American biotechnology is booming

The pandemic has highlighted the promise of clever new drugs—and the firms developing them

IN 1908 ASHTON VALVE COMPANY built a factory on the corner of Binney Street and First Street in Cambridge, Massachusetts. In what was a high-tech industry of the day, it made gauges, valves, whistles, clocks and other gadgets that helped make steam boilers less susceptible to blowing up and killing people. Just over 100 years later, in 2010, another purveyor of a life-saving technology moved into Ashton’s long-abandoned premises: Moderna.

In the past year the biotech darling has become synonymous with the fight against covid-19. Its ingenious mRNA vaccine has, like a similar one developed by Pfizer, an American drug giant, and BioNTech, a German startup, saved millions of lives. Moderna’s success has also brought attention to America’s biotechnology industry, a lot of it centred on Cambridge. Home to Harvard University and the Massachusetts Institute of Technology, it is the closest that the biotech business currently has to a Silicon Valley.

And the industry is booming. Since 2010 an index of biotech firms listed on the Nasdaq exchange has quintupled in value (see chart), and the number of companies in it has more than…