QB3 Opens Life Sciences Incubator in San Francisco’s Dogpatch

10/30/13Follow @wroush

If you ever pass through San Francisco’s Dogpatch neighborhood, or if you attended the massive post-Burning Man “Decompression” street party a couple of weeks ago, you may have noticed the transformation underway in what used to be a sad old concrete building at 953 Indiana Street.

The property was once home to a medical device manufacturer, but has long been unoccupied. This summer, construction crews moved in, refitting the interior and cutting holes for big new windows, adding new landscaping and a coat of paint, and generally beautifying the property. (I’ve been watching: Xconomy’s San Francisco office is just two blocks away.) But all the activity remained a mystery to local residents until this week, when a new sign appeared above the building’s entrance: QB3@953.

No, it’s not a license plate number or a Twitter handle. It’s the name of a new public-private partnership offering lab space to early-stage life science startups. The new facility is privately financed, but is administered by QB3, also known as the California Institute for Quantitative Biosciences. And it’s opening for business today, with San Francisco Mayor Ed Lee and other luminaries expected to attend a kickoff ceremony at the facility this evening.

An initial cohort of 16 companies is already moving into the 24,000-square-foot building, with eight more to follow in November. There’s space for as many as 35 companies altogether; they get access to offices, conference rooms, lab benches, freezers, microscopes, and facilities for culturing cells, purifying DNA and proteins, and the like.

For a life sciences startup investigating a new drug or therapy, those are the basic necessities—the equivalent of a laptop and an Internet connection for a software entrepreneur.

“In the tech space, you could go to a coffee shop and start a company, but in the life sciences they can’t do that,” says Doug Crawford, associate director of QB3. “You can’t bring cell cultures and chemicals into a Starbucks. We offer companies the opportunity to gain access to very expensive, specialized resources in very small increments—as little as eight feet of lab bench space, or an hour of time on a confocal microscope.”

Set up in 2000 by then-Governor Gray Davis, QB3 has a mandate to help scientists in the University of California system get their innovations to market. It has facilities at three UC campuses in San Francisco, Santa Cruz, and Berkeley—hence the “3”—and those facilities include four small incubator spaces. Two are in Berkeley, one is located on the UCSF Mission Bay campus, and a fourth—the Mission Bay Innovation Center—is operated under the direction of biotech company FibroGen at 409 Illinois, an Alexandria Real Estate Equities-owned building just off the Mission Bay campus.

More than 75 companies, including names like Fluxion, Invitae, Moleculo, Sequenta, and Siluria Technologies, have gotten their starts in these QB3-affiliated spaces. But “none of them were sufficient for the demand,” Crawford says. “I’ve been getting one to four inquiries per week, and there is just no space left in San Francisco for life science startup companies. So we were motivated to go down this path by the unmet demand.”

Despite its proximity to the UCSF Mission Bay campus, QB3@953 is an independent partnership that includes QB3, San Mateo-based industrial real estate company Dewey Land, and private investors. “California is one of the few states in the country that does not provide money for things like incubators, so we had to figure out how we were going to do this without public funds,” Crawford says. “We went out and raised private capital, which allowed for the creation of the infrastructure. QB3 manages the space and receives some reward for that, but it’s a true public-private partnership.”

According to Crawford, one of the private investors in QB3@953 is Jack Wadsworth, formerly the head of Asia operations for Morgan Stanley. Also involved in the project is Janssen, the Belgium-based pharmaceutical subsidiary of Johnson & Johnson; it’s renting about a fifth of the space for use as a corporate incubator called Janssen Labs. That section of the building will hold up to 10 startups partnering with Janssen, and is an extension of an existing life sciences incubator in San Diego.

Unlike a classic startup accelerator, QB3@953 won’t make equity investments in startups as a condition of residence. But QB3 operates an $11 million seed-stage venture fund called Mission Bay Capital that can invest up to $200,000 in qualified startups, and Crawford says some of the startups at QB3@953 may end up being evaluated for investments.

“We remain convinced, from the track record of companies in the QB3 network, that a scientist with a credit card and a cool idea is all it takes to create a powerful company of value,” Crawford says. “That is a surprise to traditional investors—you would think that the great stuff would get identified by the traditional capital sources. But time and again, we see scientists building startups on a shoestring reaching out to traditional VCs and being turned away. Our goal is to help.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • Susan Eslick

    They did such an amazing job with the exterior of this building. I have lived in Dogpatch since 1995 and I’m thrilled with the design and the concept inside. Welcome to the neighborhood. Glad to have more innovation and creativity. That’s what this neighborhood is all about.