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COASTS ARE CALLING AS BIOTECH STARTUPS SCRAMBLE FOR WET
- Rachel Melcer
- St. Louis Post-Dispatch (MO)
- October 28, 2002
- Section: BUSINESS PLUS
- Edition: FIVE STAR LIFT
- Page 8
This area's available wet labs can't keep up with the demand
as more new biotech companies leave incubators and set up as
Biotech and life sciences entrepreneurs say that unless
St. Louis quickly increases its stock of wet labs, they may
have to pack up their genetic code maps and engineered
seedlings and head for the coasts.
They are being lured by the rush of running water, the hum
of overhead hoods, purified air and a wilderness of
workbenches with room for experiments galore.
Such spots are scarce in the St. Louis area.
Competition is fierce for what exists, and developers are slow
to build more.
Couple the need for facilities with the draw of
late-stage venture-capital investors, most of whom are based
in the East or West, and the siren song becomes stronger, said
several entrepreneurs and those who would develop St. Louis
into the BioBelt, a hub for biotech and life sciences.
Plenty of people are working on the problem.
The Coalition for Plant and Life Sciences, a group of
business, civic and academic biotech boosters, is seeking
public and private funds. And developers and designers
anticipate a wet-lab building boom. Various cities and St.
Louis County are mapping out areas where tax-rich research
parks might go.
So far, though, little is happening. And young
companies say that if they should get their big break, they
won't be able to wait for a buildout or new construction here.
"It's a common question that (startups) have, whether
they'll stay in St. Louis, because there isn't a business
center or a biotech area," said Jack Erion, co-founder and
chief executive of BioSynthema Inc. "Whether we would stay in
St. Louis is something that's already being discussed."
His company is developing cancer tests and treatments
in a couple of labs it is beginning to outgrow at the Center
for Emerging Technologies, a St. Louis incubator.
Marcia Mellitz, president of the center, said she sees
a wet-lab bottleneck ahead, for companies that graduate out of
the incubator and for startups seeking room at her full inn.
"You try to anticipate and not wait until you're
desperate, but here we are," she said. "At some point, we have
to say, 'Are we serious about being in this game or not?' "
Most tenants of the center, such as BioSynthema, work
with scientists at nearby universities and medical schools.
The region's other biotech and life sciences incubator, the
Nidus Center for Scientific Enterprise in Creve Coeur, has a
similar geographic appeal -- it is on the campus of
agrosciences giant Monsanto Co., across the street from
researchers at the Donald Danforth Plant Science Center. But
Nidus, too, is full.
And while St. Louis has a lot of biotech strengths --
strong companies, universities, a premier genome research
center and world-class botanical garden among them -- the need
for basic infrastructure could outweigh them all.
"The problem you've got in St. Louis is that although
people are saying they want to do all this life sciences
stuff, (startups) are really constrained," said Terry Kungel,
chief executive of DzGenes LLC, which occupied an outdated wet
lab in the basement of St. Mary's Health Center.
Wayne Barnes, president of DNA Polymerase
Technology Inc., bought an old warehouse at 1508 South Grand
Boulevard that had been converted into office space and turned
half of it into a wet lab. He patched together benches and
bought used autoclaves to fit his budget.
"We don't have anything fancy, but we have what we
need. And I've told my people that if they need more space,
they have to build it," he said. "We had to do this because it
really was hard to find anything."
Projects could blossom
The problem isn't a lack of ideas. Plans abound for
wet-lab and research-park developments, with three garnering
the most buzz:
* Technopolis, a redevelopment district east of Forest
Park that touches the Center for Emerging Technology, St.
Louis University, Washington University Medical Center and the
Missouri Botanical Garden.
* A mid-St. Louis County area bounded by Gateway
Boulevard, Warson Road, Olive Boulevard and Lindbergh
Boulevard. It touches Monsanto headquarters, Nidus and the
* Chouteau Lake & Greenway, a massive, multipurpose
redevelopment plan that would connect the Gateway Arch and St.
Louis riverfront with Forest Park in a corridor running along
Chouteau Avenue; it would include a still- undefined
And the need for such projects is clear.
If the St. Louis region increases its share of the
national biotech market to 1.25 percent in 2006 from the 1.2
percent it captured in 2001, it will need 2 million more
square feet of lab facilities, according to a new study
commissioned by the St. Louis County Economic Council; the
cities of Maryland Heights, Olivette and Creve Coeur; the
Danforth and Nidus centers; McEagle Development Corp.; and the
Desco Group Inc.
The mid-St. Louis County area could capture up to 40
percent of that demand, or 800,000 square-feet of lab space,
over the next five years, the study said.
"We think this is a node that could really blossom,"
said Denny Coleman, president and chief executive of the St.
Louis County Economic Council. "Certainly, you never put your
eggs all in one basket, but when you have a niche like this
that has been handed to you by the private sector and
institutions (such as the Danforth Foundation), you'd be
foolish not to try to expand it."
Bob Calcaterra, president of Nidus Center, said its
tenant companies were eager to grow and graduate, but they
also want to remain in a collegial environment.
"They want to be part of the cluster because they see
it as exciting," h e said. "And they've found they can
interact with each other here, so they want to be able to
interact somewhere else, too."
Urban research district
Developers and designers, too, are eagerly awaiting the
new market. But, so far, none is willing to risk large-scale
investment on entrepreneurs with vague credit and
Unlike their counterparts in long-standing research
hubs, such as San Francisco and Boston, local builders are new
to the scientific startup market -- and that's part of the
problem, said Bill Odell, design principal at Hellmuth, Obata
& Kassabaum Inc., which has worked on wet labs and
high-tech buildings nationwide.
"Not only do (St. Louis developers) not know a lot
about labs, but they look at XYZ Genomics Co. that is 1 or 2
years old and doesn't have any credit rating, and they don't
understand the science," Odell said. "So it looks real
high-risk to them and, in some ways, it is."
Building wet-lab space costs about $300 a square foot,
nearly three times as much as Class A office space, according
to local developers. The cost per square foot to convert
offices or warehouses into wet labs ranges from $175 to $225,
depending on the complexity of the project.
"And, at least in our community, you don't do
speculative buildings at that cost," said Paul McKee,
co-chairman of Paric Corp., which built the Nidus Center and
Center for Emerging Technology. McEagle Development is a
In the down economy, virtually no one is breaking
ground on any sort of project without secure anchor tenants
and iron-clad financing. Projects that were in the works have
stuttered or stopped.
Desco Group had optioned a 240,000-square-foot building
at 4100 Forest Park Avenue with the intent of converting it
into wet-lab space for graduate companies from the Center for
Emerging Technology next door.
Despite the availability of city tax incentives, Desco
hasn't yet been able to find an anchor tenant secure enough to
make the project work, Chief Executive Mark Schnuck said.
So Desco is "looking at other opportunities that would
allow us to get into smaller facilities . . . in a number of
areas," he said.
Schnuck declined to comment on whether his company is
among developers pursuing a proposed wet-lab building near the
Danforth Plant Science Center.
Still, Schnuck said he is convinced the Technopolis
district around the Center for Emerging Technology will work.
Interest is high among researchers, entrepreneurs and the
Donn Rubin, executive director of the Coalition for
Plant and Life Sciences, said he is meeting with stakeholders
in that area to rejuvenate the Technopolis project that was
proposed more than two years ago. They are planning from
scratch for an "urban research district" in the same
geographic area but working to get away from the Technopolis
tag, which is connected with a project that hasn't been able
to get off the ground.
Perched and ready
The need for wet labs is not new, but the impetus to
build them is lacking, Rubin said. What's needed is public and
private sponsorship to take the onus off profit-driven
developers -- at least until the local biotech industry
matures enough to guarantee a steady stream of paying tenants.
"It's a chicken-and-egg challenge," he said. "Once the
demand and the level of supportable rents are demonstrated,
then one should expect few if any additional subsidies. But at
this stage, some public sponsorship is needed to get it off
The fear is that if wet-lab construction doesn't get
started soon, growing companies will leave, and the biotech
market won't materialize.
"If St. Louis gets its act together, this is by far the
biggest opportunity for growth in the region, no comparison,"
HOK's Odell said. "If we don't, we will miss the boat."
Dr. Paul Olivo, president and chief scientific officer
of pharmaceutical development startup Apath LLC, is concerned
about the local options for his company once it graduates from
If Apath succeeds in attracting venture-capital
investors, "they would be a little concerned about putting
money into mortar instead of experiments. So there would be
pressure to go to a place where there is existing lab space,
say, San Diego," he said.
"And time is money. The motivation to invest is because
you think a company is perched and ready to do great things,
and you want them to do those things as soon as possible."
(1) Color Photo by ANDREW CUTRARO / POST-DISPATCH - Jack
Erion (left), president of BioSynthema, works in his lab
alongside Dan Burleigh, a research scientist, last week at the
Center for Emerging Technologies.
(2) Color Photo by ROBERT
COHEN / POST-DISPATCH - Chief scientist Milko Kermekchiev of
DNA Polymerase Technology works in the wet lab at the
company's offices last week.
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