Durham biotech company ends 878-jobs deal near RTP. Here’s why.
BioAgilytix, a Durham firm that performs clinical drug research, asked out of its state incentive agreement that promised to create 878 jobs near Research Triangle Park, citing a difficult funding climate for life science companies.
On Tuesday, the N.C. Economic Investment Committee obliged, officially canceling the $18 million-plus job development investment grant (JDIG).
In a March 4 letter to the committee, BioAgilytix’s chief financial officer, Maureen Marchek, wrote the company has stopped growing its headcount due to “downturns in biotech funding in the last two years.”
“We have re-focused our strategy for 2024 and beyond, with our primary goal to generate as much return on investment as possible based on our current infrastructure and employee base,” Marchek said.
Founded in 2008, BioAgilytix still employs 523 workers in the Triangle area, up from around 350 workers in 2020. At the time the incentive was announced, BioAgilytix was working on more than 800 projects, including dozens of COVID-19 treatments. The company said it had run out of space at its laboratories in Durham, Massachusetts and Germany.
The firm had pledged to add close to 900 jobs in North Carolina between 2023 and 2027 at a minimum average salary of $96,500. But biotech companies have faced stronger headwinds to fundraising in recent years as interest rates rose from historic lows. Venture capital investing in biopharmaceuticals last year fell nearly 20%, according to the financial database PitchBook, from $36.7 billion in 2022 to $29.9 billion.
North Carolina had not sent any taxpayer dollars to BioAgilytix under the incentive agreement, N.C. Commerce spokesperson David Rhoades told The News & Observer. JDIGs are the state’s chief economic incentive, awarding recipients payroll tax benefits after they meet mutually agreed upon hiring and investment goals.
The company would have received $18.9 million from the state if it met its employment targets, plus nearly $400,000 from Durham County. It is not uncommon for the state to cancel JDIG agreements — even before any public money is doled out to companies. Since the program began in 2003, around 1 in 5 incentive projects have ended this way, an N&O analysis found.
Already this year, the Swiss bank Credit Suisse exited its jobs deal in Research Triangle Park, the Raleigh telecommunications software firm Bandwidth left its incentive deal in Raleigh, and Clorox ended its JDIG to add 158 jobs in Durham.
This story was originally published March 26, 2024 at 5:40 PM with the headline "Durham biotech company ends 878-jobs deal near RTP. Here’s why.."
