Eli Lilly’s $700M RNA Bet In Boston Seaport Signals Focus On Future Tech
Pharmaceutical giant Eli Lilly is bringing a $700M research facility to the Boston Seaport, a move that signals a strategy shift and a nine-figure vote of confidence on the future direction of biotech.
The Eli Lilly Institute for Genetic Medicine, which is expected to open in 2024, will be a 334K SF new RNA-focused facility in a 12-story building developed and operated by Alexandria Real Estate Equities. The project signifies the importance of a new generation of therapies for the industry, and the competition for talent and startups that will likely consume large pharmaceutical companies.
Along with mRNA pioneer Moderna’s under-construction new Cambridge HQ — also an Alexandria project — Lilly's move highlights the appetite the industry has to bet big on new techniques and technology, and to do it in the heart of Boston.
“It’s a defining moment when a major pharma company declares this is going to be a major beachhead for their future,” Longfellow Managing Director of Research Lauren Gilchrist said. “It’s really exciting news, and will spur additional clustering in the Seaport.”
Eli Lilly said in a statement that the facility, which will also include lab space for startups, will focus on genetic medicines, and employ more than 250 research biologists, chemists and data scientists within five years. Scientists will work in tandem with a team at Prevail Therapeutics, a gene therapy pioneer and 2020 Lilly acquisition based in New York City.
“I think big pharma has been watching the cell and gene therapy revolution,” Colliers Executive Vice President for Life Sciences and Healthcare Joseph Fetterman said. “It’s fascinating as these cell and gene therapies gain traction and momentum, and it does call attention to how important this segment of the market is.”
The investment in RNA technology comes as the wonders of the mRNA vaccines have been headline news for nearly two years. Their success has driven investors, who already have poured record amounts of funding into startups, to see mRNA and other emerging technologies as great bets worthy of large funding commitments.
“From a 35,000-foot perspective, Covid only increased the attention on our space,” said Audrey Greenberg, co-founder of the Center for Breakthrough Medicine in Philadelphia, an advanced research facility for cell-and-gene therapy. “It demonstrated the [Food and Drug Administration's] ability to fast-track therapies, and we’re thrilled there’s more attention, since a rising tide raises all ships.”
While happy to see the extensive funding for research, Derek Lowe, a drug discovery chemist and author of In the Pipeline, a blog that covers vaccines and biomanufacturing, cautions against investor overexuberance in mRNA research. The vaccines worked out far better than most hoped, he said, but part of that success was due to previous research pointing scientists where to go — in this case, to structure the mRNA vaccines around attacking the coronavirus spike protein.
For other therapies and vaccines, the treatment strategy isn’t as obvious. Researchers have tried antigen after antigen to tackle HIV and malaria, often spoken as future mRNA vaccine targets, without success. In neuroscience, one of Eli Lilly’s areas of focus, longtime knowledge about cystic fibrosis and ALS hasn’t transferred into therapeutics.
“RNA technology allows you to try out your ideas faster, which isn’t nothing,” Lowe said. “But investors outside the field who think we have it all figured out, well, we don’t. RNA isn’t going to be a magic wand.”
As one of Eli Lilly’s first big steps into the RNA field, Lowe believes it is a huge vote of confidence in the technology that such a recognized name plans to use this new tool to tackle neuroscience and diabetes.
“I’ve been in the industry over 30 years, and haven’t been in a period when all these new modes of treatments are all hitting at the same time,” Lowe said.
A similar case study can be seen in the growth of Spark Therapeutics in Philadelphia. The cell and gene therapy pioneer, which was acquired by Roche for $4B in 2019, recently announced news of a $575M manufacturing facility. It’s an investment that seems likely to cause increased clustering around existing facilities in Philly’s University City neighborhood, something that Eli Lilly’s announcement seeks to seed in the Seaport.
A similar look forward impacted the decision to locate a significant research facility in the Seaport.
“The Boston area is one of the world’s foremost center’s for RNA and DNA research,” said Eli Lilly spokesperson Andrew Adams. “Lilly went through a rigorous process in selecting the Seaport site. It is worth noting that the Seaport is the second largest cluster of lab space in the region, which facilitates collaboration, and we believe it will be an attractive location as we recruit new talent.”
According to Longfellow’s Gilchrist, the location is a perfect fit for a company thinking about future growth. The submarket has seen roughly 115K SF of absorption for the last few years, so a 300K SF lease makes a big impression. And Longfellow forecast 8M SF of lab space in the pipeline through the end of 2027.
The project's site along Fort Point Channel had been previously planned as part of another major economic development project for the city: General Electric Co.'s new corporate headquarters.
GE had envisioned the property as one of two buildings on its campus when it decided to relocate from Connecticut in 2016. After the company began to shrink amid financial struggles, its new CEO, Larry Culp, decided to scrap the second building and sell the site, the Boston Globe reported.
Eli Lilly becomes a big player in the neighborhood with this lease, and it attracts the attention of other startups, which may be eyeing an acquisition from the larger firm and decide to locate nearby. Corporate pharma has focused on M&A as opposed to organic growth in recent years, says Gilchrist, often acquiring startups with tech and therapeutics in advanced stages of regulatory approval. Setting up shop in a burgeoning life sciences market can create a talent magnet. And it doesn’t hurt that the Seaport District, filled with new restaurants and residential projects, offers a live-work-play experience that employees prefer. While the science may be taking a new turn, the talent imperative in biotech remains key.
“Talent is the most expensive part in a corporation’s budget,” Gilchrist said. “You spend more on that than occupancy costs, and real estate becomes a rounding error.”