Mass Innovation Labs in Kendall Square makes 124,000 square feet of first-class chemistry and biological laboratory space available to growing biopharma companies.
The Greater Boston area, in particular Cambridge and surrounding communities, is the hottest of hotbeds for early-stage biopharma companies. Ample private and corporate venture capital, NIH and state-sponsored funding fuels the fire and a plethora of world-class schools, hospitals and research institutions feed the flames.
The red-hot commercial real estate market in these areas can, however, be very challenging to navigate for any early-stage company trying to get established and thrive. This is especially true where the company requires specialized biological and pharmaceutical-grade laboratory space in which to conduct research and development. The cost for acquiring or building out new wet lab space in these hot markets is usually prohibitive for these early-stage companies, which typically need to preserve cash by any and all means possible.
Unlike general office space which is relatively inexpensive, more widely available and easy to reconfigure, wet lab space is just the opposite in almost all respects. Scarcity of wet lab space in Cambridge is indicative of the problem, with 96 percent of its 10.24 million square feet of laboratory space occupied. Additionally, the cost to build out new laboratory space can run upwards of 10 times the cost to build out the same square footage of office space, especially if the company requires the use of capital-intensive equipment or specialized facilities.
Furthermore, given the risks and uncertainties associated with early-stage biopharma companies, it can be difficult for them to predict their wet lab requirements beyond a very short time horizon. A company can quickly outgrow its wet lab space as the result of a strategic transaction with a large pharmaceutical company, or quickly find itself with expensive surplus wet lab space due to the unexpected termination of a research program. Flexibility and low cost are paramount.
Even in this high cost commercial environment, the availability of suitable and affordable wet lab space for early-stage companies is critical for nurturing and growing a successful biopharma cluster. It is interesting to note that the top finding in the April 2016 report by the Partnership Fund for New York City titled “New York’s Next Big Industry: Commercial Life Sciences” states, “The lack of appropriate, affordable wet lab space remains the key barrier to life sciences development.”
Richard B. Smith
Sharing Solves Space Crunch
This issue has been successfully addressed in the Boston area by shared biopharma wet lab facilities where multiple early-stage companies share wet lab space. Each company typically occupies a private wet lab suite and also has access to use shared equipment and specialized facilities (e.g., cleanroom, cell culture, biohazard and animal facilities), as well as access to technical and administrative resources.
Mass Innovation Labs LLC in Kendall Square is a good example of such a wet lab space facility. Mass Innovation Labs makes 124,000 square feet of first-class chemistry and biological laboratory space, originally occupied by Vertex Pharmaceuticals, available to growing biopharma companies. Resident companies have access to co-located animal facilities, cell culture facilities, CRO services and operational support.
LabCentral, a unique nonprofit wet lab space provider, operates a 28,000-square-foot wet lab facility in Kendall Square. LabCentral is dedicated to helping the most promising biopharma startup companies get established and graduate to larger operations (hopefully in Massachusetts) outside the facility. LabCentral currently houses 29 biopharma start-up companies, and in its three years of operation has seen 21 companies already graduate. LabCentral counts among its sponsors a good number of major biopharma companies, and also hosts JLABS@LabCentral in collaboration with J&J Innovations LLC, a Johnson & Johnson company focused on accelerating early-stage innovation. Space in LabCentral is awarded through a competitive application process, or through sponsor nominations.
Lab space associated with academic institutions is also available in the Boston area. The newly opened Pagliuca Harvard Life Science Lab in Allston offers shared wet lab space for promising biopharma startups that are founded by Harvard faculty, alumni, students and postdoctoral scholars. The laboratory already had 17 resident companies upon opening its doors. BU’s BioSquare Discovery and Innovation Center in Boston is another great source of wet lab space catering to early-stage biopharma companies.
Commercial real estate developers have also embraced the need for wet lab space, including Cummings Properties which has developed affordable wet lab facilities suitable for early-stage companies in Woburn and Medford. It should be noted that Alexandria Real Estate Equities, a major developer of lab space, just paid $725 million to acquire One Kendall Square for further development.
While the Boston area may be ahead of other biopharma clusters in providing wet lab needed for nurturing the organic growth of early-stage biopharma companies, the demand for appropriate wet lab resources continues to grow. To remain competitive, we must not let demand outpace supply of this critical resource.
Richard B. Smith, a partner at the law firm McDermott Will & Emery, focuses his practice on representation of life sciences companies and related transactions.
