance, VC firms Deerfield Management and Bay City Capital teamed with three institutions and Japanese pharma Takeda to form Bridge Medicines, an entity that will shepherd the drugs developed at the local Tri-Institutional Therapeutics Discovery Institute—a separate multi-institutional collaboration— forward and funnel them into new startups. While that’s nothing compared to the constant flow of well-funded biotech startups forming in Boston, it’s the type of thing that simply didn’t happen in NYC two decades ago. The city’s life sciences sector has seen 16 percent job growth since 2009, among the fastest growing in NYC.
Yet a few significant challenges have held NYC back. Lack of wet lab space and affordable living space make it nearly impossible for local biotechs to stay in New York as they grow. The few incubators that exist in Manhattan and Brooklyn aren’t enough to support the type of buzzing biotech startup ecosystems that thrive in Kendall Square or the San Francisco Bay Area. That’s a big problem, because while biotech startup creators like Versant Ventures, Accelerator Corp., and Flagship Ventures and Arch Venture Partners are on the scene with cash to work with (Arch and Flagship are managing a $150 million biotech fund from the NYCEDC), the startups they create won’t be long for New York if there’s nowhere for them to move into. That’s one reason former Rockefeller University president Marc Tessier-Lavigne—a key ex-leader of the New York life sciences scene—called 2016 a “fragile time” in the city’s growth.
Tessier-Lavigne is also among a handful of local life sciences leaders who have gone elsewhere, or announced plans to leave over the past year. Others include outgoing Weill Cornell Medicine dean Laurie Glimcher; Gillian Small, the former vice chancellor for research at the City University of New York; and former NYCEDC life sciences chief Lenzie Harcum, who now works for the New Jersey Economic Development Authority. Those who are still here now have to pick up the slack, among them former Yale University geneticist Richard Lifton, who has taken over for Tessier-Lavigne at Rockefeller. And that type of leadership will be needed going forward.
But the city’s plan today is a step forward. The largest portion of cash in LifeSci NYC, $300 million in tax credits, will go towards solving NYC’s lab space problem. The plan will help create roughly 3 million square feet of wet lab and commercial space for life science firms at prices that startups can afford. The De Blasio administration will also push to rezone several areas in the city to include life sciences sites and “clarify regulations” to make clear that lab space is permitted in most commercial zones.
Another $100 million will help create what’s being called the “Applied Life Sciences Campus.” That facility will be either on the East Side of Manhattan—where several research institutions like Rockefeller, NYU Langone Medical Center, and Weill Cornell Medicine are located—or Long Island City right across the East River from Midtown. According to the announcement, the campus, which looks to be the lynchpin to NYC’s biotech future, will unlock private investment in 2.8 million square feet of lab space, and serve as a connective hub for VC investors, university researchers, startups, and pharma companies.
The goal, NYCEDC president and CEO Maria Torres-Springer said at Tuesday’s press conference, is to establish a “center of gravity” where startups and large companies coincide with translational research. The NYCEDC will begin soliciting proposals to develop the Applied Life Sciences Campus by spring of next year. It will probably take about four to five years total to complete the project, Springer said. De Blasio said one or more academic institutions could anchor the campus.
The city is also putting $7.5 million towards paid internship programs for more than 1,000 students—positions with an average salary of $75,000—at life sciences companies. Roche, Eli Lilly, the New York Genome Center, and Deerfield have already agreed to take part.
The De Blasio administration will make another $50 million in “targeted” investments in the city’s academic centers and research institutions. It will also put $10 million towards up to five new biotech startup incubators—the first of which will open late next year—to be located near existing research centers. Another $7.5 million will be set aside to fund biotech startups, and another $3.8 million will be spent on training programs for life sciences entrepreneurs.
The city will be advised on this effort by a “Life Sciences Advisory Council,” a mix of industry veterans and academics co-chaired by former National Cancer Institute director and Nobel laureate Harold Varmus, and Vicki Sato, a former Biogen and Vertex Pharmaceuticals executive.
There are some lofty targets for LifeSci NYC: The plan is meant to create 9,000 life science jobs, 7,000 jobs in related fields, and another 7,400 construction jobs, and $2.5 billion in economic output per year; attract $6.5 billion in private investments; and add $1 billion in tax revenue. Those numbers may seem outrageous given NYC’s lack of biotech progress over the years, and there is a lot of work ahead for the city to see even a fraction of that benefit.
It’s important to note that these figures are long-term estimates, which is why De Blasio said Tuesday the initiative will have a “pretty modest impact” on NYC’s annual budget going forward. The job totals, for instance, are a target Springer said the NYCEDC hopes to see over the course of a decade as new space is developed and filled by companies. Same goes for the 3 million square feet of lab space. More immediately, the $10 million set aside for incubators could be doled in the near-term. And while the $300 million in tax credits—which will help defray property and other taxes—are pro-rated over 25 years, some of that money could be put to work quickly.
De Blasio said NYC is hoping for the same type of growth it has seen in tech, which was aided by early, “modest” investments a few decades ago. The NYC tech sector now has more than 300,000 employees, he said.
“[Life sciences] is a sector that could reach 100,000 jobs or more in this city if we make the right investments quickly, if we work with all of our partners aggressively, and we maximize our competitive advantage,” De Blasio said.