Philadelphia, a venerable health-care town, is now a center of the growing gene therapy manufacturing industry, one of the few places in the world where hundreds — soon, thousands — of scientists, technicians, and other skilled staff rebuild cells to fight cancer and other diseases, using new tools and techniques from university researchers.
The city ranks with the Boston and San Francisco areas, and labs in China, as early centers for the fast-growing industry.
But Philly will need substantially more investment from private and public sources to maintain its lead, says Felix Hsu, head of the region's largest such operation, the Global Advanced Therapy unit of China's WuXi AppTec, which employs 600 at its South Philadelphia headquarters, labs, and offices.
"Remember when Nokia was the market-beater in phones?" Hsu said. "Remember Blackberry? Technology is vicious. It is moving in faster time cycles."
WuXi ("Woo-Shee") AppTec's parent company, WuXi PharmaTech, was set up by chemist Ge Li in Shanghai in 2001, to provide "synthetic chemistry services" to pharmaceutical companies. It arrived in Philadelphia with its early 2008 purchase of AppTec Laboratory Services, whose facilities developed and tested monoclonal antibodies and cell therapies, and tested vaccines and recombinant DNA.
The company's 75,000-square-foot Philadelphia center, including 16,000 square feet of manufacturing space, was "the first new building at the Navy Yard in 40 years," recounts Hsu. The plant employed about 260, of whom more than 100 were laid off as WuXi shut down its biologics (antibodies) production line late in 2008, citing the recession. The company maintained its cell banking and cell therapy manufacturing services, he added.
An electrical engineer with a University of Michigan MBA, Hsu had set up the AppTec lab at the Navy Yard site, after working at Medtronic and Abbott Laboratories. WuXi named Hsu a Senior Vice President and head of its U.S. business unit in 2009. Earlier this year, he was named Global Head of the Advanced Therapies unit, spun out from the U.S. business unit. Advanced Therapies includes the Philadelphia sites, plus a new site in Wuxi City, around two and a half hours west of Shanghai. The company has bought additional biotech research companies, from Texas to Germany.
Five years ago, founder Ge Li "made a decision we were going to become a major player in this new business" involving cell therapies, Hsu said. His group proposed expanding the Navy Yard labs, ensuring that "Philadelphia would be the place where we would build the business out." That meant adding a second, 55,000-square-foot lab complex, dubbed Commerce Center 3 by Navy Yard developers, "for late-stage commercial cell-therapy manufacturing."
In 2014, "we got into the CAR T-Cell companies," eventually adding a 150,000-square-foot viral vector manufacturing facility at 4071 League Island Blvd. to build cells shaped to fight particular cancers. Ge Li visited the plant, joining Pennsylvania Lt. Gov. Mike Stack at a 2016 ribbon-cutting. The company has identified clients and partners whose therapies it makes, including Iovance Biotherapeutics (Seattle), Nohla Therapeutics (San Carlos, Calif.), Iqvia (Danbury, Conn.), the California Institute for Regenerative Medicine, and the University of Pennsylvania.
With its new China facility turning Hsu's group into a global business, WuXi AppTec plans to keep expanding here and in China. "As we continue to build out, [head count in Philadelphia] should be 800 to 1,000 in the next three to four years," Hsu told me.
Penn has expanded its own gene therapy development and manufacturing programs, in partnerships with Novartis and others. Wistar Institute, Christiana Hospital, Thomas Jefferson University, and other area institutions also work in the field, among others.
The Navy Yard, with its state and city tax breaks, is an attractive place to locate, Hsu says. But Massachusetts and California communities also offer professional depth, sophisticated investors, and public incentives. Hsu says he has told his industry colleagues here that "if they want to build out like Boston, they will have to do a couple of things. We have the academic centers. We have some of the basic science. Penn and the others are on the cutting edge of technology.
"But then the technology gets commercialized somewhere else, like Boston. You need venture capital. The city and the state have to make this a priority. [Boston area government] committed hundreds of millions in funding and infrastructure. It paid off. That is why Cambridge is now the epicenter in biotech."
"We have the potential to be another hub, if things play out right. We're not in a place where it's so difficult to find workers. The training in this area is very good." But even WuXi AppTec, which got to Philly early, "will continue to consider other locations as well."
Hsu says China-based investors are "challenging" Silicon Valley for the first time. "The money markets in China have become more effective, and bigger. China is now giving the U.S. a run for its money."
I noted a string of recent Philly biotech deals that have attracted China-based investors. Zhenhua Huang's KBP Biosciences, of Philadelphia, reported raising $76 million for U.S. tests of China-developed heart, lung, and infection-fighting drugs from China's State Development and Investment Corp. and others. Tmunity Therapeutics, a T-cell-based company set up by Penn cancer fighter Carl June, raised $100 million from Ping An Ventures, an arm of China's largest insurance firm, and others.
There is also U.S. money: Adaptimmune, another Navy Yard-based T-cell cancer-fighter, raised $100 million in a Nasdaq share sale last week. And this past spring, Penn trustees committed $50 million to back companies including Tmunity, Steven Nichtberger's Tycho Therapeutics, and Saar Gill's Carisma Therapeutics.
It's a start, but Boston deals are bigger and come together more quickly, Hsu says. "If Philadelphia wants to be a major power, it needs to raise more money. There are very few venture capital firms here that invest in the cell and gene therapy space. Most are in Boston and San Francisco, and one or two in Seattle. So technology developed here moves to Boston because of the network they have built: They have serial start-ups. It's fascinating: the cost of living is greater in Boston and San Francisco, but that's where the critical mass still is.
"Money drives a lot."