2025 pulled into focus the cracks in Philly\u2019s life sciences ecosystem.<\/p>\n
Philly has the talent, research institutions and collaboration to build a strong life sciences community. That\u2019s helped the region build a reputation<\/a> in the sector, but stakeholders say there\u2019s not enough local funding to keep companies growing here.\u00a0<\/p>\n With exciting partnerships started this year and more opportunities coming in 2026, capital is needed if Philadelphia wants the sector to reach its full potential.\u00a0<\/p>\n \u201cThe fact that we\u2019ve got excellent research capabilities and spin-off capabilities in Philadelphia speaks to the intellectual horsepower,\u201d Ira Spector, CEO of SFA Therapeutics, told Technical.ly, \u201cbut Philadelphia does not have a very well-developed venture capital infrastructure.\u201d\u00a0<\/p>\n This year, Philly attracted major outside interest. Most recently, global pharmaceutical company Eli Lilly announced plans to open a new Lilly Gateway Labs in Center City<\/a>, an incubator for early-stage biotech companies.\u00a0<\/p>\n \u201cAccess to capital is a critical factor in moving forward, and that\u2019s been a frustrating thing for us.\u201d<\/p>\n Ira Spector, CEO of SFA Therapeutics<\/p>\n Other national orgs have taken steps to increase their regional presence, too. Thermo Fisher Scientific, a global equipment and services company, announced a partnership and opened its second Advanced Therapies Collaboration Center<\/a> with BioLabs Philadelphia<\/a>.\u00a0<\/p>\n New local resources sprouted, catering directly to startups\u2019 VC needs. The HiveBio accelerator<\/a>, which supports minority founders in the life sciences space, launched this year. After wrapping up its pilot this month, the program reported successful fundraising efforts for most of its cohort companies.\u00a0<\/p>\n These wins happened against a backdrop of internal company turmoil in 2025. The region\u2019s cell and gene therapy standout Spark Therapeutics<\/a> took a hit when its parent company Roche designated it as a financial loss<\/a>, eventually laying off about half of its employees<\/a>. Other companies like Century Therapeutics<\/a> and Adaptimmune<\/a> announced significant layoffs this year, too.\u00a0<\/p>\n For life sciences \u2014 and the entire startup ecosystem \u2014 venture capital has also become harder to come by as the market fluctuated throughout 2025<\/a>.\u00a0<\/p>\n Developing a drug or therapy and bringing it to market is extremely expensive work. Oftentimes, investors don\u2019t want to give money to companies that are still high risk, but it takes money to support development to derisk the product, Spector said.\u00a0<\/p>\n Without that cash, Philly could lose its rising stars \u2014 like GEMMA Bio<\/a>, a standout that raised $34 million this year \u2014\u00a0to nearby life sciences hotspots like Boston. While Philly consistently lags behind Boston, San Diego and San Francisco<\/a>, it still ranks high for life sciences talent<\/a>, which continues to attract new companies.<\/p>\n \u201cPhilly is finally starting to step on the map,\u201d Rakesh Shah, founder of Newtown-based medical device company DRS.LINQ<\/a>, said. \u201cWe have so much talent in the biomedical engineering and med tech space. It\u2019s just we need to harness that energy, bring it all together.\u201d\u00a0<\/p>\n A well-connected community, but few investors to maintain it<\/p>\n Founders are already looking for major investments outside of Philly, as it\u2019s often their only option, according to Jean Cho, CEO of Trevarx Biomedical<\/a>.\u00a0<\/p>\n Jenkintown-based biotech company SFA Therapeutics<\/a> is experiencing this firsthand. As it raises its next funding round, the majority of the money is coming from investors outside the region, CEO Spector said.\u00a0<\/p>\n The company is tied to Philly because of its affiliation with Temple University<\/a> and investments from Ben Franklin Technology Partners<\/a>. It\u2019s also integrated with Pennsylvania\u2019s life sciences ecosystem, attending programming hosted by orgs like Life Sciences PA<\/a>, although there aren\u2019t usually a ton of investors at those events, Spector said.\u00a0\u00a0<\/p>\n The lack of local funding has caused Spector to consider what the company\u2019s future would look like in other parts of the country. In Boston, for example, the VC ecosystem is very well developed, he said, and the company has raised money from investors there.\u00a0<\/p>\n \u201cThe question is, where\u2019s the nexus of capital?\u201d Spector said. \u201cYou would think that capital is global and in some cases it is, but it\u2019s nice if there\u2019s a network in your own region.\u201d\u00a0<\/p>\n Without money, the region\u2019s strengths, like a strong network of universities and research institutions and ample lab space, won\u2019t do as well, according to Spector. Startups need that direct VC support, especially as the federal grants they once heavily relied on slip away<\/a>.\u00a0<\/p>\n A bright spot: Millions raised by just one accelerator<\/p>\n Despite the lack of a strong local investor network, Philly isn\u2019t alone in having a VC slowdown.\u00a0<\/p>\n In general, the life sciences sector has been struggling this year<\/a>, especially for early-stage companies. Since the IPO market for biotech companies has slowed down, investors aren\u2019t making their money back and are focusing instead on existing later-stage firms.<\/p>\n But there are some programs in the city helping founders to secure much-needed investments.\u00a0<\/p>\n The HiveBio accelerator exceeded its first-year goal, helping eight out of 10 companies raise a total of $3.6 million during the nine-month program, Tia Lyles-Williams, founder and CIO of HiveBio, told Technical.ly. Plus, a lot of that money came from local investors like Ben Franklin Technology Partners and Robin Hood Ventures, she said.<\/p>\n The key, she said, was giving founders as many opportunities as possible to have face time with investors.\u00a0<\/p>\n \u201cThey had the opportunity, behind closed doors, with these mentors to be totally transparent about what they know, what they didn\u2019t know, and what they needed,\u201d she said. \u201cThese mentors and these experts in our local investment community delivered on that, they received it, implemented it, and that\u2019s how these checks got written.\u201d\u00a0<\/p>\n Medical device company DRS.LINQ secured almost $500,000 from various sources through the program, according to founder Rakesh Shah. The opportunities to get in front of people and explain the company and its challenges were extremely valuable, he said.\u00a0<\/p>\n In one case, investors were introducing founders to other potential investors. Startup Ajaya Bio<\/a> got investment from Bio Advance Capital<\/a>, which then introduced them to Ben Franklin Technology Partners for a joint investment, Lyles-Williams said.\u00a0<\/p>\n Outside of programs like these, the state and the city could also do more to incentivize investors to support Pennsylvania companies, like tax benefits, Spector said. Local governments should want to help companies like SFA Therapeutics grow here and create job opportunities in the region.\u00a0<\/p>\n \u201cThis is an industry that runs on capital,\u201d Spector said. \u201cIt requires capital to prove that a drug or a therapeutic or a diagnostic or device works, and that means that access to capital is a critical factor in moving forward, and that\u2019s been a frustrating thing for us.\u201d<\/p>\n