Life Sciences
Sections: Overview Project activity Key considerations
Life Sciences
Sections: Overview Project activity Key considerations
The North American life sciences sector is evolving rapidly but faces challenges from labor shortages and trade uncertainties. The growing trend toward flexible design, digital innovation and resilient supply chain will help sustain growth.
Eugene Adendorff Director, Americas
Overview
The US life sciences sector is undergoing a significant transformation, driven by evolving investment strategies, technological advancements, and regulatory shifts. While smaller-scale cell and gene therapy projects have slowed due to high costs and clinical risks, large-scale biologics, API, and fill-finish projects are thriving.
Looking ahead, the market is poised for continued CAPEX investment, strategic reshoring of manufacturing, and a sustained focus on high-demand therapies. With strong policy support and rapid advancements in biopharmaceutical production, the US is set to maintain its leadership position in global life sciences innovation. The United States continues to dominate the global life sciences sector, commanding nearly 70% of total deal value in 2024.¹ Investors are shifting toward larger, more strategic deals, prioritizing established players and high-impact therapies. Oncology remains the top-funded therapeutic area, with cardiology, immunology, and neuroscience gaining traction as emerging investment hotspots. Despite a cautious VC climate, CAPEX investment in pharmaceutical manufacturing is surging. Major pharmaceutical companies are increasing US production capacity, driven by the need for supply chain resilience, the rapid rise of biologics and gene therapies, and evolving regulatory standards. Manufacturing is undergoing a seismic shift, with companies investing in cutting-edge facilities, single-use bioreactors, and continuous manufacturing systems to fuel the next wave of innovation. The demand for specialty drugs targeting rare and chronic diseases is further accelerating the push for advanced production capabilities.²
In terms of infrastructure, the construction of lab and R&D spaces is expected to slow down due to oversupply. On the other hand, manufacturing activity is expected to rise, driven by significant investment from leading pharmaceutical companies in the sector. New tariff policies are causing biopharmaceutical companies to rethink their global strategies. Trade uncertainty has already led some firms to relocate clinical trials and manufacturing operations to the US or other tariff-free regions. Several large pharmaceutical companies announced major domestic expansions in late 2024, reinforcing the shift toward onshoring production and reducing dependence on foreign suppliers.
Trends
- AI is revolutionizing the life sciences sector by expediting drug development, optimizing clinical trial processes, and improving operational efficiencies.
- There is a growing trend toward flexible, modular facility designs, and standardizing facility designs across regions to benefit from economies of scale and expertise.
- New tariff policies may require repurposing production lines and equipment in the life sciences sector to improve speed to market.
- The sector is moving towards a collaborative environment that promotes innovation across labs, manufacturing facilities, and workspaces. These spaces are evolving to support advancements driven by ethical AI, personalized medicine, and sustainable design.
- The contracting strategies being used largely depend on the type of facility. However, EPCM (Engineering, Procurement, Construction, and Management) contracts are the preferred model in the US.Looking ahead, the market is poised for continued CAPEX investment, strategic reshoring of manufacturing, and a sustained focus on high-demand therapies. With strong policy support and rapid advancements in biopharmaceutical production, the US is set to maintain its leadership position in global life sciences innovation.
Project activity
United States
The US continues to see dominance from established life science hubs such as Boston, San Francisco, San Diego, and the Raleigh-Durham metro area. Massachusetts leads in the pipeline for research facilities, followed by California and New York, establishing their positions as key players in innovation. Meanwhile, Indiana, Puerto Rico, and North Carolina led the pack in pharmaceutical and medicine manufacturing exports in 2024.³ Indiana is emerging as a key player, leading in planned projects with nearly 20% of total project value, highlighting its rising importance in the sector. Other states poised for significant pharma manufacturing investments include California and New York, while Texas and New Jersey are fast becoming emerging life sciences hubs. However, the sector saw a slowdown in momentum, with new project announcements in 2024 dropping by nearly 14% compared to the previous year.⁴
Canada
In Canada, nearly 52% of upcoming life science projects are in Ontario. The province also accounts for nearly 62% of total projects by value. In terms of project announcements, Canada has witnessed a notable decline since 2023 likely due to funding pressures.4 Nevertheless, this sector continues to gain significant investment from the government which fuels its growth and potential. The Government of Canada has committed over CA$2.3bn to support 41 initiatives aimed at advancing biomanufacturing, vaccine development, and therapeutics.⁵
Key considerations
01
Contractor and skilled labor shortages
The US life sciences sector is facing a significant challenge due to a shortage of skilled labor and specialized contractors needed for building and retrofitting facilities, especially in biopharmaceuticals and manufacturing. The high demand for skilled workers, driven by rapid industry growth, is causing traditional areas like North Carolina, historically focused on research rather than workforce development, to struggle with a talent and contractor shortage.
This challenge is also noticeable in Indiana, where rapid growth in life sciences, data centers and EV manufacturing has tightened the labor pool. To tackle this, the industry is expanding apprenticeships, recruiting more women and younger workers, and leveraging AI and prefabrication to enhance efficiency and attract talent.
02
Supply chain
Trade tensions, potential passing of the Biosecure Act (which aims to protect national security by restricting US government contracts and funding for biotechnology companies with links to foreign adversaries) and global tariffs on US imports may disrupt supply chains by limiting partnerships with foreign suppliers. This could prompt companies to diversify or relocate their sourcing and manufacturing, resulting in increased costs and production delays for medical devices and pharmaceuticals. It is important for companies to evaluate their supply chains, comply with regulations, and create contingency plans for possible disruptions. Options include diversifying suppliers and exploring alternative sourcing strategies.
03
Material cost changes
Existing tariffs on aluminum and steel are already driving up construction costs, and growing uncertainty around broader tariffs is adding further pressure. This volatility in construction costs presents a challenge for budgeting and financial planning in life sciences construction projects.
04
Purpose-built infrastructure
The adoption of flexible and modular design is on the rise in this sector. The key trends in life sciences are focused on cell and gene therapies (such as CAR-T, stem cell, and gene editing), along with proteins, peptides, and nucleic acids. These developments require adaptable and customizable CL2/BSL2/PC2 lab spaces. During construction, focus should be on meeting the unique requirements of these spaces, ensuring compliance with industry standards while maintaining operational efficiency.
05
Transforming pharmaceutical facility design
The shift toward Pharma 4.0 is changing how pharmaceutical facilities are designed and built. It involves using advanced digital technologies, like live equipment tracking and optimized production workflows, to create smarter, more flexible, and self-sufficient operations. While this may increase initial construction costs, a phased implementation, modular designs, and scalability can help manage costs effectively.
Sources
- 2025 Healthcare & Life Sciences Outlook, PitchBook Data, Inc, December 16, 2024
- National Institutes of Health (NIH)
- Import/Export Price Indexes, U.S. Bureau of Labor Statistics, April 2025
- Global Data
- Government of Canada investing $60 million in Boucherville biomanufacturing project, Government of Canada, March 18, 2025
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