Massachusetts Biopharma Sees Rare Job Decline Amid Funding Constraints and Federal Uncertainty

CAMBRIDGE, MA (August 26, 2025) — For the first time in recent memory, Massachusetts’s biopharma sector experienced job losses in research and development (R&D) and biomanufacturing, according to MassBio’s 2025 Industry Snapshot. The report identifies the lowest level of venture capital (VC) funding since 2017 to Massachusetts-headquartered biotechs in the first half of 2025, coupled with changing federal and regulatory policies, is leading to difficult reductions in force.

The Industry Snapshot is an annual report benchmarking the Commonwealth’s biopharma industry against historic trends and competing clusters across employment, investment, drug development, and real estate.

Despite depressed funding levels, Massachusetts continued to capture nearly a quarter of all U.S. biotech VC funding, and the biopharma workforce demonstrated resiliency. Though it is unclear when investor confidence will return, Massachusetts is uniquely situated with an unmatched density of biotechs, veteran venture firms, well-capitalized global pharma, experienced and available talent, purpose-built innovation space, and government engagement to lead a historic recovery, says MassBio, an organization representing more than 1,700 members of the local life sciences ecosystem.

“Biotech is Massachusetts. Every day, our companies work to improve human health and deliver for patients, which is why it’s critical we navigate today’s headwinds with collaboration and resilience,” said Kendalle Burlin O’Connell, MassBio CEO and President. “This report shows how restrained funding is impacting hiring but also highlights that the Commonwealth’s longtime advantages—talent, partners, science, and infrastructure—position Massachusetts for a strong rebound once confidence returns. It is important that all players in this ecosystem re-commit to doing what we do best here in the Commonwealth: translate world-class science into companies, jobs, and cures.”

Investment slows, but Massachusetts remains resilient

While private funding remains constrained nationwide, Massachusetts held its ground as a global biotech leader. In the first six months of this year, the Commonwealth attracted 22.5% of all U.S. venture capital for biotech, second only to California (45%). No other state reached 4%.

Deal volume nearly matched last year (93 vs. 95), but total VC funding fell 17% year-over-year, with more than half of the dollars concentrated in the top 10 deals. Notably, 54% of venture capital flowed to companies outside Cambridge, demonstrating a healthy statewide ecosystem.

IPO activity remained sluggish, with just one Massachusetts debut so far this year. Meanwhile, mergers and acquisitions have been slow to regain momentum. Adding to the cautious climate, ongoing federal uncertainty around regulation and research funding continues to dampen investor confidence.

National Institutes of Health (NIH) funding to Massachusetts institutions declined last year, and early 2025 data suggest deeper cuts are on the horizon—threatening the foundation of early-stage biomedical research.

Jobs contract across R&D and manufacturing

The tight capital environment led to job losses in R&D and biomanufacturing, despite federal data showing a slight overall uptick to 117,108 biopharma jobs in Massachusetts.

• R&D employment declined by 1.7% in 2024, a smaller drop than California, Maryland, and New Jersey.
• Biomanufacturing jobs fell for a second consecutive year (-1.5%), even as Florida, New Jersey, and Texas posted strong gains. California also saw a sharp 4.2% contraction.

Pipeline strength signals long-term opportunity

Despite short-term turbulence, Massachusetts remains a global innovation hub. The Commonwealth represents 15.7% of the U.S. pipeline of drug candidates and 6.4% of the global pipeline, with particular strength in advanced modalities. (These percentages only include Massachusetts-headquartered companies, and not the significant R&D happening locally at companies with headquarters elsewhere.) This continued output is critical to U.S. leadership in life sciences innovation, even as China’s pipeline continues to expand—up 16.5% year-over-year, compared with 6.7% growth in Massachusetts and 3.4% nationally.

Massachusetts is well-positioned for a rebound with its concentration of investors and pharma partners and a new 10-year public-private commitment in the reauthorized Massachusetts Life Sciences Initiative. Continued support from policymakers and responsive programming from MassBio and partner organizations will be key to maintaining the state’s global leadership in life sciences and enabling local companies to advance therapeutics toward patients in need.

Read the full 2025 MassBio Industry Snapshot.

External Commentary

“When it comes to healthcare, higher education, and research, the Commonwealth of Massachusetts stands at the forefront of these industries. Massachusetts, the country, and the world benefit from the advances in medical research taking place in labs, universities, and hospitals throughout the state. I am eager to continue protecting what has been built here and to preserve the funding that has made breakthrough therapies and cures a reality.” — U.S. Representative Richard Neal, Massachusetts 1st Congressional District

“Massachusetts’s world-renowned life sciences sector produces lifesaving cures and creates good jobs every day. While federal funding cuts are threatening the foundations of medical discovery and the economic benefits that come with it, Massachusetts is committed to moving forward. With strong partnership between my administration, the Legislature, and industry leaders like MassBio, we are going to continue to support our life sciences industry and grow our competitive edge.” —  The Honorable Maura Healey, Governor, Commonwealth of Massachusetts

“We manufacture in Massachusetts because reliability and speed matter. At Alnylam, we believe discovery, development, and delivery should be closely connected, which is why we built our manufacturing capability near our headquarters. This proximity allows us to maintain control, move with velocity, and pivot quickly when priorities shift. The Massachusetts life sciences cluster also gives us access to a world-class ecosystem of partners in biotech, higher education, and finance. These relationships are essential in strengthening our community and innovation.” —  Tim Maines, Chief Technical Operations & Quality Officer Alnylam Pharmaceuticals

“The ideas generated in Massachusetts help defeat disease, save lives, create jobs, and launch new industries across the country and around the world. We are proud to be part of an incredible ecosystem of talent, creativity, and progress that’s powered by decades of long-term bipartisan investment in science and research aimed at improving human health.” —  Todd R. Golub, M.D., Institute Director, Broad Institute of MIT and Harvard

“Funding from the National Institutes of Health (NIH) is the lifeblood of Massachusetts’s biomedical ecosystem. At Boston Children’s, federal research investments have enabled our scientists to pioneer breakthrough treatments for childhood diseases while training the next generation of medical innovators. This funding doesn’t just advance pediatric care — it sustains Massachusetts’s position as the global epicenter for life sciences innovation. With every NIH grant invested in the Commonwealth, we unlock new frontiers in science and attract world-class talent that fuels breakthroughs that redefine what’s possible in medicine.” —  Kevin B. Churchwell, MD, CEO, Boston Children’s Hospital

“The venture landscape remains rocky – raising and recycling capital is harder than ever. But Massachusetts continues to stand out as a place where investors believe in both the science and the staying power of the ecosystem. That depth matters at a moment like this, and it’s why nearly $3 billion has been deployed so far this year. To return the growth, we need policy that helps capital move – at the earliest stages and through a productive M&A cycle. The Commonwealth remains safe ground for investors amid a turbulent period.” —  John Stanford, Founder & Executive Director, Incubate Coalition

“Healthcare is fundamentally a people business, and nowhere is this more evident than in Massachusetts, where purpose meets performance to drive global transformation. The remarkable concentration of innovation in this small region isn’t just reshaping our industry—it’s propelling the global drug development pipeline forward, revolutionizing how we deliver on our promises to patients worldwide.” —  Brian Foard, Executive Vice President, Head of Specialty Care, Sanofi

“GSK has continued to make investments in Massachusetts. As we discover and make vaccines and therapies for patients around the world, it is the Commonwealth that helps make us successful.” — Pei-Yong Shi, Vice President and Head of Viral Vaccines R&D, GSK

“Massachusetts offers an unparalleled environment for science-led companies to innovate and thrive. With its world-class academic institutions, rich talent pool, and deeply collaborative life sciences ecosystem, the atmosphere supports groundbreaking scientific discoveries. Expanding our presence in Kendall Square strengthens our commitment to this vibrant community and enhances our role in its future. It is where bold new ideas take shape, partnerships thrive, and the future of patient care is reimagined.” —  Sharon Barr, Executive Vice-President, BioPharmaceuticals R&D, AstraZeneca

About MassBio

MassBio is the driving force behind Massachusetts’s life sciences ecosystem, supporting innovation and industry growth by offering best-in-class resources to over 1,700 member organizations at all stages of the biopharma lifecycle. Founded in 1985, MassBio aspires to extend Massachusetts’s impact as the global center of excellence in biomedical breakthroughs. Through strategic cost-saving initiatives, robust business partnerships, educational and networking opportunities, and proactive advocacy, MassBio empowers its members to launch the next generation of medical advancements to deliver the cures and therapies that enhance patient lives. www.massbio.org