New state fund targets the biotech “valley of death,” backing startups, clinical trials and workforce programs as Pennsylvania leans into its life sciences ambitions.
Pennsylvania Governor Josh Shapiro announced a new $125 million state initiative this week designed to help the commonwealth’s life sciences startups land funding, speed up clinical trials and push new medical discoveries toward the market. Shapiro made the announcement at B+labs, a life sciences incubator inside the Cira Centre at Schuylkill Yards in West Philadelphia, framing the investment as another move toward positioning Pennsylvania as a national biotech leader.
“Pennsylvania is winning, and we are beginning to dominate this space in life sciences research and, of course, in investment,” Shapiro said, pointing to Eli Lilly’s recent decision to open a Lilly Gateway Labs biotech incubator in Philadelphia as evidence of the sector’s momentum.
The program, known as Innovate in PA 2.0, follows passage of Pennsylvania’s latest state budget, which set aside funding for the initiative after bipartisan negotiations in Harrisburg. It’s built to give early-stage life sciences companies access to capital while also supporting clinical trial infrastructure and workforce development, with a particular focus on historically underserved communities.
Before the announcement, Shapiro toured B+labs and met with entrepreneurs building new medical technologies on-site. “It’s an incredibly impressive space where researchers are doing cutting-edge work every single day, quite literally making new discoveries that will improve lives and build out our life sciences industries,” he said. “I think you can feel the momentum building all across our commonwealth in the life sciences space.”
Bridging the “Valley of Death”
Shapiro described the fund as a way to help startups survive the so-called “valley of death” — the gap between a scientific breakthrough and the investment needed to actually commercialize it. B+labs currently hosts roughly 25 life sciences companies and sits close to major research institutions, including Children’s Hospital of Philadelphia (CHOP), the University of Pennsylvania and Drexel University. According to Shapiro, incubators like it let young companies share costly lab equipment, work alongside researchers and connect with investors, lowering the barrier to getting started.
Matthew Burkhardt, director of B+labs, called the initiative “a belief in the quality of the innovation.” “It’s trust in the individuals, giving them the tools and resources to move forward,” he said. “I look forward to how this is going to capitalize on the activity here in Philadelphia and in Pittsburgh and what that means for the companies that operate from here and the scientists that operate from here.”
Shapiro also argued that Pennsylvania’s universities, skilled workforce and manufacturing base make it well suited to become a national biotech hub, noting that half of all vaccines distributed across the United States are manufactured in the state.
Industry and Hospital Leaders Weigh In
Industry leaders said the timing matters, given how much harder venture capital has become to secure for early-stage biotech companies. Christopher Molineaux, president and CEO of Life Sciences Pennsylvania, called Innovate in PA 2.0 “the most significant commitment by Pennsylvania state government into the life sciences in almost three decades.” He noted that nearly 40% of his organization’s roughly 960 member companies employ 10 people or fewer, making capital access especially critical.
“It is a very high-risk industry,” Molineaux said. “Not only is it significant, it’s also very timely. I think we all would acknowledge the last three years have been very difficult for startup companies raising capital.”
Madeline Bell, CEO of CHOP, said public investment like this helps carry research breakthroughs into real treatments, citing the hospital’s recent personalized gene-editing therapy for a child known publicly as “Baby KJ” — the first person in the world successfully treated with a bespoke CRISPR gene-editing therapy. “Every scientific breakthrough comes with a great idea, but it really requires funding and it requires teamwork,” Bell said. “Innovate in PA 2.0 is so important to us. It’s going to make our breakthroughs possible. It’s going to get them from the bench to the bedside more quickly.”
Labor and Lawmakers Back the Plan
Labor unions have also thrown their support behind the initiative, noting that biotech growth translates into demand for specialized construction work. Jim Snell, business manager of Steamfitters Local 420, said each new lab or manufacturing facility means sustained work for union members. “When these small startups start growing … they build big manufacturing facilities,” Snell said. “What does it mean? It means jobs. It means job security for my members.”
State Sen. Vincent Hughes, D-Philadelphia, who helped negotiate the funding, said the impact goes beyond economic development. “In the end, it’s about the innovators,” Hughes said. “It’s about the innovation. It’s about the lives that are being saved because of the incredible work and the incredible genius that exists within this building.” He added that part of the funding is earmarked to expand opportunities for communities that have historically lacked access to investment.
State officials said the Department of Community and Economic Development expects to open applications for the program within the next few weeks. BioBuzz will continue tracking Innovate in PA 2.0 as application details and award timelines come into focus.
