Houston makes strides in key piece of life science puzzle

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Aug. 16, 2018

life science

Last year, life sciences venture capital in Houston was up 300 percent over 2016 levels. The city also recorded increases in both life sciences employment and the number of life sciences establishments. Still, Houston has a ways to go before it contends with other, more established life science clusters.

Houston received $86.6 million in life sciences venture capital in 2017, compared with $19.8 million in 2016. Yet this represented only 0.44 percent of all U.S. life sciences venture capital in 2017. Houston is doing only slightly better when it comes to NIH funding – of which the city captured 0.9 percent of total funding.

Long a beacon for medical innovation, Houston has only more recently begun to leverage that strength into a commercial life sciences sector. Efforts to strengthen the sector in Houston are paying off.

Houston recorded 2.1 percent year-over-year growth in life sciences employment and 3.2 percent year-over-year growth in the number of life sciences establishments. The city ranks seventh among top U.S. life science clusters in terms of five-year employment growth and fifth in terms of five-year growth in total number of life science establishments, at 7.9 percent and 12.5 percent growth, respectively.

Moreover, Houston has seen increases in the number of life sciences Ph.D. graduates every year from 2010 to 2016, a key to attracting venture capital and established life sciences companies. In fact, a survey of JLL life science clients revealed that nearly 80 percent of location decisions were based on being close to universities and a R&D ecosystem, notwithstanding the high cost of being in top life science clusters.

Looking forward, retaining the sector’s intellectual capital and nascent companies will be crucial to Houston’s life science sector. A factor that is being addressed by the ambitious TMC3 project, which will cluster researchers and industry experts together on a collaborative 30-acre campus in the Texas Medical Center.

For more on Houston’s burgeoning life sciences sector, download our 2018 Life Sciences Outlook.

Read about our report in the Houston Business Journal and CoStar News.

Contact our Houston Healthcare and Life Sciences lead.