Is the Life Science Industry poised for growth in 2024? We are optimistic.

The Life Sciences market evolution prevails. The record-breaking 2021 market activity, while full of pandemic fears, was underpinned by biotech innovation and investment opportunities. Private investment supported by government initiatives fueled growth in mRNA vaccines, personalized medicines, and novel therapies. Strong clinical development pipelines within an evolving clinical trial landscape provided funding opportunities with no end in sight. Then reality hit with two years of stagnation persisting, driven by high inflation and cautionary investment in the post pandemic biotech market. Yet we remained optimistic in our outlook, predicting a resilient market would return, and here we are in Q2 2024.

Towards the end of 2023 the market showed renewed life with strengthening M&A, IPO, and PE/VC activity. The surge in M&A deals as companies bolstered pipelines, entered new therapeutic arenas and protected revenue streams from drug patent expiration and generic drug approvals. The first quarter of 2024 saw pre-pandemic levels of IPO activity highlighting investor confidence across multiple biopharmaceutical platforms, a clear bounce back from the start of 2023. While growth lacks in the VC market, it remains stable, with a cautionary focus on successful clinical trials versus speculative investment of the past. Positive, clear growth opportunities exist within the strong backlog of FDA applications and approvals.

The indices used to gauge market strength paint an optimistic picture for 2024—we are seeing the same in the engineering and construction industry. Customers continue to discuss near and long-term capital to support research and development and small and large-scale manufacturing expansions. Though growth opportunities continue to be regionally focused, a market sense of hot or not, there is indication of emerging market expansion on the horizon. From the lab bench to construction site, the Life Sciences industry remains resilient and poised for continued growth in 2024 and beyond.

While the VC market is thawing and the ability to obtain startup funding is increasing, the excess capacity in the commercial real estate market will absorb much of the new startup demand. Massachusetts and California vacancy rates will likely take at least a year or two to normalize if the growth over the last quarter is maintained. Less established and emerging markets are expected to build at roughly the same pace moving forward.

The traditional R&D lab space requirements are changing. Advances in lab equipment automation, benchtop technology, and a challenge of typical program of areas is leading to lab support, bench, and office enhancement. While the space for researchers may be declining, we are seeing direct effects such as an increase in power requirements for the same square footage of space.

New cell & gene therapy project starts have stalled, aligning with previous market projections but far from 2021 expectations. Regardless, there is a tremendous amount of therapy development around gene editing, the recent FDA approval of these therapies and excitement around long-term impact to patient populations creating overall market optimism.

We continue to see strength in manufacturing at both small and large-scale, but the growth is pocketed geographically. Big Pharma continues to bring late-stage products closer to market with much of the larger expansions driven by strength within the obesity and weight loss therapies market. In addition, there is a sense of resurgence in contract manufacturing (CDMO) activity in the U.S. after the last couple years of market flatness.

AI and Digital Twin impacts in early drug development is a hot topic. The ability to analyze big data is ever increasing the customized design and testing of compounds virtually, at a fraction of the traditional cost and schedule.

Ongoing investment from private and government agencies combined with expanding collaboration between the biotech, universities, and healthcare markets is exponentially increasing the ability to virtually predict the efficacy of new therapies. It is truly an exciting time.