Scrambling for Talent and More Office Space, Life Sciences Companies Relocate
For the last three years, Totus Medicines, a chemical biology and artificial intelligence biotech company in Cambridge, Massachusetts, has operated in a shared laboratory space at LabCentral in Kendall Square. However, the company has experienced such massive growth that it announced it is moving its headquarters to Emeryville, California.
"We are thrilled to announce our move to the Bay Area, a transition that sets the stage for our planned rapid growth," said Totus CEO and founder Neil Dhawan. "The Bay Area is a hub of innovation with a wealth of high-impact talent. I am confident that this new base for our growing team will provide a solid foundation as we further advance and scale our drug discovery platform."
In California, Totus plans to build a 35,000-square foot office at the Hollis Business Center. The new space will accommodate more headcount as well as provide resources to support the company's goal of entering clinical trials this year.
Totus isn't alone. Dozens of life sciences companies are relocating, and many of them are citing the same reasons for doing so. As the "great resignation" continues, biotech and biopharma companies are struggling to find qualified talent. Venture capital was also at an all-time high in the healthcare and biopharma spaces, so companies are using the cash to relocate to bigger spaces that can accommodate more employees and production capacities.
Another company relocating is Entrada Therapeutics, although this move is far less drastic. Entrada, an intracellular therapeutics company currently located on Tide Street in Boston, is moving just down the street. The company is leasing new space in the Seaport District. As Entrada is growing, it signed on for over 80,000 square feet of space in Boston's Innovation and Design Building to house its new corporate headquarters.
Clinical-stage biotech startup Wugen is also not moving far. Currently located on Duncan Avenue in St. Louis, the company announced two weeks ago that it's staying in the same city, but moving to the first-floor space on Forest Avenue. The new 18,000-foot space will accommodate Wugen's growing number of employees and will support its efforts to develop oncology treatments.
For years, Germany-based Miltenyi Biotec has had its U.S. headquarters in Auburn, California, but the company recently announced that it will be moving to Gaithersburg, Maryland. Miltenyi already has a facility there, so it will be expanding that space to accommodate more than 130 full-time jobs and increase manufacturing capacity.
Miltenyi's move is also a smart financial one. Gaithersburg is located in an area called "DNA Valley," where genetics-focused biotech companies continue to start, receive venture capital funding, and be acquired by larger companies. The move also gives Miltenyi access to a sharp talent and research market near Johns Hopkins University.
Armata Pharmaceuticals is staying close to its previous location in California, but with such little space in the Los Angeles area, the company had to get creative. In November, Armata decided to lease an old industrial building near Marina del Rey with plans to turn it into a massive manufacturing facility with office space for research and development. The new site will have over 56,000 square feet of space compared to the company's current Marina del Rey office on Glencoe Avenue, which is only 35,000 square feet.
Stream Realty Partners represented Armata Pharmaceuticals in the lease. Tim Dwight, from Stream Realty, said, "This new facility will allow them to expand their operation with state-of-the-art equipment while attracting top-tier talent."
As several of these companies mentioned, the relocations are motivated by attracting top-tier talent, expanding office space and wanting connections to venture capital funding and research facilities. Usually, those factors draw biotech companies to areas like the East Coast or the Bay Area. However, North Dakota is trying to change that narrative.
North Dakota recently began offering incentive programs, such as grants and loans, to bring biotechnology companies to the area. The Bioscience Association of North Dakota, part of the University of North Dakota Center for Innovation, was developed in 2010 to attract biotech companies to the state. The Bioscience Association says that North Dakota holds several financial advantages, including low corporate tax rates, cheap property, low gasoline taxes and low cost of living, on top of the government incentives.
With some impressive talent coming out of the University of North Dakota's biology programs, Chicago-based Lincoln Therapeutics was one of the first companies to relocate to North Dakota, and the state is hoping that many more will follow suit as the cost of living continues rising in the United States and many companies continue scrambling for qualified employees.