Long celebrated for its world-class pharmaceutical and medical device manufacturing, Puerto Rico is now leveraging this strong foundation to nurture a new era of research and development. Rather than shifting away from production, the island is integrating R&D directly into its manufacturing operations — from pilot plants and small-scale prototyping to advanced product development. With a skilled workforce, robust technical expertise, and supportive incentives, Puerto Rico is positioning itself not just as a production powerhouse, but as an emerging hub for cutting-edge innovation and scientific discovery.

 

Manufacturing Legacy: Help not Hindrance

Puerto Rico’s manufacturing legacy doesn’t directly create new biotech companies, but it has shaped an environment that deeply values quality, compliance, and technical excellence. This strong production base provides a supportive backdrop that can make the island more attractive for ambitious research ventures while playing host to the manufacture of global pharma and medtech’s most cutting-edge products.

As Ella Woger-Nieves, CEO of Invest Puerto Rico, explains, “Pharmaceutical and medical device companies increasingly embed R&D into their operations, using pilot plants and research facilities to develop and test products locally before scaling up.”

Companies like Johnson & Johnson and Medtronic, for example, have expanded their facilities on the island to include pilot labs and product development teams, embedding small-scale research within large-scale production sites.

Startups, in particular, are taking advantage of existing infrastructure rather than building entirely new facilities from scratch, which accelerates their timelines and reduces costs. OcyonBio, for example, has transformed a large facility in the northwest of the island into what CEO Robert Salcedo calls “an integrated biotech campus for gene and cell therapy startups.”

By providing turnkey GMP-ready space and services, OcyonBio enables emerging companies to “handle all aspects of production — from R&D to commercialisation — within a single facility,” eliminating the need to start from zero. According to the company, OcyonBio currently supports several cell and gene therapy organisations and is expanding significantly, with plans for eight additional buildings on its campus to scale manufacturing capacity and welcome more biotech ventures in the coming years.

Other service providers are also emerging. A 30-minute drive down the coast from OcyonBio sits CDI Labs, a Mayagüez-based contract research organization (CRO). Specialising in immunology and proteomics, CDI has developed a “human on a chip” protein array platform that enables high-resolution mapping of antibody-antigen interactions for its clients.

CDI Labs offers another example of how this production-focused culture supports new research efforts. Co-founder and COO Ignacio Pino highlights, “Here in Puerto Rico, we’ve developed a deep-rooted understanding of quality over the years. The concept of a quality department is widely recognised, and this awareness is ingrained within the local workforce. It is something that is sometimes overlooked in other ecosystems. As a result, Puerto Ricans tend to have an inherent understanding of what is required to maintain quality standards and achieve positive outcomes.”

 

Government Support

Puerto Rico’s move into more complex and high-ticket R&D activities has received significant governmental support in recent years, both from Washington DC as well as San Juan. Significantly, in 2023, the US Economic Development Administration designated Puerto Rico as one of just 31 national Tech Hubs and, notably, the only one focused specifically on biosciences.

Additionally, major tax advantages are helping attract more research-driven start-ups to the island. “Puerto Rico offers exceptionally appealing tax incentives for pharmaceutical companies engaging in R&D,” says Amarilys Silva-Boschetti, executive director of the Puerto Rico Consortium for Clinical Investigation (PRCCI), an organisation that offers specialised services for conducting clinical studies in Puerto Rico.

“Currently, companies can receive a tax credit of up to 50 percent on their investments in Puerto Rico, contingent upon presenting data that supports the impact of R&D investments.” According to the Puerto Rico Science and Technology Research Trust (PRSTRT), the number of clinical trials on the island doubled between 2015 and 2022, generating more than USD 50 million in economic impact.

These efforts have been bolstered not only by national policy shifts, but also by the work of local institutions spearheading innovation on the ground, chief among them the PRSTRT. CEO Lucy Crespo outlines how, over the past decade, the PRSTRT has focused on “the building blocks” of the innovation ecosystem, including funding individual researchers to the tune of over USD 16 million; creating a technology transfer office that now manages over 120 patented technologies; and launching an investment fund that provides access to venture capital for start-ups.

These building blocks have created fertile ground for homegrown innovation to take root. Local biotech success story MBQ Pharma, for example, used a combination of PRSTRT support, philanthropic donations, and a USD 4.4 million US Department of Defense grant to move its lead candidate, a novel compound that targets metastatic cancer, into trials. This milestone was – in the words of MBQ CEO José F. Rodríguez-Orengo “historic” as the first compound originating from Puerto Rican research (at the University of Puerto Rico) to reach clinical testing.

“The PRSTRT played a critical role early on, providing administrative support for patent licensing and financing for pre-clinical experiments for our candidate,” outlines Rodríguez-Orengo. “This early backing not only established our credibility but also positioned us as a leading example of the PRSTRT’s Advanced Research Grants Program.” However, demonstrating the path yet to travel for Puerto Rican innovation, MBQ could not conduct these trials in Puerto Rico as it had hoped and instead located them in mainland US.

Building on the success of pioneers like MBQ, the next generation of bioscience start-ups can lean on BioLeap, Puerto Rico’s first dedicated life sciences incubator. Launched in late 2023 and managed by PRSTRT, BioLeap is housed within the Forward Center in San Juan alongside the well-known tech accelerator Parallel18. “With BioLeap, we recently completed our first cohort,” says Crespo. “Eight companies participated, focusing on areas like medical devices and tech bio, and they collectively raised over USD 1.7 million in capital investment in less than three months.”

 

Missing Links and Next Steps

BioLeap’s early success shows the ecosystem’s promise. But for Puerto Rico to truly scale its innovation ambitions, critical gaps still need to be addressed. Eduardo Nicolau of the Molecular Science Research Center (MSRC) has a few thoughts.

Regulation is an area of concern. “One of the primary issues that has historically been missing was the regulatory framework,” explains Nicolau, whose institution is the University of Puerto Rico (UPR)’s first multidisciplinary research hub, housing over 300 researchers, students, and technicians. “In the 2000s, researchers from the UPR were not allowed to commercialise their inventions and – while this was rectified in 2010 – other jurisdictions resolved similar issues decades previously.”

He continues, “Additionally, there is a significant need for support in terms of resources; both economic and infrastructural. There aren’t many research labs or incubators on the island; while there are process development and manufacturing facilities, dedicated research spaces are limited.”

While Puerto Rican officials tout the island’s highly educated workforce (it leads the nation in the percentage of its workforce employed in science, technology, engineering, and mathematics (STEM) fields) as a key potential contributor to its innovation push, others are more critical. Arthur Deboeck of Galephar instead identifies the Puerto Rican education system as an inhibitor to innovation on the island.

“While there is a strong desire for innovation in Puerto Rico, there is still something of a gap between aspiration and reality,” states Deboeck, a chemical engineer with more than 50 years of expertise in drug delivery systems. “I would like to see a more rigorous, multi-year commitment to PhD programmes, which would then result in higher-quality research and critical thinking,” he muses.

There is also the issue of retaining those young professionals of sufficient calibre. Puerto Rico has long struggled with emigration, one-third of people born on the island now live in the mainland US, and STEM-skilled professionals are overrepresented among those who leave. This trend, driven by economic uncertainty and natural disasters, complicates efforts to build a sustainable R&D workforce.

Then there are the challenges for local biotech start-ups of attracting the investment they need. This is no mean feat, as MBQ’s Rodríguez-Orengo lays out. “One of the primary hurdles is the limited awareness of the biotech sector among local investors, who are predominantly focused on technology ventures. Biotech requires a deeper level of expertise and understanding, and the absence of this knowledge often leads to hesitancy. Investors tend to favour familiar areas, leaving innovative fields like biotechnology underfunded and underexplored.”

However, the investment landscape is rapidly evolving. “While Puerto Rico may not have as many traditional VC funds or large private equity funds like those in other jurisdictions, there is a significant amount of activity from sophisticated individual investors,” counters Colton Wandke, co-founder and partner at DECA, a consulting firm focused on helping businesses in Puerto Rico access non-dilutive financing incentives, such as federal grants, local grants, and monetisable R&D tax credits.

“These investors often pool their resources and make strategic investments. It is not always newsworthy since these investments don’t come from traditional large-scale venture capital firms, but there is a lot of private investment happening, which continues to grow.”

 

Building on Success Stories

Despite the challenges, momentum is building. And for every challenge, there is a company proving what is possible. Those early pioneers now stand as case studies for others to follow and examples of how Puerto Rican R&D is already a reality.

“When we speak to investors about some of the incredible work being done here, we highlight companies like Cytoimmune Therapeutics, who have been making great strides, particularly in NK cell therapies,” says DECA’s Wandke. “Then there’s OyconBio, which is building a major hub for gene and cell therapies. MBQ Pharma is another team making great advancements in cancer research. These are just some of the vibrant and innovative businesses that investors might not always hear about, but they demonstrate the creativity and potential of Puerto Rico’s business ecosystem.”

CDI Labs’ Pino agrees. “In established ecosystems, success stories are common, but here we are still laying the groundwork. By focusing on what is working well, we can draw attention to Puerto Rico’s potential and open doors for future growth.”