Biotech job market 2024: what to expect?

biotech job market

The past year saw a string of pipeline cuts and downsizing plans strike the biotech job market. Have layoffs spooked young professionals looking for a way into the industry, and does the employment landscape seem to be looking up this year?

Employment in the life sciences industry had hit a record 2.1 million jobs in the U.S. at the beginning of 2023, according to a report by CBRE. But this came after a decline in employment growth in 2022, owing to soaring interest rates and retreating investors. 

And then, a contagion of layoffs took over the biotech sector last year. Now, the industry hopes to overcome the economic downturn and trudge ahead.

“I think the job market will fare slightly better than in 2023, but only by a small amount, taking two to three years to correct itself,” said Amber Penrose, founder of U.K.-based biotech recruitment firm Moxee Search. “Think back to 2020 and 2021, when we saw an influx of people entering the field. Now, as things return to ‘normal’ levels, the future seems a bit hazy.”

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    Industry-wide layoffs affect the biotech job market

    The flurry of layoffs from last year did seem to put a damper on the biotech job market. In fact, job layoffs increased by 57% in 2023, compared to 2022, according to a report by Fierce Biotech. Among the many biotechs that axed jobs were clinical-stage companies like gene therapy company Encoded Therapeutics, which cut 10% of its workforce to preserve capital, and Freeline Therapeutics, which brought its headcount down to 65 employees just as it had paused the development of its Fabry disease candidate back in April. 

    Multimillion-dollar revenue losses in late 2023 also saw U.S.-based immunotherapy company Atreca can 40% of its staff, and CDMO company Catalent lay off 1,100 employees. The funding shortage and the 79% drop in initial public offerings (IPOs) two years ago also contributed to the downward spiral. Moreover, the collapse of the Silicon Valley Bank (SVB) didn’t do any favors for the biotech industry.  While the tech industry faced the major brunt of SVB’s demise, early-stage biotechs in the U.S. were – at least momentarily – left with a funding void.

    As young biotechs and clinical-stage companies struggled to finance themselves, big pharma wasn’t immune to the economic slump either. Pfizer laid off 500 workers in the U.K. as well as hundreds of others in the U.S., after a drop in revenue by a sizable 42% last year. Danish and American multinationals Novo Nordisk and Biogen laid off staff, with the latter having announced plans to slash more than 1000 jobs by 2025, after its $7.3 billion buyout of anti-inflammatory drugs company Reata Pharmaceuticals.

    While ‘workforce reductions’ coursed through the sector, the Fierce Biotech report suggested that there were a few exceptions that did not make the cut. GLP-1 receptor agonists and radiopharmaceuticals were among them. With the Ozempic buying spree that saw the drug rake in 95.7 billion Danish kroner ($13.9 billion), this field didn’t struggle to access capital. 

    As for radiopharmaceuticals, a recent surge in funding seems to have kept money woes at bay. This is largely due to this class of drugs emerging as a new cancer therapy, like the U.S. Food and Drug Administration (FDA)-approved lutetium-177 dotatat, known by its brand name Lutathera.

    Still, layoffs claimed more than 10,000 jobs in the biotech industry last year, according to BioPharma Dive data. But Penrose pointed out that while these “layoffs are inevitable,” treating your employees poorly is not.

    “It’s been tough being on the other end of the phone, hearing so many biotech layoff stories during 2023, that lack empathy, human decency, and compassion,” said Penrose. “Companies now face a crucial task. They need to address the industry’s recent volatility and its impact on potential applicants.”

    Biotech job market poised for a recovery

    Penrose believes that the onus is on the companies to fix concerns as a team and address them during the interview process. 

    But, when exactly will the biotech job market get better? 

    “Not until interest rates come down, sadly. We are unlikely to see as many public biotechs in the next five years due to financial liquidity taking a hit,” said Penrose. “We had unusually cheap money available for start-ups in the last five years. We may not see a full rebound until 2025-2026.”

    Much like the 2008 financial crisis, which took a few years for things to stabilize, it’ll be a few years before a recognizable shift occurs, according to Penrose. The downturn in 2008 rippled at a much larger scale. It put biotech IPOs on hold, pharmaceuticals filed for bankruptcy, and in the aftermath, more than 42,000 jobs were cut. Yet, the healthcare sector is said to have weathered the storm better than others.

    Nevertheless, things seem to be looking up. The IPO market may witness a rebound, and the industry at large might be poised for a recovery this year. This could mean that companies will be looking to hire at some point, but Penrose explained that this could take a while.

    “My understanding is that it’ll only be better in the sense that it’ll be less bad, sadly. What does this mean for those holding their breath for a turn in the tide? I suspect that outright layoffs will be less common, but there’s a catch. It doesn’t necessarily mean companies will rush to expand their teams. The 2024 hiring budgets are set now, and the landscape looks somewhat bleak,” she said.

    M&As: a case of mixed feelings for employees

    Besides, mergers and acquisitions (M&As) have a significant impact on the biotech job market. A report by PwC suggests that dealmaking is expected to accelerate in 2024. Although regulatory scrutiny and heightened interest rates will remain, candidates backed by promising clinical data will be pursued.

    But as M&As stir up a “mix of feelings” in terms of the biotech job market, Penrose said: “Employees with shares often see these changes as a good thing, bringing financial gains and new opportunities for their careers. But, when news of an M&A breaks, it can cause worry about job security, especially for support staff and executives who might be let go right away.”

    However, Penrose explained that those who are deeply involved with a company’s main assets or have special skills, “usually find themselves in a more stable position.”

    “What happens to jobs after an M&A depends a lot on what the buying company is looking for. If they’re interested in the company for its solid, ready-to-market products, some jobs may be cut. But if they’re excited about the innovative science or projects with a lot of promise, then the focus is more on growth and making the most of that potential. The effects of M&As are widespread, often leading to changes in the biotech talent pool,” she said.

    When pharmaceuticals downsize, it shouldn’t be the end of the road for employees. Penrose pointed out that new biotech ventures await, and expertise and innovation are always sought after.

    “This movement of talent, driven by both large and strategic smaller mergers, is crucial for keeping the biotech ecosystem alive and well. It makes sure the right skills are being put to use where they’re needed most, helping the industry stay on its toes,” said Penrose.

    Biotech jobs on the horizon

    At present, job opportunities lie in specific areas in biotech, Penrose recounted. Gene therapy researchers are in demand as advancements in the field have been at the forefront for a while now. With FDA wins for CASGEVY, the first CRISPR-based therapy to treat sickle cell disease and beta-thalassemia, and HEMGENIX to treat hemophilia B, gene therapy research is broadening treatment approaches for genetic disorders. And so the work of researchers that is “evidenced by increased clinical trials” is vital. This also includes the need for CRISPR and gene editing scientists in the industry.

    “Following FDA approval of CRISPR-based therapies, there’s a high recruitment drive, highlighting a skill gap from academia to industry. CRISPR’s versatility extends beyond healthcare to improve global food security,” said Penrose.

    Moreover, as scientists slowly uncover the ways of the human microbiome, microbiologists are also currently sought after to develop microbiome-focused diagnostics and personalized treatments. And, companies seem to be on the lookout for manufacturing associates in drug production as well. These roles offer job security and career growth potential towards management roles, Penrose explained.

    Another field that could do with a hand is drug discovery. Artificial intelligence (AI) specialists are key to enhancing drug development as AI integrates into pharma

    Experts suggest that networking – an increasingly overused buzzword in recent times – could help candidates get ahead of the recruitment process.

    “Network, network, and then network some more!” said Penrose.

    “Is it easy? Absolutely not. Is it a quick fix? Absolutely not. But will it enable you to stand out through the noise? 100%!” she said.

    As the industry is predicted to make a recovery in time, the biotech job market may open its arms to new talent too.

    “In a year or so, I think the realization will dawn. Perhaps companies will see they’ve cut too deep. But what happens when they decide it’s time to ramp up again? Will there be a scramble for talent, or will the market respond with caution?”

    This, we will simply have to wait and see.

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