bioSTATus Winter // 2014

Trends // »» SEVEN AREA BIOTECHS complete IPOs, raising $654 million

»» VALUE OF PUBLIC MASS-BASED BIOS surges to record $105 billion

»» JOHNSON & JOHNSON latest big pharma to open local office

»» ARIAD & VERTEX ANNOUNCE LAYOFFS, sublease effect unknown

»» INFLUX FROM SUBURBS to Cambridge continues

»» DRUG NEWS SPURS dramatic stock price volatility

*Unless otherwise noted, all data is as of or for the quarter ended September 30, 2013 and Transwestern|RBJ data. Vacancy Take-Up % (000 omitted) 16% 1,000

14% 800

12% 600 10% 400 8% 200 6% 0 4%

2% (200)

0% (400) bioSTATus 2007 2008 2009 2010 2011 2012 2013

EXECUTIVE SUMMARY TAKE-UP & VACANCY // MARKET SIZING & SEGMENTATION // Greater Boston’s dominance in the biotechnology Total Market industry continues to drive demand for biotechnology research-focused (“Laboratory”) space against Vacancy Take-Up % (000 omitted) Cambridge a backdrop of robust public markets investment 16% 1,000 8,433,000 and continued expansion of collaborations and 14% 800 Suburbs 12% 5,598,000 600 partnerships. In the two-quarter period ended 10% 400 Boston September 30, 2013, tenants drove 550,000 sf of 8% 3,160,000 200 6% negative take-up of Laboratory real estate, a figure 0 4% TOTAL 17,191,000 which would have been positive had it not been 2% (200) for 911,000 sf of consolidative take-up on the part 0% (400) 2007 2008 2009 2010 2011 2012 2013 of Pfizer and Vertex Pharmaceuticals. The number of National Institutes of Health (“NIH”) clinical trials underway as a result of Massachusetts-based research trials at or near recently set record levels for Phases I, III and IV. The 55 Trials in the first phase represent a dip from the record 57 underway in the first quarter, though operations swelled to reach or approach record levels140 for three different trials while 2010 Q1 2011 Q3 2012 Q1 Tecfidera, a Biogen Idec drug approved in 2013, has revenue generating potential the number reflects a continued2012 Q1strong commitment2013 Q3 on the part 2013of biopharmasQ3 to 120 of up to $3 billion by 2018; the greatest expectation for any drug approved in 2013. keep an approved drug-generating pipeline active, as this pipeline has grown from 100 Massachusetts continues to boast the country’s largest biotechnology research & a level of just 22 ten years ago. Trials underway in the second phase have seen the 80 development workforce, a factor that undoubtedly attracted Johnson & Johnson to most sluggish growth in recent years, with this phase requiring far more capital 60 Cambridge become the ninth of the ten largest biopharmaceutical companies in the world to than the first phase, though remaining relatively distant from revenue generation in 8,433,000 open a Boston-area presence. The public markets have40 also expressed enthusiasm, terms of both time and visibility. At 98, the number of trials underway in this phase Suburbs 5,598,000 20 is not only below a five-year median level of 104 trials, but substantially below a adding 40 percent of value to Massachusetts-based bio stocks while absorbing seven Boston 3,160,000 initial public offerings (“IPOs”) of stock since April 1st,0 by far a record number for such peak number of 138 observed in the first quarter of 2006. Trials underway in the Phase I Phase II Phase III Phase IV a short period of time for life sciences companies. third phase tied the record of 113 observed a year ago while trials in the fourth phase Source: Food and Drug Administration, Transwestern|RBJ TOTAL were one off from a record level observed in the first quarter. Biogen Idec’s Tecfidera 17,191,000 While the sentiment remains decidedly positive, several cautionary themes persist. multiple sclerosis therapy may be the blockbuster approval of 2013; the drug is The number of Mass-based research efforts in phase II clinical trials reflects a rush estimated to have an industry-leading $3 billion in revenues by the end of 2018. of capital to later stage efforts, and also an increasing propensity to pull funding on compounds that clear the first phase, but for whom a second phase could be costly Massachusetts remains a global leader in the number of biotechnology-skilled and potentially fail. While the state remains the leader in number of biotech R&D laborers. The state’s 28,000 biotechnology research & development workers remains 140 workers, California’s R&D workforce has grown twice as fast over the last five years, the greatest such amount in the United States, outpacing2010 Q1 California’s2011 23,000 Q3 such 2012 Q1 2012 Q1 2013 Q3 2013 Q3 and the competition remains fierce with essentially all other geographies,120 eager to workers despite that state’s general population being six times greater. While this win biotechnology firms and target workforce. While most firms remain100 in organic job growth keeps pace through a combination of gradual organic growth and a growth mode, consolidations by ARIAD Pharmaceuticals, Merck and Vertex80 could recurring stream of large, new presence announcements, the middle quarters of materially impact the market and introduce large amounts of state-of-the-art60 modern 2013 also saw a number of challenges to growing headcount. ARIAD eliminated 36

Laboratory space to the sublease market. The two quarters have also showcased40 percent of its Cambridge-based workforce following the cancellation of a critical the rapid decisiveness of the public markets. While value is quickly added, it is also drug trial, reversing growth plans it had in place with the expectation of a strong 20 quickly taken away. trials performance. Vertex, on the eve of its highly anticipated move to the Seaport 0 PhaseDistrict, I announced the layoffPhase of II 15 percent of its staffPhase following III a downward Phase IV INDUSTRY Source: Food andrevision Drug Administration, of revenue Transwester expectationsn|RBJ related to the INCIVEK drug, a “blockbuster” Tecfidera King; Employment Growth Mixed;Hello J&J! that had originally sparked the company’s physical expansion; the drug has faced The biotechnology research function churns on with Massachusetts-based clinical more intense competition from similar drugs than had been previously envisioned.

2 bioSTATus Winter // 2014

PerkinElmer, while announcing a national downsizing effort, still has plans to grow Largest Cambridge Life Sciences Leases // its Massachusetts presence, including additional staffing at its newly opened facility TENANT ADDRESS SF LEASED in Hopkinton. It is unclear whether a decision by Merck to eliminate 20 percent of its Novartis 700 Main St 100,000 global workforce by the end of 2015 will affect its 400-person Longwood Research Genzyme 64 Sidney St 57,000 Center. Large biopharma consolidation efforts have generally benefitted the area’s Bluebird Bio 150 Second St 44,000 workforce numbers as these initiatives have the traditional intensions of transforming 24M Technologies 130 Brookline St 40,000 former old-pharmaceutical Vacancyexperimentation into more targetedTake-Up biopharma-style % (000 omitted) research efforts. 16% 1,000 Constellation Pharmaceuticals 215 First St 36,000 14% 800 Metabolix 21 Erie St 28,000 12% 600 Validation of the Greater Boston area’s competencies in biotechnology laboratory MIT One Kendall Sq #300 23,000 10% 400 research continues to source8% from a mix of large biopharmas and smaller groups BIND Therapeutics 325 Vassar St 18,000 200 looking to enter, understand6% and collaborate with the area’s dynamic industry 0 Nucleus Scientific 148 Sidney St 15,000 4% force, and from an increasing roster of supporting organizations. Among these 2% (200) Ensemble Therapeutics 99 Erie St 12,000 new supporting groups is0% American Laboratory Trading, a dealer of second-hand(400) Manus Biosyntheis 1030 Mass. Ave 11,000 2007 2008 2009 2010 2011 2012 2013 laboratory research equipment, a significant complement to earlier-stage research Epizyme 400 Technology Sq 11,000 firms looking to maximize available funding. Johnson & Johnson became the ninth Eleven Biotherapeutics 215 First St 11,000 of the world’s ten largest biopharmas to open an area presence, opening its “Boston Teleflex One Kendall Sq #1400 10,000 Innovation Center” in Cambridge (Eli Lilly & Company is the holdout). The center Greater Boston largest leases since April 2013. Source: Transwestern|RBJ stands among operations they are opening in California, London and Shanghai, in an effort to increase participation in next generation biopharma research and going public since April 1st. In each offering, investors exercised the additional 15 collaboration. percent of stock available through an “over-allotment,” indicating a high level of investor interest in the issues. Cubist Pharmaceuticals, Synta Pharmaceuticals and MONEY Cambridge Tetraphase Pharmaceuticals were able to exercise follow-on8,433,000 offerings of stock, Offerings Overflow; Partnerships Proliferate; Broad another $100m while Merrimack Pharmaceuticals executed two simultaneousSuburbs issues, a $75 million The public markets proved historically receptive of Massachusetts-based 5,598,000 offering of convertible preferred stock and a $57.5 millionBoston offering of common stock. biotechnology companies as a record number of IPOs highlighted robust public Despite an essentially full pipeline of expected offerings3,160,000 for much of the year, just investor appreciation. An aggregate $654 million of capital was raised for first- two offerings remain in registration at the beginningTOTAL of December – a $50 million time issuers, with Acceleron Pharma, Agios Pharmaceuticals, BIND Therapeutics, 17,191,000 IPO for Waltham-based GeNO LLC, and a follow-on offering for Burlington-based bluebird bio, Epizyme, Foundation Medicine and Karyopharm Therapeutics all Dyax; the Dyax offering not specifying an issue amount. A historic broad market rally

MASSACHUSETTS CLINICAL TRIALS INDEX // Trials by Phase

140 2010 Q1 2011 Q3 2012 Q1 120 2012 Q1 2013 Q3 2013 Q3

100

80

60

40

20

0 Phase I Phase II Phase III Phase IV

Source: Food and Drug Administration, Transwestern|RBJ

3 bioSTATus

Markets Move Decisively on Bio Company News // Market cap effects of big company announcements

COMPANY STOCK % $ (MIL) DATE RANGE REASON

Vertex Pharma VRTX 62% $7,651 4/18 to 4/19 New compound found to increase market of Kalydeco CF drug

Aegerion Pharma AEGR 47% $648 5/15 to 5/29 Orphan therapy Juxtapid found to be safer alternative to competitor

TESARO TSRO 35% $391 5/31 to 6/3 Announced partnership for Phase III clinical trial candidate niraparib

Biogen Idec BIIB 17% $10,300 11/21 to 11/25 Favorable patent ruling for MS drug Tecfidera in Europe

Idenix Pharma IDIX -31% ($210) 6/20 to 6/21 NFDA delays clinical trials of hepatitis C treatment pending more data

Synta Pharma SNTA -34% ($173) 5/31 to 6/3 New cancer treatment found to be less effective than had been hoped

Dyax Pharma DYAX -35% ($174) 4/25 to 4/26 Missed earnings expectations by 25%

ARIAD Pharma ARIA -86% ($2,986) 10/4 to 10/18 Cancer pill Iclusig suspended by FDA over blood clotting issue

MASS BIO VALUATIONS OURPERFORM BROAD MARKET // exchange of funds, but guarantee certain payments upon reaching the specified Aggregate market capitalization of publicly traded Massachusetts biotechnology companies through 11/20/2013; performance goals, up to the comparably large maximum amount. The opening performance of NASDAQ overlay with biotechnology aggregate value = NASDAQ as of April 1, 2013 of Johnson & Johnson’s Boston Innovation Center would appear to be an outpost Source: Transwestern|RBJ, Yahoo! Finance to pursue these types of partnership agreements, which Biogen Idec, Merck, Pfizer and Vertex are already engaged in. Acetylon Pharmaceuticals of Boston entered into one such partnership with Celgene, as Cubist Pharmaceuticals of Lexington $110 UNIVERSE COMPANIES AEGR CBST RGEN ALNY CRIS SNTA agreed to acquire both Optimer Pharmaceuticals and Trius Therapeutics, in a deal $105 ANIK DYAX TSRO Massachussetts Bio ARIA IDIX TTPH NASDAQ Relevant Performance that offers the sellers up to a combined $1.6 billion in consideration upon reaching ARQL IMGN VRTX $100 AVEO IRWD VSTM BIIB MACK various performance hurdles. In a period that featured the public markets as more of $95 a primary source of funding than usual, Acton Pharmaceuticals of Marlborough was $90 acquired by Meda AB for $200 million.

$85 While remaining a critical source of early- and mid-stage growth funding for $80 biotechs, the aggregate amount of venture capital invested in Massachusetts-based $75 ventures has shown some variability in recent periods, potentially reflecting a $70 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 propensity for big funding requirements to be met through industry partnerships and $ in Billions Source: Transwestern|RBJ, Yahoo! Finance collaboration with larger biopharmaceutical operations. VCs placed $372 million of funds into biotechnology ventures in the middle quarters of 2013, compared with serves as important context for this investor appetite for new biotechnology issues. $404 million invested in the preceding two quarters and $414 million invested in While the NASDAQ Index has experienced 25 percent appreciation since the end of the same two quarters last year. This is also a decrease from a five year two-quarter the first quarter, Massachusetts-based biotechnology groups have enjoyed an even average of $472 million and from the record $654 million recorded in the two- larger 40 percent gain. Achieving a current $105 billion in aggregate market value, quarter period ending with the first quarter of 2012. Despite the dip in investment the combined value of Mass bio stocks rose above $100 billion for the first time ever volume, Catabasis Pharmaceuticals attracted a $32 million late-stage raise while in November. implying a near-term IPO filing as Sage Therapeutics announced a $20 million second round investment. Sideris Pharmaceuticals attracted a $32 million Series A Partnerships, many with future options and commitments of varying resources upon raise from a group of investors including Novartis; in connection with the investment, attaining various performance goals, continue to proliferate throughout the industry, Novartis acquired the rights to ultimately purchase the group and its assets for mostly as a device for larger biopharmaceutical operations to guarantee participation up to $300 million. A string of charitable investments continued as Eli & Edythe in earlier stage efforts. These agreements generally include little or zero up front

4 bioSTATus Winter // 2014

Broad committed an additional $100 million to their namesake Broad Institute in CAMBRIDGE: The Third Rock Effect Cambridge; the latest amount bringing their contribution to $700 million in total. Since launching in 2007, Boston-based Third Rock Ventures has $1.3 billion in funds, in part using this capital to help fuel 15 Cambridge-based biotechnology companies, now CAMBRIDGE DOMINATES IPO with a combined footprint of more than 300,000 sf. These portfolio companies have People’s Republic Captures Six; New Target Tenant constituted a major share of Cambridge Laboratory demand and biopharma success: Prior to April, just 29 percent of Massachusetts-based publicly traded biotechnology companies were headquartered in Cambridge; with the seven IPOs occurring since, an astounding six of them, or 84 percent, were based in Cambridge. These figures shows new preference for private companies aspiring for a public listing to locate in Cambridge, preferring proximity to larger biopharmaceutical operations, nonprofit organizations, universities and reflated workforces over the savings afforded by suburban locations. The groups, and their sources of funding, among them venture capitalist Third Rock Ventures of Boston, see critical value in being in the “cluster” of bio activity, principally concentrated in East Cambridge. The 2013 offerings, IPO’d distributing $545 million of public capital to Cambridge-based bios, will continue to establish a mid-sized class of biotechnology players, alongside the currently established footprints of smaller startups, and the much larger bios such as Biogen Idec, Novartis, Pfizer and Sanofi. This accelerating imperative for the mid-sized could be a considerable driver of absorption in Cambridge in coming periods. AQUIRED PUBLIC MARKETS PROVE FINICKY Volatility Widespread; Values Change Quickly As the public markets have absorbed seven IPOs, an additional number of other offerings and gifted 40 percent equity appreciated to Massachusetts-based PRE-LIQUIDITY biotechnology groups since April 1st, they have also been found to quickly award, and to take away, value, based on perceptions of performance. While the greatest five-day change observed since April 1st in the NASDAQ has been less than positive or negative five percentage points, the Mass bios, as a group, have seen equity appreciate by as much as 19 percent, and decrease by as much as 11 percent in the same size period. Individual stocks have been found to be even more volatile, with two-thirds of Mass bio stocks seeing a boost of valuation of at least 25 percent over five days, and 57 percent seeing value decrease by at least 20 percent over five days. Public bios generally see heavy decreases in valuation as a result of disappointing quarterly financial reports, or, as in the case of ARIAD, unfavorable news surrounding a drug or drug candidate. While favorable quarterly financial reports can have a favorable effect on stock, the most dramatic increases generally come as a result of favorable drug news, such as Biogen Idec’s creation of $10.3 billion in shareholder value following a favorable regulatory ruling on a key drug.

CAMBRIDGE Consolidation Concentrated; Bio Gets Incubator; Subleases Expanding Two large biopharmas totaling 911,000 sf of consolidation resulted in 567,000 sf

5 Vacancy Take-up % (000 omitted) 20%

18% 800 16% 600 14%

12% 400

10% 200 8% 0 6% (200) 4% (400) 2% bioSTATus 0% (600) 2007 2008 2009 2010 2011 2012 2013

moved into 64,000 sf at 640 Memorial Drive. TAKE-UP & VACANCY // TAKE-UP & VACANCY // Cambridge Boston With construction nearing completion at the 229,000 sf 610 Main Street for Pfizer and the 250,000 sf Vacancy Take-up Vacancy Take-up % (000 omitted) % (000 omitted) Broad Institute expansion at 75 Ames Street, and 20% 25% 600 18% completion slated for later 2014 at the 550,000 sf 800 500 16% 20% 600 Novartis expansion at 181 Massachusetts Avenue, 14% 400 12% 400 15% questions surround the 408,000 sf build-to-suit facility 10% 200 300 8% 10% underway for ARIAD at 75-125 Binney Street. The 0 200 6% (200) biopharma initially committed to occupy 245,000 sf of 4% 5% 100 (400) 2% the structure, increasing their commitment to the full 0% (600) 0% 0 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 building shortly before encountering unfavorable news surrounding their primary drug compound and laying off nearly 40 percent of their staff (note: Transwestern of negative take-up in the Cambridge submarket for the two-quarter period ended RBJ numbers do not take into account the additional commitment of the full September 30, 2013. A majority, or 554,000 sf of this space, was related to the building). No announcement regarding subleasing at the property has been made, forthcoming move of Vertex to the Seaport District, expected to commence by though, assuming the company is able to survive its current situation, a substantial year-end, mostly vacating Mid Cambridge space in the process. Pfizer was the other Vacancy Take-up amount of sublease or otherwise availability at the property is likely. The Cambridge major% driver of negative take-up, announcing(000 omitted) it will vacate a four-building campus 25% 600 submarket already has the greatest amount of sublease availability seen since 2005; once home to Genetics Institute in West Cambridge500 in a move to a far more efficient 20% the 582,000 sf representing an increase in sublease availability from 80,000 sf three and consolidated campus at 610 and 700 Main Street.400 While the Vertex move reflects 15% quarters ago, and largely reflecting capable and competitively-priced facilities being a desire for a single campus, the Pfizer relocation shows300 the perceived importance

10% vacated by Pfizer and Vertex of a location in the East Cambridge “cluster” of biotechnology200 research activity, even when5% compared to other locations within Cambridge. For its part, East Cambridge 100 BOSTON experienced0% 146,000 sf of positive take-up in the two-quarter0 period, extending a Sublease at Vertex? Boston wins NJ Lab long-term2007 trend2008 that2009 has most2010 recently2011 seen2012 net2013 commitments rise 1.5 million sf since Boston experienced 16,000 sf of positive take-up in the two-quarter period ended the beginning of 2011. September 30, 2013, driving vacancy down to 0.9 percent, its lowest level ever. Ow- Positive demand was driven by the recurring themes of the desire for new space, and ing much to its relatively stable occupancy base, much in contrast to a greater range an attraction to the geographically concentrated biotech cluster in East Cambridge. of vacancy seen in Cambridge and in the Suburbs, vacancy has averaged 2.7 percent Novartis, the largest non-institutional occupant of space in East Cambridge with over the last five years, highlighting very little existing choice for tenants relative to over a two million sf footprint, agreed to expand this base by 100,000 sf at 700 Main higher availability levels in surrounding areas. However, two factors could substan- Street, joining Pfizer, committing to 45,000 sf proximate to its facility next door at tially change those circumstances in coming periods. Construction continues at the 610 Main Street and LabCentral, which committed to 28,000 sf. This group, founded 414,000 sf Longwood Center; the nine-floor facility’s top five floors remain available a $5 million grant from the Massachusetts Life Sciences Center and support from and are able to accommodate 50,000 sf and larger. While the availability at the Long- MIT, will attempt to extend the type of success of the nearby Cambridge Innovation wood Center appears clear, questions surround Vertex and the 1.1 million sf campus Center to the area’s life sciences industry. Ipsen Pharmaceuticals, in a relocation they intend to occupy in phases over the coming quarters in the Seaport District. from Milford, committed to 63,000 sf at 650 East Kendall Street, bringing that The large biopharma now intends to lay off 15 percent of its staff, a reversal from a property to near 70 percent stabilized, when considering a previous commitment previously anticipated expansion which was required for its once blockbuster, now by AVEO Pharmaceuticals. Finally, bluebird bio agreed to occupy 44,000 sf at 150 flailing INCIVEK drug. One of the two new structures is essentially an office building, Second Street, joining Foundation Medicine to bring that 2012-completed structure which could potentially find interest from a variety of user types while one structure to 85 percent commitment (that 123,000 sf structure, uniquely constructed and is substantially a Lab building. These factors may have a bearing when the Company funded by developer Skanska USA, was sold to Alexandria Real Estate Equities at press determined in which departments the majority of layoffs would occur and what sort time for $94.5 million, $767 per sf). Boston Biomedical, in a move from Norwood, of sublease strategy, if any, would be pursued.

6 bioSTATus Winter // 2014

for their inaugural US locations. Wolfe Laboratories incurred 18,000 sf of take-up by LAB AVAILABILITIES by Size & Location // Class A Properties The relocation of deciding to stay in place at 134 Coolidge Avenue in Watertown, while an additional Columbia Laboratories six properties contributed to increased commitments. An equivalent number of prop- Small Medium Large from New Jersey into erties saw commitment levels decrease, following consolidations by InnoCentive 5K to 10K SF 20K to 50K SF 100K + SF 4 Liberty Square in the and Makoto Life Sciences, and a realization of space that vacated by Microbia. Events E. Cambridge 3 4 1 Financial District could previously announced but occurring in the period included the absorption of MGI Cambridge 6 10 3 serve as an interesting Pharma’s 28,000 sf footprint into Easai, Biogen Idec’s consolidation out of 25,000 sf Boston 2 0 0 potential precedent for in Waltham and Synageva BioPharma, which committed to a 51,000 sf move within Suburbs 1 1 0 much of central Boston’s Lexington. participation in the biotechnology industry. As the development of tools for comput- er-simulated biotechnology research and testing expands, biotechnology research While avoiding the period of negative take-up seen in Cambridge, the suburbs organizations occupy a decreasing amount of “wet lab” space. With the need for continue to experience a period of stagnant demand; even trailing the Cambridge traditional Laboratory less important, some organizations may be in the position to market for the period when extracting the isolated events causing the seeming occupy traditional office space with reasonable proximity to shared Laboratories, for negative demand. Of the three million sf of positive take-up occurring in the Greater when they’re needed. Central Boston’s role is particularly intriguing as the amenities Boston Laboratory market since the beginning of 2011, just 294,000 sf has occurred attractive to the cherished young professional labor force has greatly expanded in in the suburbs. However, as the suburbs contain none of the region’s 2.4 million sf the Financial District and Seaport District in recent periods and thousands of housing construction pipeline, none of the groups likely to place large amounts of sublease units are expected to be delivered within three years. Whether Boston becomes more availability on the market, a vacancy rate, currently at 8.9 percent, could be consid- competitive in the context of a less Lab-intensive biotechnology industry remains to ered likely to remain in constrained territory for the foreseeable future. be seen. Despite an increasing desire on the part of many space users to locate near younger, SUBURBS urban labor forces and in particular near the world-renown cluster of biotechnology Suburbs Demand Cool; Still Attracts Groups research expertise in East Cambridge, the suburbs continue to attract a variety of The Greater Boston suburban Laboratory submarket experienced a scant 1,000 sf early stage bios, expansion of existing bios and the entrance of groups from outside of positive take-up in the two-quarter period ended September 30, 2013 as vacancy the area looking to establish a presence in the region. Genzyme, a division of Sanofi, remained below equilibrium levels, at 8.9 percent. Behind flat overall demand num- announced its intention to develop a 72,0000 sf pharmaceutical processing plant in bers, numerous commitments and consolidations dotted the area. New commit- Framingham, an extension of the more than 500,000 sf footprint the group occupies ments in the area included uniQure, an Amsterdam, The Netherlands-based concern in the town. Hartwell Avenue in Lexington remains a destination for some earlier opening up a 53,000 sf Boston-area location at 113 Hartwell Avenue in Lexington, stage biotech groups, many with Cambridge backgrounds, looking to lower real continuing a trend set by AstraZeneca and Shire, among others, of non-United estate occupancy costs. Additionally, the 1.9 million sf of Class A Laboratory space States-based groups along the MassPike (the 128 West & 495 West submarkets) remains at the ultimate low TAKE-UP & VACANCY // turning to the suburbs Suburbs vacancy rate: zero percent.

Size Vacancy Take-Up (000) Availability % UC Vacancy Take-Up % (000 omitted) 25% 300 Area RSF (000) % Last 2 Qtrs Last 4 Qtrs Direct Sublet Total RSF (000)

20% 200 TOTAL LAB MARKET 17,191 9.3% -550 107 8.5% 5.30% 13.8% 2,400

15% 100 Cambridge Lab 8,433 12.7% -567 8 10.6% 6.90% 17.5% 1,437 10% 0

5% (100) Boston Lab 3,160 0.9% 16 20 0.9% 0.00% 0.9% 963

0% (200) 2007 2008 2009 2010 2011 2012 2013 Suburban Lab 5,598 8.9% 1 79 9.7% 5.90% 15.6% 0

7 bioSTATus Winter // 2014

bioSTATUS Monitor // Brendan Carroll »» Will NIH phase II clinical trials rebound in 2014? Senior Vice President of Research »» How much sublease space will result from ARIAD and Vertex? [email protected]

»» Will growth of the state’s bio R&D jobs accelerate?

»» Will LabCentral be an effective launchpad for early stage bios?

»» Will the trend of charitable giving continue?

»» Will collaborations increasingly compete with VC funding?

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