Life sciences in the Austin region

• Discussion document

• May 2024

The Austin region has the key ingredients for a thriving life sciences ecosystem

• Austin is the fastest growing MSA by GDP, driven by an over 30% increase in population since 2010

• Life sciences is a multi-trillion dollar market with double digit annual growth projected over the next decade

• Austin has unmatched assets in talent and research to spur the success of the life sciences ecosystem

• Source: Moody’s Analytics, Evaluate Pharma, Statista, HRI, Evaluate MedTech, Cowen, Market Research, Expert Interviews

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Get to know the Austin region

• Population of the Austin metropolitan area

• Largest metro in the United States

• Highest labor force participation

• University students at 25 area colleges and universities

• Highest educational attainment among top 50 metros in the US

3

• 2.4M

• #26

• 3^rd

• 160K+

• 4^th

• Source: Lightcast

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The Austin region has unique assets that will fuel the growth of the life sciences ecosystem

• Network of private and public institutions

• Home to over nearly 300 life sciences-related companies with over 21K employees
• UT Austin, a top 10 public university, located minutes from downtown Austin

• Multi-disciplinary research

• ~$1B life sciences research funding through academic and corporate institutions
• ~350 life sciences patents issued in the past three years

• Expansion of healthcare network

• $2.5B investment to launch the UT Austin Medical Center
• Major expansions of hospital systems, including #1 cancer center MD Anderson to Austin

• Premium real estate assets

• Pipeline of high-performance, purpose-built life sciences space throughout Austin with 1.5M+ SF of life sciences facilities under construction

• Source: Press search, USPTO, NSF HERD

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Why the Austin region is the right place for your life sciences business

• Key stakeholders across the Austin region have developed a shared vision to develop the region as a life sciences hub

• The Austin region has proven strengths in technology and tech-adjacent fields (e.g., computational science) that can be translated into life sciences

• The quality of life is unparalleled and leaders continue to advocate to make the Austin region attractive to people and businesses

• Large universities (e.g., UT Austin, Texas State) graduate talent in life sciences-specific fields; the Austin region has positive net migration from either coast

• A shared vision among stakeholders

• Strong foundation in tech

• Vibrant region with continued growth

• Talent as an advantage

• Foundation in place for life sciences innovation

• The Austin region ranks #6 in VC funding per capita in the US with strong innovation assets (e.g., incubators, accelerators)

• Source: Pitchbook, press search

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Austin leaders have aligned on a vision to expand the life sciences ecosystem in the region

• “If you think about Austin as you know and love it, this is that technology hub, that place where a venture capitalist, innovators, creators have all come together. And I would argue now is the time for that to extend to the life sciences… I know the city is excited about it. I know the business community is excited about it. Now, one of the ways that we can rally behind this idea is with an academic medical center, with a top medical school in conjunction with the other assets of this University to really make Austin the next hub for life science technology and innovation”

• Jay Hartzell, Ph.D., President of UT Austin¹

• “Our rising Innovation District brings new strengths in health and life sciences together with existing capabilities in engineering and data analytics. It is the convergence of one of the country’s pre-eminent academic institutions and a vibrant landscape of companies, supercharged by Austin’s creative and entrepreneurial culture”

Kirk Watson², former Texas State Senator and current Mayor of Austin

• Source: Press search

1. State of the University address, September 2023

2. Austin Innovation District annual review

• “We are a region of communities. And I’m excited that frameworks like the health and life science ecosystem are adopting a hub and spoke approach – opening doors of opportunity for the workforce in Travis County and beyond”

Sarah Eckhardt², Travis County Judge

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The Austin region’s life sciences industry can build on existing strengths in tech and computational sciences

The Austin region has highest specialization in technology and analytics among other clusters¹ with synergies with life sciences

The Austin region has 2x the talent concentration of software engineers than the average US city

Regional research assets include high powered computing at Texas Advanced Computing Center and the Oden Institute collaborating with researchers in certain therapeutic areas (e.g., oncology)

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Strong network of anchors including 9 of the 10 highest-revenue US tech companies which have emerging life sciences applications

“AI and medicine is perhaps the most attractive new investment opportunity I’ve seen”

- Jim Breyer, venture capitalist

1. Specialization measures how concentrated an industry cluster is in a given region compared to the nation. Based on 2022 employment.

• Source: Lightcast, press search

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The Austin region has a deep talent pool

• Companies have access to existing talent in the region

• The region is attracting talent from across the United States

• Positive net migration of 19K+ new residents each year¹ from across the US, notably from life sciences national leaders such as the Bay Area, NYC, and Boston
• Highly educated talent is coming to the region, with over ~1/3 of movers to the region having a Bachelor’s degree

• Source: United States Census Bureau Job-to-Job Flows, United States Census Bureau ACS S2301 Table, Lightcast, web search

Well-educated population base

• 53% of the Austin working population have a Bachelor’s degree or higher, and the region has high specialization in several top life sciences programs, including biology, biochemistry, and microbiological sciences and immunology
• Top colleges and universities, such as: University of Texas at Austin, ranked #9 among national public universities (US News & World Report), Texas State ranked #1 best BSN program in Texas (Nursing Progress)
• Strength in two-year universities, including: Texas State Technical College ranked #1 in Texas among two-year institutions (Niche.com), Austin Community College named best Associate Degree in Engineering degree programs nationwide (Intelligent.com)

Highly skilled life sciences workforce

• ~1,900+ life sciences degree completions from Greater Austin universities in 2022
• Roughly 1/3 of life sciences graduates stay in the Austin region after graduation
• Tech-focused life sciences occupations (e.g., operations research analysts, data scientists) are more 1.5-2x specialized in Greater Austin than the US

1. Reflects average annual net migration from 2017 to 2022 of persons aged 16+ based on job-to-job flows

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Infrastructure is in place for life sciences innovation

• Research and development is growing

• $9.4B

• Research and development dollars from businesses in the Austin region¹; academic R&D represents another ~$1B with ~20% currently focused on life sciences

• 140+

• Life sciences patents developed per 1M people in the Austin region, ranking 14^th among the top 50 metros (MSAs) in the US

• Tier 1

• Research university with UT Austin in Central Austin with top 10 programs in engineering and computer sciences; Texas State recently exceeded $100M in research expenditures in FY22²

• Funding is abundant with a demonstrated ability to scale innovation

• in overall VC dollars per capita amongst the top 50 MSAs ³ (2020 – 2022)

6th

• Growth in life sciences VC in Austin between 2018-2023

137%

• Largest investor city for angel and VC investors funding life sciences startups

15th

• Incubators

• Active regional innovation support network

• Accelerators

• Investment support

1. NSF HERD, 2021

2. Texas State website

3. For percent change, compared averages of 2018-2019 to 2022-23 to account for large annual fluctuations

NON-EXHAUSTIVE

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• Vibrant region with continued growth

• The Austin region is a good place to live and do business

The Austin region has experienced GDP growth of 57% from 2016-2021, highest among select peers and has been ranked the top place to live in Texas according to US News and World Report’s 2023 survey

There are ample business incentives including the state-level Jobs, Energy, Technology and Innovation program that reduces property taxes for new manufacturing, research and development facilities

• Cultural events that attract innovation

• The Austin region is home to the annual SXSW conference, Life Science and Healthcare Innovation Summit, and a series of other key events to convent life sciences thought leaders

• Burgeoning Innovation District

• Developing Innovation District in the heart of the Central Business District with real estate with close proximity to the city’s major research university, development of two new hospitals and an upcoming effort to revitalize I-35 and further enhance vibrancy

• The Austin region boasts the highest parks per capita among peer cities¹, a live music hub with multiple annual music festivals, and eight James Beard award semifinalists in 2024

1. Peers include Dallas, Houston, San Diego, Boston, Raleigh-Durham, Charlotte and Nashville

• Dynamic regional culture

• Source: Lightcast, Trust for Public Land, web search

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Specialization in MedTech in the region can serve as a catalyst for growth

• Texas Robotics partners with the private sector to explore research topics through shared infrastructure and capabilities
• Example partners include sparkcognition, Fox Robotics, Google, Amazon and more

Ecosystem partnerships and interdisciplinary research that can fuel innovation

Workforce specialization is building

• The Austin region has higher concentration¹ of orthopedics-related jobs than the US
• Job postings in NeuroTech in the region outsize other therapeutic areas within MedTech (e.g., cardio MedTech)

Funding momentum in the region

• Over $440M in VC funding in healthcare devices and supplies in the past five years, specifically within therapeutic devices and diagnostic equipment
• Dedicated capital firms to the growth of med devices and diagnostics headquartered in Austin (e.g., Revival Healthcare Capital)

• Incubators in the region with healthcare applications, including investment in prosthetics companies and diagnostics

NON-EXHAUSTIVE

1. Based on number of unique job postings; comparing 2018 and 2023 (latest full year available); search terms available in the Appendix

• Mulva Institute was launched at Dell Medical School with a $50M gift

• Source: Pitchbook, Lightcast, web search

NON-EXHAUSTIVE

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The Austin region is home to world class AI-enabled life sciences and digital health capabilities

• Fastest academic supercomputer in the country

• Research portfolio with over $108M in funding, with 130+ faculty

Regional assets to propel innovation

Talent pool is highly specialized in tech-related fields

• The Austin region is 1.5x more specialized in data scientists occupations than national average with demand growing at ~30% and 2x more specialized in Operations Research Analysts

Funding momentum in the region

• Over $5B of venture capital funding¹ allocated to Artificial Intelligence and Machine Learning in the Austin region in the past five years
• $740M of VC funding for Healthcare Technology Systems, highest among life sciences-specific areas

1. Pitchbook data, 2018-2023

• 8^th ranked computer science, engineering and artificial intelligence programs in the country; UT commitment to make 2024 the “Year of AI”

• 9 of the 10 highest revenue US tech companies call the Austin region home

9/10

• Source: Pitchbook, Lightcast, web search

NON-EXHAUSTIVE

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The Austin region has the groundwork for accelerate biologics

• Source: Pitchbook, Lightcast, web search

• Connection to the I-35 corridor, including less than 50 miles from San Antonio which boasts several key biopharma research facilities

Regional assets propelling innovation

Abundance of research to enhance innovation

• 7^th best pharmacy program in the country (US News & World Report) at a Tier 1 research institution

• Connection to the I-35 corridor, including less than 50 miles from San Antonio which boasts several key biopharma research facilities
• Texas Biologics, launched in 2022 at UT Austin as a translational research center focused on biologic therapy innovation,

• Collaborative wet lab space, start up support and industry partnerships through regional resources

Top educational programs in biology

• The Austin area graduates over 1,000 biology students and nearly 500 biochemistry students, biophysics and molecular biology with higher specialization than the US (LQ of 3.7 and 1.3, respectively)

NON-EXHAUSTIVE

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The addition of new clinical spaces and programming can further enhance efforts underway around clinical trials and life sciences enablement

• Investment to launch the University of Texas Medical Center, including a state-of-the-art specialty hospital

• #1 top ranked cancer center MD Anderson will expand its footprint to Austin; in FY23, MD Anderson spent over $1.2B on research

• Source: Pitchbook, Lightcast, web search

Texas Health Catalyst aimed at supporting the translation of promising ideas to products that improve health, supporting the 12+ patents from Dell Med inventors​

$2.5B

NON-EXHAUSTIVE

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