Shapiro Administration Pushes $100 Million Innovate in PA 2.0 Fund to Accelerate Life Sciences and Healthcare Innovation
Key Insights
Governor Josh Shapiro's 2026-27 proposed budget includes the Innovate in PA 2.0 program to deploy nearly $100 million into the state's innovation economy, including funding clinical trials for life sciences.
AlphaLab Health (search), a collaboration between Allegheny Health Network (search) and Innovation Works (search), has supported 35 companies that raised over $65 million in follow-on funding and created 114 direct jobs.
The accelerator program based at AHN Suburban in Bellevue addresses real-world healthcare challenges by connecting entrepreneurs with clinicians, domain experts, and capital.
Pennsylvania is positioning itself to become a national powerhouse in life sciences innovation as Governor Josh Shapiro calls for nearly $100 million in new funding through his proposed 2026-27 state budget. The centerpiece of this effort, the Innovate in PA 2.0 program, would provide capital for promising startups, fund clinical trials for the life sciences, and develop a workforce and education pipeline to help emerging companies succeed.
Department of Community and Economic Development (DCED) Secretary Rick Siger highlighted the importance of this reinvestment during a recent tour of AlphaLab Health (search), a healthcare-focused business incubator based at Allegheny Health Network (search)'s (AHN) Suburban campus in Bellevue, Allegheny County.
"AlphaLab Health (search) is a state-of-the-art facility designed to support entrepreneurs, accelerate product development, and advance solutions to complex challenges in the healthcare industry," said Secretary Siger. "The impact of their work will be felt through job creation, improvement of patient care, and enhanced innovation in the healthcare system."
A Unique Model for Life Sciences Innovation
AlphaLab Health (search) represents a distinctive collaboration between Allegheny Health Network (search) and Innovation Works (search) (IW), combining clinical expertise with the resources of one of the nation's most active venture development organizations. The accelerator is housed at AHN Suburban, a former acute care hospital that has been reimagined over the last six years as a life sciences and community innovation hub.
"At AHN, we recognize that health care delivery and economic vitality are closely connected, particularly in underserved communities where hospitals too often struggle to survive," said Jeffrey Cohen, MD, Allegheny Health Network (search)'s Chief Physician Executive, Community Health and Innovation. "Through AlphaLab Health (search), we are advancing a unique collaboration among government partners, entrepreneurs, clinicians, and industry leaders to solve everyday health care challenges and ensure that innovation translates into meaningful benefits for the patients and communities we serve."
Ven Raju, President and CEO of Innovation Works (search), emphasized the program's comprehensive support structure. "Together, we help founders commercialize breakthrough technologies through access to domain experts, clinicians, capital, and mentorship," Raju said. "We also expanded that commitment through the launch of a follow-on fund to help our most promising life sciences companies continue to grow and scale here in Pennsylvania."
Measurable Economic and Clinical Impact
As of the end of 2025, the AlphaLab Health (search) program has demonstrated tangible results. Thirty-five companies have completed the program, receiving initial investments of approximately $3 million. These companies have gone on to raise more than $65 million in follow-on funding, creating 114 direct jobs and 342 indirect jobs in the region.
The economic ripple effects extend beyond job creation. The initiative has contributed to increased tax revenue and improved trust between residents and the institutions that serve them, according to program leaders.
Innovate in PA 2.0: Building on a Legacy
The proposed Innovate in PA 2.0 program builds on Pennsylvania's original Innovation fund, launched in 2013. The new initiative would deploy nearly $100 million into the state's innovation economy across key sectors identified in the Commonwealth's 10-year Economic Development Strategy, including life sciences, robotics and technology, energy, manufacturing, and agriculture.
The Shapiro Administration has pointed to Pennsylvania's long history of discovery and innovation — from Ben Franklin's lightning rod to the polio vaccine — as a foundation for continued investment. The Commonwealth was also responsible for the nation's first public-private technology partnerships in 1983 and the first Agricultural Innovation Grant Program under Governor Shapiro in 2023.
The 2026-27 budget proposal also includes a $9 million increase for the Agricultural Innovation program, bringing total funding to $19 million, reflecting the administration's broader commitment to innovation across multiple sectors of Pennsylvania's economy.