June 17, 2004

Bioscience Incubator to open Monday

By Kymberli W. Brady
Staff Writer

On Monday, the San Jose Bioscience Incubator and Innovation Center will open its doors to a new era in technology, making it the first of its kind on the West Coast and the fourth in a series of successful business incubators established by the City and the Redevelopment Agency over the past 10 years to provide supportive environments for start-up companies. The plan is to encourage growth and long-term prosperity in San Jose and the Silicon Valley.

To promote the project, Redevelopment Agency Director and New Almaden resident Ruani Weerakoon met with the Almaden Valley Community Association [AVCA] on Monday during its monthly meeting to discuss the outline and programming of the new incubator.

Having worked under three administrations, Weerakoon spoke of the one constant that has remained throughout her 15-year tenure—the vision for economic development. “It’s always been about job creation, keeping this economy vital, and making our residents prosperous in any way we can,” she said. “All of our efforts have been aligned towards that goal.”

Statistics dating back to the 1950s show a startling increase in the number of San Jose residents from 90,000 to 925,000, many who have been instrumental in turning an agricultural community into a city at the forefront of innovation. “We’ve gone through some tough times in the last few years and it’s been very painful,” she admitted. “The metro area has lost about 200,000 jobs since 2001, but it is in hard times that our vision comes through.”

When the dot-com began to implode two years ago, bioscience was but a buzzword, challenging Weerakoon to take the lead on an initiative that would create the opportunity for new industry to grow in San Jose—one that would provide residents with a better quality of life by generating jobs closer to home. In talking with companies in San Francisco, she discovered that many employees live in the South Bay and travel over an hour to work each day. “What that translates to as far as I’m concerned is a poor quality of life. We’re giving them opportunities here in San Jose to work 10 minutes away from home. I want parents to be able to go home to their families at dinnertime.”

Plans to expand five industrial areas began in the 1970s, with the zoning of large parcels of land in the General Plan for industrial use, including 4,600 acres in north San Jose, 2,300 acres in south San Jose, and smaller parcels in Olinder, the Monterey Corridor and the Julian-Stockton areas.

Over the past 25 years, the Redevelopment Agency has invested approximately $2.7 billion in San Jose, with $300 million allocated toward neighborhood revitalization, $700 million in affordable housing, $900 million in public facilities, and $600 million in downtown and industrial area infrastructure—all in an effort to entice companies to settle in those areas. “That’s what the Redevelopment Agency does,” Weerakoon explained. “We’re all part of a team that enables companies to come here and to grow here.”

Recent protests however, have raised concerns for the types of studies that will occur in the incubator, specifically genetically modified crops and animal testing. “I think the protests are mostly about genetically reengineering the way things are,” explained Weerakoon. “That’s not what this incubator is about. We are going to be promoting things to help people live better, longer lives. There’s nothing to be scared about here.”

“It would have been much more responsible from a press standpoint to take a look at the percentage of scientists doing frankenfood, animal testing and genetically modified things,” explained Stanford Bioengineering Research program officer Jonathan Sorger. “People always freak out about what they put in their mouths and what happens to animals, and those are valid fears. But most of the scientists are actually doing drug/device development.”

Weerakoon stressed that the incubator will carefully screen and have intimate knowledge of every company allowed in the facility, and will maintain a commitment toward strict regulations and permits for hazardous materials. “We’re talking to scientists who are working on nasal chemotherapy, genetic testing, arthritis drug development, drug discovery, and creating tools,” she asserted. “The theme has turned toward not only taking care of the 10 percent of the world that’s sick, but the 90 percent of the world that is well. We’re talking about preventative medicine now.”

Throughout San Jose, 54,000 businesses employ an estimated 355,000 workers—the majority which are small businesses with one to 100 employees. The return on a 10-year, $14 million investment, according to Weerakoon, has been enormous. Citing Agilent Software, which started with two men working in a 200-square-foot software incubator downtown, she explained how the company grew to 10,000 square feet in five years, before she moved the 420-employee company last September to an 82,000-square-foot facility in Edenvale. “We’ve known for a long time that we have to support small business because the Ciscos and the Adobes and the Agilents don’t happen overnight,” she said. “These people started in kitchens and garages—university professors getting together to develop ideas and move them forward.”

With the recent convergence of companies like Agilent and IBM to include live science departments, Weerakoon introduced an initiative to build the $6 million incubator, which was approved by the City Council in 2002. “It was not hard to convince them that this was the right thing to do,” she said. “We realize that it is important to have the ability to sort, analyze, retrieve, and store data—to work with engineering counterparts to put the science and data all together. Our hope is to target and capture that convergence market—the bioinfomatics, biochips, bioengineering, medical devices, and nanotechnology—and make that happen in San Jose.”

The new incubator is the result of a nine-year lease agreement with Mission West properties for a two-story building on Optical Court. The San Jose University Foundation will operate the incubator, and Bay Area GAIN (global access innovation network) will run the day-to-day operations. Located in the Edenvale Technology Park, near many bedroom communities, and easily accessible via a reverse commute from the West Valley and East Bay, the 36,500-square-foot building will feature shared state-of-the-art laboratory facilities that will serve up to 20 bioscience and biotechnology start-up companies during the coming year, and includes 14 wet labs, seven dry labs, 13 offices, three tissue culture facilities, four conference rooms, a library, and a kitchen, along with a reception area and storage on the first floor.

Rental for wet lab space will cost $5 a square foot, while dry lab and office space will run $2 a square foot—much less, according to Weerakoon, when it comes to the larger size commitments required by other facilities. “There aren’t 300-square-foot spaces available elsewhere,” she explained. “Here, you pay only for the square footage you are renting, and you get full service—those incredible people who run that incubator. It’s not about the space, but the value.”

According to Sorger, the cost is reasonable, citing an average of $8 a square foot for dry lab space and $10 for wet lab space in the incubators near the NIH in the Maryland/Washington, D.C. area. “That’s pretty cheap, when you put in into perspective,” he said.

“The greatest advantage that an incubator gives to small start-up companies is not so much the space that we have built for them,” explained Weerakoon. “But the people who run it on a daily basis—specialists in bioscience and live sciences, with connections to the venture capital community, academic institutions, and the rest of the world. That way, scientists, who have no time to write a business plan or prepare a presentation, can concentrate on the science. There’s a synergy that goes with being in an incubator.”

The objective is for start-up companies to go from dry lab use during the product research stage to wet lab use for product development. As the companies expand from 300- to 900-square-feet and then outgrow the incubator within the three-year window, they will “graduate” and hopefully relocate in Edenvale or San Jose. The goal is to have 45 companies graduate out of the incubator in five years, resulting in 3,000 to 4,000 permanent jobs and twice that amount in indirect jobs, including legal, financial and others.

“I personally believe with all I’ve read that bioscience is next wave. Having worked at Apple, Adobe, Sun, and GE, I’ve seen the terrible pain and suffering the last couple of years,” stated Joseph Sorger, president of Jewish Family Service of Silicon Valley. “This is a wonderful thing.”

In reading extensively about bioscience, AVCA Vice President Lee Dimmitt sees the incubator as a positive step toward improving the quality of life. “I’m convinced that if you live long enough, you’re going to live a lot longer,” he said.

“San Jose is giving these scientists an opportunity to work in an environment that will foster faster development of their process and allow our residents to have employment opportunities here,” concluded Weerakoon. “When San Jose sees and opportunity, we go for it.”

The Bioscience Incubator is located at 5941 Optical Court, off Piercy Road in the Edenvale Industrial Park.