Novartis will expand in Cambridge

Drug maker signs lease deal, plans to build a new facility

By Casey Ross
Globe Staff / May 8, 2009
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The pharmaceutical giant Novartis AG is planning to build a new facility on Massachusetts Avenue in Cambridge, in the shadow of the Massachusetts Institute of Technology.

Novartis, based in Basel, Switzerland, has signed a long-term lease for property at 181 Massachusetts Ave., which is currently a two-acre parking lot owned by MIT. Already Cambridge's largest employer, Novartis is likely to build a research facility on the site, although no final decisions have been made.

"We're committed to Cambridge. This is a long-term investment," said Mark Fishman, president of the company's institute for biomedical research. "We have found it particularly beneficial to have the relationship with MIT, Harvard, and the hospitals in the neighborhood."

Novartis already occupies more than a million square feet in Cambridge, much of it in the former Necco candy factory near Central Square. The location is home to its global research unit, and Novartis has recently located its vaccines and diagnostics division in Cambridge, too.

Altogether it has about 2,000 employees, split among 10 buildings, near Kendall Square and in research parks along Massachusetts Avenue.

The Cambridge expansion bucks the trend of biotech firms and other companies moving out of the urban core to the suburbs, where office space is generally cheaper and businesses have more flexibility to expand and to customize facilities. Among those that have left Cambridge is Shire Pharmaceuticals' genetics operations, which decamped to Lexington.

Novartis executives said the Cambridge location gives them access not only to new recruits at MIT and Harvard, but opportunities to collaborate with researchers at universities and teaching hospitals.

Real estate specialists said leasing activity in Cambridge is beginning to pick up and that the out-migration of companies has mostly been driven by the need to save money in the soft economy.

"Cambridge continues to be the center of the life-sciences universe for all of the obvious reasons, and that's not going to change," said Mark Winters, of the real estate firm Cushman & Wakefield.

Novartis has an array of cancer and diabetes drugs being developed in Cambridge that could be submitted for approval in the next few years. The firm's executives would not disclose details of the 181 Massachusetts Ave. lease, saying only that it is a long-term contract and that the company eventually intends to build on the property. It has not decided on details for a new building but has hired the Boston real estate firm Leggat McCall to help plan the project.

Steve Marsh, the head of real estate for MIT, said the property could accommodate a building of about 250,000 square feet. He said the university, which began leasing space to Novartis when it first moved to Cambridge, intends to continue building in the area.

"In general, MIT has been trying to continue building an innovation cluster in and around Cambridge and the MIT campus," he said. "It's worked for area business and for the City of Cambridge in terms of tax dollars."

MIT recently won city approval to construct a 450,000-square-foot research building on Main Street that it intends to lease to private companies.

Casey Ross can be reached at