An article in the Wall Street Journal says that high rents are the problem:

It also underscores a wider problem for the city as it tries to attract biotech away from thriving centers like San Francisco and Boston—an inability to build affordable lab space near large academic medical institutions on the Upper East Side. BioBAT was supposed to be the answer, but its Sunset Park location, far from the center of activity, has made it a tough sell, according to industry experts and brokers.

I’ve heard the NYC area is doing especially well in genomics and human genetics, areas in which big hospitals and big, diverse patient populations are an advantage — but where large amounts of lab space aren’t needed.  It’s easier to be competitive in a high rent area, if you don’t need a lot of space.

Besides the expense, I think NYC and the NY/NJ region also suffers because it is so big and sprawling.  High density with short travel times are a real advantage for collaborations, or VC and licensing visits.  In Cambridge/Boston, for example, a pretty surprising amount of biomedical research is done within a 20 min walk of Kendall Square. An amazing amount is happening within a three mile radius.