Incubator Grads Find Lab Space Costly

From the Frederick News...

Incubator graduates find lab space costly
Originally published January 31, 2008


By Jon Stewart

Biotech companies that leave the cozy confines of a technology incubator find a costly path in securing new lab space.

A study by the Maryland Technology Development Corp., or TEDCO, released Monday finds that many incubator graduates, particularly biotechnology companies, cannot afford the costs when they leave, said Michael Dailey, executive director of the Frederick Innovative Technology Center in Frederick.

FITCI has two campuses, one at Hood College and one on Metropolitan Court that help new and emerging technology companies rent affordable space, including labs; the incubator also offers administrative help, business consulting and access to funding.

From April to September a TEDCO-funded study investigated the economic impact of Maryland's 18 technology incubators.

The study was conducted by RTI International, of North Carolina. RTI surveyed 359 incubator clients and graduates; 45 percent responded.

The difficulties incubator graduates face after graduation was included in the questionnaire.

"The study confirms what we already suspected," said RenŽe Winsky, TEDCO's president and executive director. "Graduates, particularly biotechnology firms, often cannot afford their own office and wet lab spaces."

From infancy to adulthood

A biotechnology company often gets started in an incubator, develops a product with some success, and lands some service or product revenue, Dailey said.

"Once the companies meet the requirements to graduate, they have to find an outside location, and lab space is very costly for a small biotechnology company."

Dailey said that one FITCI graduate needed 10,000 square feet of lab space. "The cost after renovation would have been $150 a square foot, that's $1.5 million," Dailey said.

These small companies need a TEDCO buffering program to help them, Dailey said.

Working on solution

The Maryland Life Sciences Advisory Board has several groups working on this problem, Winsky said.

The advisory board was created during the 2007 Maryland General Assembly session to develop a strategic plan for biotechnology in Maryland. The 15 members represent federal agencies, biotechnology businesses, and universities, and one member comes from the general public.

Winsky serves on the board.

The board is evaluating whether money should be set aside strictly for post incubator firms so they can afford to stay one to two years in a business accelerator before they are ready for commercial space, Winsky said.

Business accelerators house technology firms for the short term, although the time varies, she said.

Information technology companies might become self-sufficient quickly, Winsky said, while biotechnology companies might stay five years in an incubator and five more in an accelerator because of the costs to bring a product or service to market.

Some help

One business accelerator is opening in March -- the biotechnology innovation center at the University of Maryland Baltimore.

The 8,000-square-foot center contains mostly labs and some offices. Some businesses have already signed up, Winsky said.

The center is geared to life science companies that need lab space for a short term, say six months, to get their products to the next step in development, Winsky said.