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.
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.
Temple University Health System reported a $15 million operating loss in the three months that ended Sept. 30.
The result for the first quarter of fiscal 2026 was an improvement from the North Philadelphia nonprofit’s $17 million loss last year.
“We’re pretty happy where we are,” CEO Mike Young said Wednesday. Revenue was above budget and labor costs were on budget in the first quarter for the first time in several years.
Here are some details:
Revenue: 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.
Temple participates in a federal program for safety-net hospitals that allows it to buy certain drugs at a discount and then get full reimbursement from insurance companies.
Expenses: Temple noted in its report to municipal bond investors Tuesday that salaries, including higher pay rates for nurses, and higher drug spending for outpatient infusions and other pharmacy business were the biggest expense increases.
Notable: On the labor front, several job categories remain hard to fill, Young said. Those are CT techs, nurse anesthetists, and lab techs. “Other than those three [specialties], it’s not where it was three years ago, where you couldn’t find anybody,” he said.
A lawsuit filed Tuesday in Philadelphia accused Jefferson Health of violating federal labor rules when it laid off 1% of its 65,000 employees in October and this month without providing a 60-day notice.
The purported class-action lawsuit says the proposed lead plaintiff, Ciara Brice, lost her job as a medical assistant on Nov. 12 with no notice and has not received the severance pay she was promised.
Brice was not available for comment, said her lawyer, Jeremy E. Abay, with Philadelphia law firm Pond Lehocky Giordano Inc.
The Worker Adjustment and Retraining Notification Act has a complicated rubric for determining when a mass layoff requires advance notification, which is filed with state labor departments. One of the triggers is an employer cutting at least 500 jobs, according to Abay.
Even though the layoffs happened throughout Jefferson’s entire footprint from South Jersey to near Scranton, Abay said notice is required because Jefferson operates as a single entity.
“We believe the facts will show that there was no violation of the federal WARN Act,” Jefferson said in a statement.
The nonprofit filed a notice of 108 layoffs at Jefferson Cherry Hill Hospital, Jefferson Stratford Hospital, and Jefferson Washington Township Hospital because New Jersey has its own rules, Abay said.
The nonprofit, which grew through acquisitions from three hospitals in Philadelphia in 2015 to more than 30 now, provided no details when it announced the layoffs in mid-October.
That layoff was part of a series of large job cuts starting in the summer of 2023, but may have been the first time patient-facing workers like Brice were hit.
The lawsuit seeks back pay, benefits, and damages for each laid-off employee who did not receive a 60-day notice.
Editor’s note: The headline on this article has been updated to clarify that a lawsuit claims violations.
A Philadelphia jury reached $35 million verdict last week against Main Line Health and the University of Pennsylvania Health System for a cancer misdiagnosis that led a then-45-year old Philadelphia resident to undergo a total hysterectomy in 2021.
Main Line discovered later that the biopsy slides used to make the diagnosis in February 2021 were contaminated. The cancer diagnosis was due an error that involveda second person’s DNA, not that of the plaintiff, Iris Spencer, who did not have cancer.
Main Line settled with Spencer in 2022 for an undisclosed amount, so it won’t have to pay its share of the verdict.
The jury found Penn and its physician, Janos Tanyi, a gynecological oncologist, liable for $12.25 million, or 35%, of the total awarded in damages for her unnecessary hysterectomy. The lawsuit said Spencer suffers from “surgically-induced menopause.”
The lawsuit against Penn and Tanyi said the physician did not do enough to resolve a conflict between biopsy results at Main Line and those at Penn, where Spencer sought a second opinion.
A Penn biopsy did not find cancer. Other tests were also negative, but Spencer did not know about those results.
“The verdict affirms the central importance of the patient and the doctor’s obligation to inform the patient of all of the test results, of all of her options, and that she shouldn’t be dismissed because she’s a patient and not a doctor,” Spencer’s lawyer, Glenn A. Ellis, said Monday.
The $35 million verdict is Philadelphia’s largest this year for medical malpractice, according to data from the Philadelphia Court of Common Pleas.
Medical malpractice costs have been rising throughout healthcare. A factor in Pennsylvania is a 2023 rule change that allowed more flexibility in where cases can be filed.
Spencer’s troubles started in February 2021 at Main Line’s Lankenau Medical Center where her biopsy found that she had cancer in the lining of her uterus despite the lack of symptoms.
For a second opinion, Spencer saw Tanyi at Penn a few days later. A repeat biopsy came back negative, according to Spencer’s complaint that was filed in early 2023. Tanyi also performed other tests, all of which came back negative, but he did not share that information with Spencer, the complaint says.
After Tanyi performed the complete hysterectomy on March 8, 2021, Penn’s pathology laboratory found no cancer in the tissues that had been removed from Spencer’s body.
That’s when Spencer, who has since moved to Georgia, went back to Lankenau seeking an explanation. Seven months later, Main Line informed her that she never had cancer.
Main Line and Spencer subsequently “reached an amicable full and final settlement to resolve and discharge all potential claims for care involving the health system,” Main Line said in a statement. Main Line did not participate in the trial.
Penn said in a statement: “We are disappointed by the jury’s verdict in this case that was unmoored to the evidence presented at trial on negligence and damages. Our physician reasonably relied on the pathology performed at a hospital outside our system that revealed a very aggressive cancer.”
Penn said it plans to appeal the verdict, which could increase by more than $2 million if the court approves a motion for delay damages that Ellis filed Saturday.
Temple University Health System‘s medical malpractice expenses have surged in the two years that ended June 30 as part of a campaign to reduce financial risk by settling old cases.
The hope is that “aggressively” settling cases will pay off over the next few years by reducing medical malpractice expenses, Michael DiFranco, the health system’s chief accounting officer, told investors during a conference call last week on the health system’s fiscal 2025 financial results.
Temple’s annual medical malpractice expenses increased nearly fourfold, to $117.8 million in fiscal 2025 from $31.6 million two years ago. Over the same period, it cut its reserves for future expenses by $88 million, or 22%. Temple’s reserves peaked at $402.9 million in 2023.
Rising medical malpractice costs are reverberating throughout healthcare. Tower Health recently boosted its reserves after its auditor decided they should be higher to deal with anticipated claims. Lifecycle Wellness, a birth center in Bryn Mawr, blamed its decision to stop delivering babies in February in part on rising medical malpractice costs.
The average number of medical malpractice lawsuits filed in Philadelphia every month has risen from 34 and 35 in the two years before the pandemic to 51 last year and 52 so far this year, according to the Philadelphia Court of Common Pleas.In additional to lawsuits against hospitals, the tally includes litigation against physicians, nursing homes, and other healthcare providers.
Contributing to the increase was a rule change at the beginning of 2023 that allowed more cases to be filed in Philadelphia rather than the county where an injury occurred. Malpractice lawyers say they like to file in Philadelphia because the system for trying cases is efficient. Health systems often note that Philadelphia juries sometimes award large verdicts.
A ‘wake-up call’ at Temple
Temple Health started rethinking its medical malpractice strategy after John Ryan started as general counsel in January 2022. A month before he started, The Inquirer published an article about three suicides at Temple Episcopal Hospital in 2020. At least two of the families sued Temple.
“That was a wake-up call,” Ryan said in a recent interview on his approach to handling malpractice cases.
Then in May 2023, a Philadelphia jury hit Temple with a $25.9 million verdict in a case involving a delayed diagnosis of a leg injury leading to an amputation.
After that loss, Temple changed the kinds ofoutside lawyers it hiresto defend it in malpractice cases, Ryan said, swapping medical malpractice specialists for commercial litigators from firms like Blank Rome, Cozen O’Connor, and Duane Morris. Such lawyers cost more, but it’s paying off, he said.
“The settlements we’re getting from the plaintiff lawyers, because they can see that we’re serious, are much better,” Ryan said. The two Episcopal cases were settled this year for undisclosed amounts, according to court records. A birth-injury lawsuit against Temple University Hospital in federal court settled for $8 million this month.
In 2024, a jury awarded $45 million to a teen who was shot in the neck and suffered brain damage from aspirating food soon after his release from Temple. Temple appealed and the judge who oversaw the original trial ordered a new one. That case then settled at the end of October for an undisclosed amount.
The new approach has helped Temple reduce the number of outstanding cases at any one time to 65 or so now compared to 110 three years ago, according to Ryan.
Temple is using the money it is saving on malpractice costs to invest in better and safer care, Ryan said. “That’s not a byproduct of all we’re trying to do as the lawyers. It’s the goal,” he said.
Inquirer staff reporter Abraham Gutman contributed to this article.
Jefferson Abington Hospital has closed its inpatient behavioral health unit and will use the 23 beds to accommodate extra patients in its emergency department, the health system said this week.
Abington will continue to provide crisis services to stabilize patients who are experiencing a mental health emergency when they arrive at the hospital, and will provide psychiatric evaluations needed to transfer them to specialized facilities. The hospital will also continue to provide outpatient behavioral health services.
The shift “will better serve our emergency department patients both with and without behavioral health needs,” Jefferson Health said in a statement.
A spokesperson confirmed the change on Tuesday but declined to say when the hospital had transitioned the 23 behavioral health beds into an emergency department “surge unit” or whether any staff members were laid off.
Jefferson Health announced in October that it had laid off between 600 and 700 of its 65,000 employees. The system reported an operating loss of $104 million in the first quarter of fiscal 2026, which ended in September, driven largely by its struggling insurance business.
The spokesperson also declined to say whether the hospital had plans to reopen the psychiatric unit in the future, or whether the change was part of ongoing restructuring across the sprawling 32-hospital system. Jefferson leaders have said they plan to streamline services across the Jefferson network, which has grown significantly through acquisitions since 2015.
The hospital’s inpatient psychiatric unit treated 350 patients in 2024, according to the most recent data from the Pennsylvania Department of Health.
Patients experiencing severe mental and behavioral health emergencies often need to be admitted to a specialized psychiatric hospital. General hospitals like Abington are critical entry points, helping to stabilize these patients and providing psychiatric evaluations, said Carla Sofronski, executive director of the PA Harm Reduction Network, a nonprofit organization that advocates for people with mental and behavioral health needs.
Patients must be evaluated by a psychiatrist or psychologist before being transferred to a specialized facility.
Sofronski said she worries that being in the emergency department could become even more stressful and scary for patients in a mental health crisis if they do not have dedicated rooms to decompress.
“It’s a very busy emergency department — what does that experience look like for people who are suffering?” she said.
Last year, an Abington security guard was accused by the Pennsylvania Department of Health of using excessive force against a patient being treated in the hospital’s psychiatric unit. Video footage of the hallway encounter obtained by The Inquirer showed the guard bringing the patient — who was naked beneath a hospital-bed blanket wrapped around her body — to the floor after she ignored his orders to stop walking. Jefferson has said the guard followed protocol.
Jefferson declined to say where it planned to transfer patients.
Other options nearby for patients in need of these services include Holy Redeemer Hospital’s 24 inpatient psychiatric beds, according to health department data from 2024, the most recent year available.
Elsewhere in the Jefferson network, Jefferson Einstein Philadelphia has 37 inpatient psychiatric beds and the system’s flagship hospital has 16.
