To check the pulse on the U.S. biopharma industry, few states are better situated than the life sciences hot spot that is Massachusetts.
But a recent snapshot from a local trade organization suggests that even the Bay State isn’t immune to the funding slowdowns and policy shifts that have put pressure on the industry over the past year and a half.
Massachusetts boasted 117,108 biopharma employees in 2024, according to a new report from the Massachusetts Biotechnology Council (MassBio). While that number was up slightly from the roughly 117,000 workers tallied in 2023, biopharma R&D and manufacturing layoffs continually crept into the picture last year.
MassBio attributed those cuts to a broader “industry-wide slowdown” caused by a dearth of venture capital funding deals over the last 18 months.
“There were some indications [last year] that interest rates would fall, a few more exits would begin to happen, funding would loosen up, and M&A activity would return to a healthy level,” MassBio's CEO, Kendalle Burlin O'Connell, wrote in a foreword to the report. “That did not happen.”
More recently, the Trump administration’s policy machinations around the FDA, the National Institutes of Health (NIH), drug pricing and potential pharmaceutical import tariffs have “caused a freeze, rather than the expected thaw, across the biopharma landscape,” O’Connell added.
As for the workforce reductions, which occurred before Trump took office, Massachusetts experienced a “significant decline” in its R&D workforce last year. All told, the state lost roughly 1,100 research employees in 2024 following “years of steady growth,” MassBio noted in its report.
That decline in R&D workers held true across many other U.S. research hubs in 2024, with New York, Pennsylvania and Florida some of the only states to see their R&D staffing numbers go up last year, according to July data from the U.S. Bureau of Labor and Statistics.
Meanwhile, Massachusetts—which already ranks low on production employment among other industry hot spots in the U.S.—saw its total number of biomanufacturing workers shrink 1.5% from 10,264 in 2023 to 10,108 last year.
Nevertheless, companies continue to build out research and production operations in the state.
Looking at the situation from an infrastructure perspective, 1.1 million square feet of new lab and manufacturing space was added in Massachusetts last year, bringing the industry’s total inventory in the state to 63.2 million square feet. On the flip side, lab vacancy rates in Cambridge and Boston “remained high” in 2024 at 22.9% and 38.3%, respectively.
Those vacancies pose a “short-term challenge for owners” but could be beneficial to the greater Massachusetts biopharma ecosystem in the long run, MassBio said.
A vicious funding cycle
If the vacancies and job cuts reported in Massachusetts last year are a symptom of broader industry issues, then the ongoing constriction of the biopharma funding environment is almost certainly the leading cause.
In the first half of 2025, Massachusetts biopharmas collected $2.75 billion from venture capital investments, down 17.1% compared to the same period in 2024, MassBio’s report states. More than half of the VC cash awarded to Massachusetts-headquartered biopharmas so far in 2025 was concentrated within the top 10 deals.
Funding will likely remain tight until greater economic confidence enables biopharma companies to pull off more initial public offerings and M&A deals, MassBio’s O’Connell wrote in the report.
Massachusetts companies logged just one biopharma IPO in the first two quarters of 2025 and six total in 2024. For comparison, 25 companies based in the state went public during a high point for the industry in 2021, according to data from Pitchbook.
M&A activity has also been “muted” in the first half of the year, MassBio suggested. Through 2025’s second quarter, 14 Massachusetts biopharma companies were acquired for a disclosed total of $7.6 billion—a far cry from the 17 deals totaling $28.9 billion that were logged at the same point last year.
Still, the latest data collected and parsed by MassBio doesn’t yet account for a “flurry of deals” since the end of the second quarter, O’Connell pointed out. In July alone, six Massachusetts biopharma companies were acquired for more than $11 billion, the report notes.
Policy shifts, and a rival emerges
In terms of federal dollars, Massachusetts received 9.3% of all NIH funding in 2024, which is the same proportion of federal funding it received in 2023. That said, the total amount of funding fell 1.4% to around $3.46 billion, which MassBio’s O’Connell referred to as “an ominous decline that preceded the announced and proposed cuts this year.”
The potential fallout from federal funding cuts “cannot be overstated,” according to O’Connell.
Under the second Trump administration, the NIH—the country’s medical research agency—has slashed an estimated $12 billion in research funding. The government is pulling funding for science that doesn’t align with the president’s executive orders, which declare that the U.S. government only recognizes two sexes and demand that diversity efforts across industries and organizations be dismantled.
Most recently, the Supreme Court upheld research funding cuts totaling $783 million, reversing a lower court’s decision that required the NIH to keep funding the terminated grants.
The administration is also attempting to squeeze future funding for NIH with a proposed federal budget for 2026 that would reduce funds by $17.97 billion.
In its report, MassBio warned that if federal funding continues at the pace it has so far this year, Massachusetts is on track to receive nearly $464 million less from the NIH in 2025 than it did in 2024.
“Teams that lose grants get poached by foreign clusters,” O’Connell said. “Disruptions at one end of the scientific pipeline will be felt at the other.”
That threat of foreign competition should not be overlooked, according to the report.
While Massachusetts outpaced the rest of the U.S. in terms of pipeline growth between July 2024 and July 2025 at 6.7%, China’s total pipeline growth jumped nearly 17% over that same span, MassBio noted, citing data from Evaluate. The figures look at the number of projects in development at companies based in the various geographies.
While MassBio’s report focuses on the organization’s home state, the issues revealed in the snapshot hold true across many biopharma hubs and the U.S. more broadly.
And although the policy threats introduced under the Trump administration are more recent and acutely felt, tight funding and job cuts have plagued U.S. biopharma outfits big and small over the past few years.
In fact, industry layoffs in May reached a four-year high, with Fierce Biotech recently reporting that at least 14 startups have closed their doors so far this year.
Still, at least some companies—and especially smaller biotech outfits—are starting to adjust to a “new normal” Omar Khalil, managing director at early-stage investor Santé Ventures, told Fierce Biotech earlier this month.