Philadelphia is the newest destination for Lilly Gateway Labs, an incubator for early-stage biotech companies backed by pharmaceutical giant Eli Lilly & Co., the company announced Wednesday.

The Center City incubator will be Lilly’s fifth in the United States. Biotech hotbeds Boston, South San Francisco, and San Diego already have them. (South San Francisco has two.) Companies at those locations have raised more than $3 billion from investors since the program started in 2019, Lilly said.

Lilly’s Philadelphia operation will occupy 44,000 square feet on the first two levels of 2300 Market St. in Center City.

Lilly expects to house six to eight companies there, aiming to welcome the first startups to the site in the first quarter of next year, said Julie Gilmore, global head of Lilly Gateway Labs. She did not identify prospects.

Typically, Gateway Labs residents are at the stage of raising their first significant round of capital from investors, called Series A, and are two or three years from clinical testing, she said.

The arrival of high-profile Lilly, which has seen resounding success with its GLP-1 drugs for diabetes and weight loss, could turn out to be a shot in the arm for a local biotech scene. Philadelphia has a growing biotech sector but has lagged places like Boston, despite the presence of world-class scientists at local research universities. Their work has fueled groundbreaking discoveries in cell and gene therapy, as well as vaccines.

But Lilly is interested in supporting ideas that go beyond the city’s cell and gene therapy strengths, said Gilmore. Gateway labs is part of Lilly’s Catalyze360 Portfolio Management unit, which provides broad support to fledgling biotech firms, including venture capital.

“What we like is to go after innovative science. Who are the companies trying to solve really hard problems?” Gilmore said. “And we do know that Philadelphia has had a ton of success in gene therapy and CAR-T and I hope we can find some great companies in that space, but we’re going to be open to other types of innovative science as well.”

Expanding Philly’s life sciences footprint

Indianapolis-based Lilly already has a small presence in Philadelphia with Avid Radiopharmaceuticals Inc., a company it acquired in 2010. Avid still operates in University City. Lilly’s chief scientific officer, Daniel Skovronsky, founded Avid in 2004 after receiving a doctorate in neuroscience and a medical degree from the University of Pennsylvania.

Lilly is interviewing people to lead Philadelphia’s Gateway Labs location. They like to hire people who are familiar with the local universities and venture funds for those jobs, but that’s not all that matters. “We’re also looking for somebody who’s got deep drug development expertise,” Gilmore said.

Lilly’s incubator adds to the life sciences activity at 23rd and Market Streets.

Breakthrough Properties, a Los-Angeles-based joint venture of Tishman Speyer and Bellco Capital, announced plans for the eight-story, 225,000 square-foot building in 2022. Last week, Legend Biotech, which is headquartered in Somerset, N.J., celebrated the opening of a new cell therapy research center on the building’s third floor.

Lilly Gateway Labs companies agree to stay for at least two years, and they can apply for up to another two years, Gilmore said.

“The goal is, a company moves in and they can just worry about their science, worry about their team, and moving their mission forward, and we try to take care of everything else,” she said.

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