ChristianaCare, Delaware’s largest health system, received a one-notch credit-rating downgrade from Standard & Poor’s, to “AA” from “AA+’.
S&P attributed the downgrade of the nonprofit health system’s rating to inconsistent operating performance in recent years and the planned addition of $350 million in debt early this year through a bond offering, according to a report Tuesday.
In the year ended June 30, 2025, ChristianaCare’s financial results were weaker than expected because of low surgical volume related to physician turnover, S&P said. Another factor was higher-than-anticipated medical malpractice reserves, S&P said.
One of ChrisitianaCare’s financial strengths is that it typically gets half of its revenue from private insurers, which pay higher rates and are more profitable than Medicare and Medicaid, S&P noted.
Despite its strong financial condition, ChristianaCare has a relatively small service area, given its concentration in northern Delaware, compared to other health systems with “AA” ratings, S&P said. If ChristianaCare’s expansion into Southeastern Pennsylvania is successful, it would help alleviate that problem, the agency said.
ChristianaCare opened a micro-hospital in western Chester County last summer and is building a second one in Aston, Delaware County. It also has plans to put one in Springfield Township. In addition, ChristianaCare spent $50 million to step into the leases that the bankrupt Crozer Health had at five outpatient facilities in Broomall, Glen Mills, Media, and Havertown.
S&P said ChristianaCare has no plans for significant acute-care hospital expansion.
Last month, ChristianaCare and Virtua Health, South Jersey’s largest health system, ended negotiations on a possible merger.
Cencora Inc., a drug-distribution giant based in Conshohocken, is expanding its presence in oncology and retina care, two medical specialties that rely heavily on pharmaceuticals.
The company announced on Dec. 15 that it had agreed to buy out its private-equity partner in a national cancer practice management company, OneOncology, for $5 billion in cash and debt.
Cencora already owned 35% of OneOncology, which has a small presence in the Philadelphia area.
In January, Cencora spent $5 billion, including contingency payments, for Retina Consultants of America, a network of specialized practices withlocations in 23 states, including two in Pennsylvania outside the Philadelphia area.
The deals are part of Cencora’s effort to extend its reach into medical specialties that rely heavily on pharmaceuticals to treat patients. By positioning itself closer to patients, Cencora can capture more of the profit margin that goes along with selling drugs.
“We like those two spaces because they’re pharmaceutical centric,” Cencora’s CEO Robert Mauch said at the 2025 J.P. Morgan Healthcare Conference. He said the company doesn’t see other specialties with the same makeup as oncology and retina.
“That’s where we will continue to focus,” he said. “Now as we look forward, there could be other specialties. There could be other innovations in the pharma industry that create something in another area.”
Cencora had $321 billion in revenue in its fiscal year that ended Sept. 30. It had $1.5 billion in net income. That’s a great deal of money, but amounted to less than half a percent of its revenue.
McKesson and Cardinal Health, Cencora’s two biggest U.S. competitors in the drug-distribution business, face similarly narrow margins from drug distribution. Both also own companies that manage cancer practices. Among the benefits of owning the management companies is securing the customer base.
Cencora’s follow-up to 2023 deal
Cencora, then known as AmerisourceBergen, paid $718.4 million for a 35% stake in OneOncology in June 2023. That deal, in partnership with TPG, valued OneOncology at $2.1 billion. The seller was General Atlantic, a private equity firm that had invested $200 million in the Nashville management services company in 2018, according to the Wall Street Journal.
The deal announced last week valued OneOncology at $7.4 billion, including debt. The big increase in value came thanks to a doubling in the company’s size. OneOncology now has 31 practices with 1,800 providers who treat 1 million patients across 565 sites, according to the company.
Rittenhouse Hematology Oncology, which has offices in Bala Cynwyd, Brinton Lake, King of Prussia, and Philadelphia, became part of OneOncology last year.
Philadelphia’s nonprofit Senior Law Center has taken over two of the programs that the Center for Advocacy for the Rights and Interests of the Elderly (CARIE) operated before it abruptly shut down around Thanksgiving.
The Senior Law Center said this week in an email to supporters that it will continue CARIE’s work to support elderly crime victims under a two-year contract with the Pennsylvania Commission on Crime and Delinquency.
That contract is for $462,094 per year and has been reassigned to the Senior Law Center. The Senior Law Center has hired four of the five CARIE employees who were involved in that work. The fifth person had already accepted another job, a Senior Law Center spokesperson said.
Kathy Cubit, CARIE’s former advocacy director, has moved to the Senior Law Center, where she will continue her work on health equity and long-term care. Cubit chairs a group that monitors Pennsylvania’s implementation and development of Medicaid programs.
CARIE listed 26 employees on its website the week before it closed. Few details were available on why CARIE closed after nearly 50 years. Much of its work involved long-term care ombudsman services for the elderly in most of Philadelphia and in Montgomery County. It lost both of those contracts.
California biotech BioMarin Pharmaceutical Inc. will pay $4.8 billion in cash for Amicus Therapeutics, a Princeton rare-disease company with a presence in Philadelphia, the two publicly traded companies announced Friday.
The acquisition of Amicus, expected to be completed in the second quarter of next year, will give BioMarin treatments for rare genetic diseases that generated $599 million in revenue over the last 12 months, according to BioMarin, which is based in the San Francisco Bay Area.
Amicus has a treatment for Fabry disease, which is caused by a genetic mutation that allows fatty waste to build up in the body, damaging tissues and organs, according the BioMarin. The second treatment is for late-onset Pompe disease, which is an inherited genetic condition that causes muscle weakness that worsens over time.
BioMarin CEO Alexander Hardy said on a webcast about the deal that both of those treatments have the potential to reach $1 billion in global sales. BioMarin had $2.85 billion in revenue last year, compared to $528 million at Amicus.
The Philadelphia tie
In 2019, Amicus established its Global Research and Gene Therapy Center of Excellence at 3675 Market St. in University City, saying at the time that the facility would employ 200 people eventually. The company’s website now lists the location as its Research Center of Excellence.
Amicus now has 12 people in its Philadelphia office, a spokesperson said Friday.
John Crowley, chief executive of Amicus at the time, liked to call Philadelphia the “Cradle of Cures,” a name that hasn’t stuck. Crowley is now president and CEO of the Biotechnology Innovation Organization (BIO), a biotech trade organization in Washington.
Drexel University has signed a lease that will enable it to consolidate its College of Medicine research labs in University City, Drexel and the developers of a new building at 3201 Cuthbert St. said Thursday.
Drexel’s space in the $500 million building, a joint project from Gattuso Development Partners and Vigilant Holdings, is slated for completion in 2027. Drexel researchers moving from sites in Center City and East Falls are expected to fill four floors of the structure.
“By bringing our research spaces together in University City, we will create an environment that fosters greater interdisciplinary collaboration, accelerates innovation, and strengthens our collective capacity for discovery,” Drexel president Antonio Merlo said in a message to the school community.
Drexel will occupy 150,741 square feet of the 11-story, 520,000-square-foot building. The developers’ goal is to fill the rest of the building with life sciences tenants, though that could be harder than it was in 2022, when the building was announced as a partnership between Drexel and Gattuso Development.
The move of research labs to University City is part of a long-term plan to centralize the Drexel College of Medicine, which includes the combined operations of the former Hahnemann Medical College in Center City and the former Medical College of Pennsylvania in East Falls.
ChristianaCare and Virtua Health have ended merger negotiations that would have created a healthcare system with more than $6 billion in annual revenue and business in four states, the two nonprofits announced Thursday.
The nonprofits, the largest in South Jersey and the largest in Delaware, had disclosed a preliminary agreement to join forces in July. ChristianaCare and Virtua did not share specific reasons for dropping the idea.
They issued identical statements: “After thoughtful evaluation, both organizations have determined that they can best fulfill their missions to serve their communities by continuing to operate independently.”
It wasn’t obvious to industry insiders what advantages combining the two systems would have brought other than more revenue and the potential for some relatively small savings from greater scale.
Both systems are financially solid. Virtua has a AA- credit rating from Standard & Poor’s. The S&P rating for ChristianaCare is two notches higher, at AA+.
ChristianaCare explored an acquisition of Crozer Health in 2022, but decided not to go through with the deal. It won a May bankruptcy auction with a $50.3 million bid to assume Crozer leases at five outpatient locations in Delaware County. It has since opened 15 medical practices at those locations.
ChristianaCare previously acquired the shuttered Jennersville Hospital in Chester County and turned it into a micro-hospital. It plans two more micro-hospitals for Delaware County.
The five-hospital Virtua system had $3.24 billion in revenue last year. ChristianaCare, with three full-scale hospitals, had $3.3 billion in revenue in the year that ended June 30, 2025.
Capstan Therapeutics’ sale this year for $2.1 billion, the highest price paid for a private early-stage biotech company since 2022, was a triumph for its founders at the University of Pennsylvania.
Unfortunately for Philadelphia, the company is based in San Diego. Investors wanted an executive who lives there to be CEO.
Capstan was a miss for Philadelphia, said Jeffrey Marrazzo, who cofounded a high-profile regional biotech company, Spark Therapeutics, and is now an industry investor and consultant.
If Philadelphia had a bigger talent pool of biotech CEOs, “it would have and should have been here,” he said.
The Philadelphia region has lagged behind other biotech centers in landing companies and jobs, but industry experts are working to close the gap and better compete with Boston, the San Francisco Bay Area, and San Diego.
According to Marrazzo and others, the Philadelphia region’s relatively shallow pool of top biotech management is a key challenge.
Big investors go to managers who have proven ability to deliver big investment returns, said Fred Vogt, interim CEO of Iovance Biotherapeutics, a California company with a manufacturing facility in the Navy Yard.
“They want the company to perform. They’ll put it in Antarctica, if that was where the performance would come from,” he said.
The Lilly announcement last month also reflects Philadelphia’s national biotech stature. It’s the fourth U.S. city to get a Lilly Gateway Lab, behind Boston, the San Francisco Bay Area, and San Diego.
Those places have far outpaced Philadelphia in the creation of biotech research and development jobs, even as the sector’s growth has slowed.
From 2014 through last year, the Boston area added four biotech research and development jobs for every one job added here, according to an Inquirer analysis of federal employment data.
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Penn’s role in Philadelphia biotech
Philadelphia’s reputation as an innovation center — boosters like to call the region “Cellicon Valley” — starts with the University of Pennsylvania, which has long been a top recipient of National Institutes of Health grants to advance scientific discovery.
Research at Penn has contributed to the creation of 45 FDA-approved treatments since 2013, according to the university.
“Penn discoveries help spark new biotech companies, but we can’t build the whole ecosystem in this area alone,” said John Swartley, Penn’s chief innovation officer. “Great science is just one ingredient. We also need capital, experienced leadership, real estate and manufacturing infrastructure, and strong city and state support.”
Penn was one of two Philadelphia institutions receiving more than $100 million in NIH funding in the year that ended Sept. 30. The otherwas the Children’s Hospital of Philadelphia.
Katalin Karikó and Drew Weissman spoke at a University of Pennsylvania news conference after they were named winners of a 2023 Nobel Prize in medicine. Their work was instrumental to modifying mRNA for therapeutic uses, such as the rapid development of lifesaving vaccines during the COVID-19 pandemic.
By contrast, the Boston area was home to 10 institutions with at least $100 million in NIH grants, generating more spinoffs and jobs.
The Philadelphia region has a healthy number of biotech spinouts, but the biggest markets have more from a larger number of research institutions, said Robert Adelson, founder Osage University Partners, a venture capital firm in Bala Cynwyd.
That concentration of jobs and companies in the Boston area — where nearly 60,000 people worked in biotech R&D last year — makes it easier to attract people. By comparison, there were 13,800 such jobs in Philadelphia and Montgomery County, home to the bulk of the regional sector.
If a startup fails, which happens commonly in biotech, “there’ll be another startup or another company for me to go to” in a place like Boston, said Matt Cohen, a managing partner for life science at Osage.
Another challenge for Philadelphia: It specializes in cell and gene therapy, a relatively small segment of the biotech industry, whose allure to investors has faded in the last few years.
Such market forces shaped the trajectory of Spark, a 2013 Children’s Hospital of Philadelphia spinout that developed Luxterna, the first FDA-approved gene therapy, used to treat an inherited form of blindness. The promise of Spark’s gene therapy work for a form of hemophilia spurred its 2019 acquisition by Swiss pharmaceutical titan Roche for $4.8 billion.
The company still employs about 300 in the city, a spokesperson said, and work continues on its $575 million Gene Therapy Innovation Center at 30th and Chestnut Streets in University City.
The long arc of biotech
A handful of companies dominated the early days of U.S. biotech. Boston had Biogen and Genzyme, San Francisco had Genentech, San Diego had Hybritech, and Philadelphia had Centocor. All of them started between 1976 and 1981.
Centocor started in the University City Science Center because one of its founders, virologist Hilary Koprowski, was the longtime director of the Wistar Institute. Centocor’s first CEO, Hubert Schoemaker, moved here from the Boston area, where he had gotten his doctorate at the Massachusetts Institute of Technology.
Another drug still under development at the time of the sale, Stelara, went on to become J&J’s top-selling drug as recently as 2023 with $10.9 billion in revenue. Stelara, approved to treat several autoimmune disorders, remains a testament to Centocor’s legacy.
Despite its product success, Centocor didn’t have the same flywheel effect of creating new companies and a pipeline of CEOs as peer companies did in regions outside of Philadelphia.
The University of Pennsylvania’s Smilow Center for Translational Research, shown in 2020, is one of the school’s major laboratory buildings.
“There are a lot of alums of Centocor that are really impressive, but they seem to have wound up elsewhere,” said Bill Holodnak, CEO and founder of Occam Global, a New York life science executive recruitment firm.
Among the Centocor executives who left the region was Harvey Berger, Centocor’s head of research and development from 1986 to 1991. He started a new company in Cambridge, Mass.
At the time, the Philadelphia area didn’t have the infrastructure, range of scientists, or management talent needed for biotech startups, he said.
Since then, he thinks the regional market has matured.
“Now, there’s nothing holding the Philadelphia ecosystem back. The universities, obviously Penn, and others have figured this out,” Berger said.
Conditions have changed
Penn’s strategy for helping faculty members commercialize their inventions has evolved significantly over the last 15 years.
It previously licensed the rights to develop its research to companies outside of the area, such as Jim Wilson’s gene therapy discoveries and biochemist Katalin Karikó and immunologist Drew Weissman’s mRNA patents. Now it takes a more active role in creating companies.
Among Penn’s latest spinouts is Dispatch Bio, which came out of stealth mode earlier this year after raising $216 million from investors led by Chicago-based Arch Venture Partners and San Francisco-based Parker Institute for Cancer Immunotherapy.
Dispatch, chaired by Marrazzo, is developing a cell therapy approach that uses a virus to attach what it calls a “flare” onto the cells it wants the immune system to attack.
Marrazzo said in July that he wasn’t going to be involved in Dispatch if it wasn’t based largely in Philadelphia. As of July, 75% of its 60 employees were working in Philadelphia. Still, Dispatch’s CEO is in the San Francisco Bay Area.
The Philadelphia region is increasingly well-positioned for the current biotech era, said Audrey Greenberg, who played a key role in launching King of Prussia’s Center for Breakthrough Medicines about five years ago. The center is a contract developer and manufacturer for cell and gene therapies.
“You no longer need to move to Kendall Square to get a company funded,” she said, referring to Cambridge’s biotech epicenter. “You need good data, a credible translational plan, experienced advisers, and access to patient capital, all of which can increasingly be built here.”
Greenberg now works as a venture partner for the Mayo Clinic, with the goal of commercializing research discoveries within the health system’s network of hospitals in Minnesota, Arizona, and Florida.
She plans to bring that biotech business to the Philadelphia region.
“I’m going to be starting my companies all here in Philadelphia, because that’s where I am. And I know everybody here, and everybody I’m going to hire in these startups that are going to be based here,” she said.
The University of Pennsylvania launched a fund backed by $10 million from the university to make seed investments in companies founded by Penn researchers, officials announced Monday.
The fund, called StartUP, will invest up to $250,000 in companies founded by Penn researchers and based on innovations created at the university. Any profits will be put back into the fund, Penn said.
“This new fund addresses the critical need for seed investment capital at the earliest stages of company formation and will further accelerate innovation across the university,” Penn’s vice provost for research, David Meaney, said in a statement. Meaney is on the faculty at Penn’s School of Engineering and Applied Science.
The university’s Office of the Chief Innovation Officer will manage the fund. The innovation office will evaluate applicants with the help of external advisers. Factors in investment decisions include overall feasibility and commercial potential.
The new investment fund builds on efforts already underway at the Penn Center for Innovation, the Wharton School, and Penn Medicine, which in 2018 started a fund to invest $50 million in biotech companies.
Penn has led the nation recently in licensing revenue from faculty inventions, thanks largely to revenue from COVID-19 vaccines that were based on mRNA technology developed 20 years ago by Penn researchers Drew Weissman and Katalin Karikó.
Bancroft, a South Jersey nonprofit provider of services for people with intellectual and developmental disabilities, has hired Gregory Passanante to succeed Toni Pergolin as president and CEO.
Passanante, who will be the 10th president in the organization’s 143-year history, is scheduled to start Jan. 7.
Since 2023, Passanante has been northeast market administrator for Shriners Children’s Hospital Philadelphia. Before that, he was chief nursing officer at Wills Eye Hospital.
Passanante will take over a Cherry-Hill-based organization that is in solid financial condition, especially compared to 2004 when Pergolin arrived as chief financial officer and had to worry about making payroll because the organization was so weak financially.
In the 12 months that ended June 30, the nonprofit had operating income of $13 million on $284 million in revenue, according to its audited financial statement. Bancroft had 1,642 clients and employed 2,853 people on a full-time basis at the end of the fiscal year.
Children’s Hospital of Philadelphia was the most profitable nonprofit health system in Southeastern Pennsylvania during the three months that ended Sept. 30, according to an Inquirer review of financial filings.
CHOP reported $70 million in operating income in the first quarter of fiscal 2026, up from $67 million the same period a year ago. The nonprofit’s revenue climbed nearly 9% to $1.3 billion.
The biggest loss in percentage terms was at Redeemer Health, the region’s smallest health system and the only remaining operator with a single hospital. Redeemer had an $11.7 million operating loss on $103.4 million in quarterly revenue. That was an improvement over an $18.9 million loss last year.
Jefferson Health had the most patient revenue following its acquisition last year of Lehigh Valley Health Network. The 32-hospital system had $2.9 billion in patient revenue, $100 million more than the $2.8 billion at the University of Pennsylvania Health System, which has seven hospitals.
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Here’s a recap of selected systems’ results for September quarter:
Jefferson Health
Jefferson Health reported a $104 million operating loss, as its insurance business continued to drag down results. The loss included $19.4 million in restructuring charges for employee severance related to earlier job cuts and moves designed to make the system more efficient.
University of Pennsylvania Health System
University of Pennsylvania Health System had an operating gain of $109.3 million, up from $49.3 million in the same period a year ago. This year’s results include Doylestown Health, which Penn acquired April 1. Total revenue was $3.3 billion, up from $2.8 billion a year ago.
Temple University Health System
Temple University Health System’s loss in the quarter was $15 million, an improvement over a $17 million loss last year. Total revenue was $800 million, up 13% from $712.5 million a year ago. Outpatient revenue increased by nearly $62 million, much of it from the health system’s specialty and retail pharmacy business.
