Why Startups Choose Philly, According to the Director of a Life Science Incubator
With a deep background in both science and industry, Matthew Burkhardt understands what young companies need—and why Philadelphia offers plentiful advantages over other cities.
Over the last several years, Philadelphia has seen a groundswell of startups in the life science sector, particularly around cell and gene therapy.
What’s behind the momentum? One person who has a unique understanding of what’s happening is Matthew Burkhardt, the director of Brandywine Realty Trust’s B+labs at Cira Centre, an incubation space for life science companies powered by the Pennsylvania Biotechnology Center (PABC). Burkhardt, who’s also spent significant time working in Boston and San Francisco, brings an ideal set of credentials to his position, blending an extensive scientific background with rich experience in the pharmaceutical industry and the startup space. (As a researcher, Burkhardt has had roles at Merck, iPierian and Novartis, while as a consultant he’s worked with a range of firms, including RxCelerate, a top asset development group based in the U.K.)
Here, he talks about why Philadelphia has become so appealing to startups—and what comes next.
Your background seems perfectly suited to your current position.
I grew up outside Philadelphia but spent most of my career in San Francisco and Boston. I got started in the lab at Hahnemann University many years ago, then I was at the University of Pennsylvania. So, I was fortunate to get great training in research and lab-based work from those two institutions with some really great individuals as my principal investigators.
Then I had the opportunity to join Merck in Boston, which was really my introduction into industry-style drug discovery and development. I got to understand how industry runs things at the bench, and how the programs progress. I then had the opportunity to get involved in the company-creation and startup space. That was out on the West Coast in San Francisco, and I really enjoyed that kind of foundational activity and early-stage work.
Now that I‘m back in Philadelphia, I have the opportunity to replicate some of the incubator- and accelerator-style spaces that have been so successful in hallmark geographies for life sciences in the U.S.
How do you describe B+labs to people who are unfamiliar with it?
B+labs is essentially a space for life science companies, typically therapeutics, that are early-stage or growth-stage and need developing space in order to hit particular milestones, raise additional capital, and prove out their particular thesis. If they check all the boxes—if things look clinically and commercially promising—companies will most likely raise additional rounds of funding, graduate to larger and more permanent spaces, and grow their teams.
How do you see your role?
One, I make sure the lights stay on and the wheels keep turning. But it’s also to really grow and establish that best-in-class network of capital and connections around our site to make sure companies have access to all the opinions, expertise, and resources that really make these companies go.
B+labs is currently home to 15 companies. What’s the appeal?
In the past year or so, demand for space in Philadelphia has been high. You have hallmark larger companies in Philadelphia – Carisma, Century, Tmunity, Cabaletta – that are growing quickly and need space. The fact that we are part of Schuylkill Yards, at the center of the expanding life science ecosystem in Philadelphia, is really attractive. And so is our proximity to 30th Street Station and being positioned where we are, at the entry point to University City, close to Drexel University and the University of Pennsylvania and world-class hospitals like Children’s Hospital of Philadelphia and the Hospital of the University of Pennsylvania. That’s certainly a nice resource for companies. Access to capital in New York and access to regulatory in DC via Amtrak is also valuable.
More broadly, what’s the appeal of Philadelphia for startups?
There are a few things. People talk about the lower cost of operations, whether it’s salaries or just renting lab space as a therapeutics company. What’s the cost to get up and running and then maintain your operations? How meaningfully does it extend the runway for a particular company? If they can operate for 12 months in Philadelphia versus 9 months in another geography, that can be meaningful.
I also think the talent environment is of interest to companies here. In cities like Boston, you see a ton of turnover. Within 24 months, people may work for two companies; it’s highly competitive to attract talent. And perhaps even harder to retain it. For companies that are early-stage and growing, if there is a high-risk of foundational team turnover, that’s a tough spot to be in. In Philadelphia, the talent pool is strong with the prevalence of great institutions like Penn, Drexel, the Wistar Institute and Children’s Hospital of Philadelphia. It’s a much more stable environment.
And finally there’s just a lot of momentum here, both with the number of startups and on the real estate and economic development side. There are millions of square feet of lab and research space coming online within the city in the next three years—about 620,000 of those within just about one block of Schuylkill Yards by the end of 2024. When you concentrate people in a space and get people bumping into each other during coffee and lunch and walking to the train every day, that’s really when people get a sense of community and identity and activity. Look, it’s fun being in those places. There’s a lot going on. And it will be the key industry in the city. You’re not second to Wall Street or Hollywood or Facebook. That to me is when it gets really exciting.
Philadelphia’s startup ecosystem isn’t necessarily as developed as some other life science cities. Are there ways that could actually be an advantage?
San Francisco and Boston and other mature life science geographies, a lot of their networks – the individuals and organizations that really turn the crank for companies in these geographies –are already formed. You have a lot of the key venture capital groups, key executives, key scientific people established. It can be very hard to get into that network if you’re coming in as an outsider. In Philadelphia, that network is largely still being formed. So there’s an opportunity to get entrenched within a key network at the start of a growing ecosystem and to be a driver and key player in it.
You mentioned proximity to 30th Street Station before. How is that an asset?
One, commuting-wise, it’s extremely easy from a day-to-day perspective. I can throw a tennis ball and hit 30th Street Station from my office, and that’s generally been the feedback from individuals and companies here.
And then there’s access to Washington D.C. and New York. If you have meetings in D.C. with the FDA or other agencies, our location within Schuylkill Yards makes that really easy to do. You can get on a train to D.C. at 10 a.m. and be back in your office having meetings with your team about what transpired in the afternoon. Same thing with New York and access to capital and fundraising there.
How does Philadelphia keep its momentum going?
I think about this on two levels. We have some really fantastic brand-name researchers at some of the different institutions here in Philadelphia that have spun out a number of companies. They attract the interest of top-tier venture groups who bring in their own network; and they are very good at what they do and Philadelphia should support their efforts. These hallmark companies I mentioned earlier have started to put Philadelphia on the radar and demonstrate that you can create and grow companies here. You don’t have to move to a different geography to access capital and great talent if you don’t want to.
To keep that momentum moving, I’m interested in creating another pool of capital for company creation within Philadelphia. If you don’t have access to those top-tier venture capital groups, or if you haven’t made your name yet in the sector, but you have the data to support the foundation of a company - asset or platform - we are working on some initiatives in the next year or two to make sure an avenue for progression exists locally.
Philadelphia has always had world-class healthcare. Do you see what’s happening now as a natural extension of that?
Cities tend to have economic identities – Los Angeles and entertainment, New York and finance, Houston and energy. Philadelphia has long been a healthcare city, and I do believe that’s the identity here. Historically, the identity is more clinical, more on the hospital side rather than pre-clinical discovery. But there’s no reason the city can’t operate across the spectrum from discovery to clinical care. It’s already happening. We want to ensure it continues.
Learn more about B+Labs.