2025 pulled into focus the cracks in Philly’s life sciences ecosystem.
Philly has the talent, research institutions and collaboration to build a strong life sciences community. That’s helped the region build a reputation in the sector, but stakeholders say there’s not enough local funding to keep companies growing here.
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.
“The fact that we’ve got excellent research capabilities and spin-off capabilities in Philadelphia speaks to the intellectual horsepower,” Ira Spector, CEO of SFA Therapeutics, told Technical.ly, “but Philadelphia does not have a very well-developed venture capital infrastructure.”
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, an incubator for early-stage biotech companies.
“Access to capital is a critical factor in moving forward, and that’s been a frustrating thing for us.”
Ira Spector, CEO of SFA Therapeutics
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 with BioLabs Philadelphia.
New local resources sprouted, catering directly to startups’ VC needs. The HiveBio accelerator, 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.
These wins happened against a backdrop of internal company turmoil in 2025. The region’s cell and gene therapy standout Spark Therapeutics took a hit when its parent company Roche designated it as a financial loss, eventually laying off about half of its employees. Other companies like Century Therapeutics and Adaptimmune announced significant layoffs this year, too.
For life sciences — and the entire startup ecosystem — venture capital has also become harder to come by as the market fluctuated throughout 2025.
Developing a drug or therapy and bringing it to market is extremely expensive work. Oftentimes, investors don’t want to give money to companies that are still high risk, but it takes money to support development to derisk the product, Spector said.
Without that cash, Philly could lose its rising stars — like GEMMA Bio, a standout that raised $34 million this year — to nearby life sciences hotspots like Boston. While Philly consistently lags behind Boston, San Diego and San Francisco, it still ranks high for life sciences talent, which continues to attract new companies.
“Philly is finally starting to step on the map,” Rakesh Shah, founder of Newtown-based medical device company DRS.LINQ, said. “We have so much talent in the biomedical engineering and med tech space. It’s just we need to harness that energy, bring it all together.”
A well-connected community, but few investors to maintain it
Founders are already looking for major investments outside of Philly, as it’s often their only option, according to Jean Cho, CEO of Trevarx Biomedical.
Jenkintown-based biotech company SFA Therapeutics 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.
The company is tied to Philly because of its affiliation with Temple University and investments from Ben Franklin Technology Partners. It’s also integrated with Pennsylvania’s life sciences ecosystem, attending programming hosted by orgs like Life Sciences PA, although there aren’t usually a ton of investors at those events, Spector said.
The lack of local funding has caused Spector to consider what the company’s 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.
“The question is, where’s the nexus of capital?” Spector said. “You would think that capital is global and in some cases it is, but it’s nice if there’s a network in your own region.”
Without money, the region’s strengths, like a strong network of universities and research institutions and ample lab space, won’t 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 bright spot: Millions raised by just one accelerator
Despite the lack of a strong local investor network, Philly isn’t alone in having a VC slowdown.
In general, the life sciences sector has been struggling this year, especially for early-stage companies. Since the IPO market for biotech companies has slowed down, investors aren’t making their money back and are focusing instead on existing later-stage firms.
But there are some programs in the city helping founders to secure much-needed investments.
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.
The key, she said, was giving founders as many opportunities as possible to have face time with investors.
“They had the opportunity, behind closed doors, with these mentors to be totally transparent about what they know, what they didn’t know, and what they needed,” she said. “These mentors and these experts in our local investment community delivered on that, they received it, implemented it, and that’s how these checks got written.”
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.
In one case, investors were introducing founders to other potential investors. Startup Ajaya Bio got investment from Bio Advance Capital, which then introduced them to Ben Franklin Technology Partners for a joint investment, Lyles-Williams said.
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.
“This is an industry that runs on capital,” Spector said. “It 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’s been a frustrating thing for us.”
