Philadelphia is recognized for its rich history, sports culture, and culinary delights, but it is increasingly becoming notable for its advancements in Cell and Gene Therapy. Due to a confluence of factors, this city, considered the birthplace of cell and gene therapy, is on track to emerge as one of the leading biopharma centers in the United States in the coming years. Estimates from officials and industry insiders indicate that this growth will continue to accelerate, solidifying the city’s reputation as a pivotal biopharma ecosystem.

In October, Genetic Engineering and Biotechnology News ranked Philadelphia seventh among the top ten U.S. biopharma clusters.

> “The convergence of multiple macroeconomic factors is triggering an unprecedented demand for laboratory space, manufacturing capacity, and CDMO services, especially in advanced therapies. The life sciences and biomedical ecosystem in Philadelphia is uniquely positioned to meet this market demand, and The Discovery Labs enhances speed to market by providing ready-to-use life sciences real estate, manufacturing capabilities, and pharmaceutical services.” > — Audrey Greenberg, Executive Managing Director of The Discovery Labs

A Flourishing Industry in Its Early Stages Before delving into why numerous organizations are establishing operations in Philadelphia, it’s essential to understand the current landscape of the Cell & Gene Industry and the region’s significance in its development.

Emerging over three decades ago, the Cell & Gene Industry was largely propelled by researchers at the University of Pennsylvania. Initial attempts to introduce new gene therapies yielded mixed outcomes, with early clinical trials experiencing setbacks and a wrongful death lawsuit hindering progress by the early 2000s.

Despite these challenges, Glybera, a gene therapy for a rare inherited disorder leading to severe pancreatic inflammation and intense abdominal pain, was the first to transition from laboratory research to commercialization. However, its hefty price tag of $1 million proved unsustainable, leading to its discontinuation five years post-approval in 2012.

Nevertheless, research at Penn persisted, culminating in the 2017 FDA approval of Kymriah, the first CAR T-cell therapy. This innovative treatment utilizes a patient’s T-cells to combat cancer.

Currently, only four CAR-T cell therapies have received FDA approval: 1. tisagenlecleucel (Kymriah; Novartis) 2. axicabtagene ciloleucel (Yescarta; Kite Pharma, Gilead Sciences Inc) 3. lisocabtagene maraleucel (Breyanzi; Juno Therapeutics) 4. brexucabtagene autoleucel (Tecartus; Kite Pharma, Gilead Sciences Inc)

Numerous promising therapies are under clinical development, and with successful FDA approvals, organizations are adopting more transparent commercialization strategies, backed by the expertise required to deliver these treatments to patients.

The Cell & Gene therapy sector is particularly thrilling, as it is in its infancy and has the potential to address diseases that claim countless lives each year.

Philadelphia stands to gain significantly and assume a leading role in this technological transformation due to several factors: 1. Cost of living 2. Talent Pool 3. Corporate Clusters 4. Innovation 5. Capital 6. Location 7. Tax Incentives

Cost of Living Currently, Boston, San Francisco, and New York/New Jersey dominate the Cell & Gene industry. However, their future dominance is not guaranteed. Describing San Francisco and Boston as excessively expensive would be an understatement. With home prices nearing a million dollars for modest accommodations, many professionals find these locations inaccessible.

While these mature talent clusters have advantages, their exorbitant rents and living costs pose significant challenges to companies exploring these markets. High real estate prices consume vital startup capital, delaying the commercialization of therapies and raising costs for patients.

In contrast, Philadelphia offers affordable real estate and readily available laboratory space. The region provides a more accessible cost of living and business environment, complemented by a robust public transit system and a temperate Mid-Atlantic climate, making it an attractive destination for innovation.

Talent Pool Philadelphia is home to a rich array of universities and life science companies. The extensive talent pool in the greater Philadelphia area draws many organizations to establish operations here. Over 70,000 professionals in the region possess life sciences experience, with nearly 10,000 specializing in cell and gene therapy.

Moreover, renowned institutions like the University of Science, University of Pennsylvania, and Drexel collaborate with industry leaders to create and implement next-generation educational programs that serve as vital talent pipelines.

Corporate Clusters Philadelphia boasts a diverse array of organizations, including more than 30 companies specializing in cell and gene therapy and 60 laboratories based in the region. Furthermore, 80% of the world's largest pharmaceutical firms, such as GlaxoSmithKline, Bristol Myers Squibb, Merck, Sanofi, and Johnson & Johnson, operate here, bringing significant manufacturing expertise that attracts new organizations.

Notable Cell & Gene companies in Philadelphia include: 1. Iovance 2. Adaptimmune 3. Wuxi 4. GSK 5. Passage Bio 6. Spark Therapeutics 7. Amicus Therapeutics 8. Biomeme 9. Carisma Therapeutics 10. Bioquark 11. Avid Radiopharmaceuticals 12. Allevi 13. BioDetego 14. ExpressCells 15. Context Therapeutics

Innovation Institutions like the University of Pennsylvania, Children’s Hospital of Philadelphia, and Jefferson Health are home to leading scientific figures such as Dr. Carl June and Dr. Jim Wilson, who have pioneered the first FDA-approved Cell & Gene therapies.

The region features four pharmacy schools and seven medical schools, with one in every six doctors nationwide having trained here. One of the primary challenges for emerging Cell & Gene organizations is finding adequate lab and manufacturing spaces for therapy development.

Organizations like The Discovery Labs are addressing these challenges by offering over 2.5 million square feet of laboratory and manufacturing space, along with over 700,000 square feet of cell and gene therapy CDMO suites. These facilities provide essential support and services, including development, manufacturing, testing, and analytics to meet soaring demand.

Capital Philadelphia continues to attract substantial private investment, particularly in Cell & Gene research and development. The life sciences sector in Philadelphia experienced a record number of initial public offerings in 2020, with six companies raising nearly $70 million in IPOs.

In terms of rankings, the greater Philadelphia area holds the sixth position in venture capital funding, seventh in jobs and laboratory space, and eighth in funding from the National Institutes of Health.

The region has witnessed a 210% increase in venture capital for life sciences from 2013 to 2018, alongside the first FDA-approved gene therapy and the first approved cell therapy. Local institutions, such as the University of Pennsylvania, have pledged up to $50 million to support local researchers and medical professionals in establishing life sciences companies near its West Philadelphia campus.

Location Philadelphia offers essential access to an international airport equipped with cold chain storage vital for autologous cell therapies and advanced therapeutics and vaccines. Local authorities and organizations, including The Philadelphia Chamber of Commerce, have outlined plans to expand the Greater Philadelphia region’s role as a hub for Cell & Gene therapy and related sectors (such as immune health, vaccines, and oncology) through coordinated efforts to attract talent, businesses, and investors.

The Chamber of Commerce has partnered with the University City Science Center and the University City District to conduct a comprehensive workforce needs assessment and action plan. A recent analysis projects employment growth in these sectors in the Philadelphia area by at least 35% to 136% over the next decade, translating into nearly 2,000 to over 7,600 new jobs. Additionally, critical development areas like The Navy Yard are expected to support up to 18.5 million square feet of development, 30,000 jobs, and over $3 billion in private investment in the coming years.

Tax Incentives The potential tax savings for Cell & Gene organizations that establish operations in Keystone Opportunity Areas (KOZ) is often a crucial factor in their decision-making process. While the savings vary based on the legal structure and revenue generated in the KOZ, analyses indicate annual savings typically range from $10 to $20 per square foot.

Depending on the selected KOZ—especially the Navy Yard—organizations can conserve capital and expedite their research and development efforts.

COMMONWEALTH OF PENNSYLVANIA ABATEMENTS - PA Corporate Net Income Tax - PA Personal Income Tax - PA Capital Stock/Foreign Franchise Tax - PA Insurance Gross Premiums Tax - PA Bank Shares Tax - PA Mutual Thrift Institutions Tax

CITY OF PHILADELPHIA ABATEMENTS - Philadelphia Business Privilege Tax - Philadelphia Nets Profits Tax - Philadelphia Sales & Use Tax - Philadelphia Real Property Tax - Philadelphia Use & Occupancy Tax

Hurdles and Opportunities The primary challenges currently facing Cell & Gene companies involve access to development, manufacturing capabilities, and talent. Presently, the demand for manufacturing in the cell and gene therapy sector exceeds supply by a ratio of five to one. This manufacturing shortfall is expected to increase fifty-fold over the next five years as more startups enter the market.

The necessary talent, expertise, equipment, and consumables for running GMP processes are also limited. Only a handful of organizations have successfully developed, launched therapies, and obtained FDA approval.

Overcoming these challenges in the coming years will require the development and enhancement of regional hubs like Philadelphia, which provide a comprehensive array of incentives while offering affordable real estate, access to funding, and a strong pipeline of skilled professionals.

The next few years are likely to witness the emergence of transformative therapies, improving access to these treatments. Philadelphia is positioned to play an essential role in the ongoing evolution of the Cell & Gene industry.