Amgen’s large-scale restructuring in California last year cost hundreds of drug researchers their jobs, and now a pair of industry veterans wants to ensure that the laid-off talent stays in Southern California’s “Highway 101” biotech corridor.
Brent Reinke, a lawyer who works with biotech startups, and Realty Bancorp Equities, a regional commercial real-estate developer, are planning to build a new life-sciences incubator in lab-space-poor Agoura Hills.
Their aim is to convert a vacant industrial building owned by RBE into the Gold Coast Bio Center. The incubator, located nine miles southeast of Amgen’s headquarters in Thousand Oaks, would welcome its first tenants next year.
Thousand Oaks and Agoura Hills are northern Los Angeles suburbs located within the “101 Corridor,” named for the US freeway that links Ventura, Santa Barbara, and Los Angeles counties and links the state’s two life-sci mega-clusters: the San Francisco Bay Area and San Diego region.
Both regions have benefited to a degree from the stream of former Amgen executives who have launched their own bio businesses, but the area in and around Thousand Oaks has very little available space for additional life-sciences startups. The incubator is designed to help address that need, as well as boost the 101 Corridor’s life-sci region, Reinke told BioRegion News last week.
“We have progressed a lot on the effort to where we are basically trying to ascertain whether or not there’s a sufficient pool of qualified companies that would have an interest in potentially being tenants in this building,” Reinke said in an interview last week.
A consortium of four startups led by current and former Amgen staffers is among those that have expressed interest in the Gold Coast Bio Center, he added.
Douglas Jacobsen, a partner in Woodland Hills-based RBE, told BRN last week his firm wants to complete leases with several tenants before proceeding with construction.
“We’re just looking for enough of a commitment that we can feel like it’s not one of those projects where we have to build it before they will come, but a project that is committed to by a handful of people who we can then just follow up with,” Jacobsen said. “All we’re looking for is enough buy-in so that we know we can have a critical mass, maybe the equivalent of 15,000 to 20,000 square feet of tenants, something like that.”
Jacobsen said RBE and Reinke “are looking to have it completed in the first half of next year, so we’re really all moving very quickly. It’s a very exciting project. Somebody needed to step up and do something like this, and we’re the guys.”
Jacobsen said RBE became interested in the project in part because his partner in the firm, Norman Kravetz, has an interest in life-sci projects, both as an angel investor in several technology startups and as a developer of several lab/ R&D projects. For instance, Kravetz acquired and restored the former Baxter Pharmaseal headquarters in Valencia, Calif., in 1996, two years after the building was damaged in the Northridge earthquake, and four years after Baxter shut down the facility and moved its operations to Chicago.
“From [Kravetz’s] perspective, I knew this would be appealing,” Jacobsen said. “From my perspective, the opportunity to turn generic office space into something unique gives me an asset that has a different kind of long-term value and appeal.
“We’re trying to give them a reason to stay here. Beyond that, I think there are … probably still quite a few people that are still at Amgen who would look for an opportunity to do something else.”
“I don’t want to have just another cookie-cutter office building, where nothing is different about the campus we own versus somebody down the street,” he added. “I’d rather have something that’s different, unique, and that takes advantage of something unique in the region. And unique in our region is Amgen. Amgen is a spectacular resource we can build on and work with.”
In addition, RBE is constructing a new 80,000-square-foot R&D building on land in front of the site planned for the Gold Coast Bio Center. Next door, BRE owns a 100,000-square-foot building entirely leased to video game developer THQ.
Jacobsen said his company is “already in discussion with a number of “prospective incubator tenants interested in the Gold Coast Bio Center, and with several area universities, which he declined to name.
Reinke and an advisory partner in the incubator project, former Amgen manager Wayne Davies, presented their plans to a group of prospective tenants earlier this month.
To identify top tenant prospects, Reinke said, the incubator has begun putting together both business and medical-technical advisory boards. “We’re going to work through and screen the companies and try to pick the ones we think have the best management and intellectual property, that have the best chance of succeeding, and try to be somewhat selective about who goes in.”
In addition to Amgen executives, tenant companies are expected to be launched and run by faculty from the area’s largest universities. While the planned incubator has no tie to any particular university, prospects inlcude the California Institute of Technology, California State University-Channel Islands, the University of California Los Angeles, and UC-Santa Barbara. Reinke said it would reach out to the schools, most of which are 30 to 40 miles away.
Reinke became familiar with the startups launched by Amgen executives and other entrepreneurs as a partner in the Westlake Village, Calif., office of the law firm Musick Peeler & Garrett. Reinke and John Dilts, the founder of the angel investor network Maverick Angels, are co-founders of The BioTech Forum, formed last year to grow life sciences and healthcare businesses, and form a support network for those companies, along the 101 corridor.
Two weeks after the Forum’s first meeting, Amgen announced convulsive company-wide layoffs and buyouts that eliminated a total 2,200 jobs — including 675 at the biotech giant’s Thousand Oaks HQ.
“We’re looking at taking a negative and turning it into a positive. We do think there’s a unique opportunity to hopefully have these people start companies in the region, and develop the cluster that really hasn’t developed until now,” said Reinke, who also founded the Gold Coast Business Forum, a business networking and education group. “We’re trying to give them a reason to stay here. Beyond that, I think there are frankly, probably, still quite a few people that are still at Amgen who would look for an opportunity to do something else.”
While many Amgen executives were considering launching their own companies before the job cuts, they were reluctant to give up the security of a steady job and paycheck, Reinke said. “Through either people taking packages or being forced out, people are now out,” he said. “And I think because of that, it really has accelerated the process and the interest level of people to do something.”
Amgen and its biotech focus are more the exception than the rule in the 101 Corridor, which stretches north from Los Angeles County to Ventura and Santa Barbara counties. Most of the region’s life-sci employers are medical device makers, not biopharma companies – a key reason behind the region’s dearth of lab space, said Ahmed Enany, president and CEO of the Southern California Biomedical Council.
“If they do [a new incubator] in Agoura Hills, it fills a niche in that part of town,” said Enany, whose council serves Orange, Riverside, San Bernardino, Santa Barbara, and Ventura counties, and greater Los Angeles. “There isn’t place in that area that is suitable for wet lab work. Having such an incubation space would provide a temporary solution for some of these startups.”
But tenants that outgrow the Gold Coast Bio Center will find few places they can move into within the 101 corridor, he added.
“It’s a problem we are having in the LA area in terms of availability for space that is suitable for wet lab work,” Enany told BRN last week. “Oftentimes, companies get into a generic building and they have to do the tenant improvement themselves if they can.
“We don’t have, for example, the equivalent of the business parks in the San Diego Golden Triangle, and the options that companies may find in such business parks, where space is already equipped that would enable tenants to do wet lab work,” he added.
The LA region has two incubators, neither in or near Agoura Hills:
- Pasadena Bioscience Collaborative, a public-private nonprofit group that operates in its namesake city a 3,000-square-foot facility that houses five startups. The collaborative’s 12 partners include CalTech, CalState, Pasadena City College, Convergent Ventures, Entretech, and the city of Pasadena.
- Momentum Biosciences, a private biotechnology, medical device and nanotechnology commercialization venture of UCLA and CalTech. Momentum houses three companies within a 10,000-square-foot wet lab-equipped space it opened in 2006 in Culver City, Calif.
While SoCalBio’s web site map shows 89 life sciences companies based in the 101 corridor’s suburban counties of Ventura and Santa Barbara – including Amgen and five other businesses in Thousand Oaks, the map shows not a single life-sci company based in Agoura Hills. Reinke and RBE hope to change that by transforming the vacant 29901 Agoura Road into a life-sci incubator.
The 38,000-square-foot R&D building has been vacant for about a year, since Line 6, a maker of digital musical instruments, moved out and relocated five miles east, to Calabasas. RBE would renovate the building to accommodate wet labs, both common labs and several separate individual labs with adjoining offices.
“It looks like right now we will probably have access to wet lab space for about 12 to 13 companies. Then we’ll have about six or seven companies that would essentially just be office space. All would have the services of the incubator available to them,” Reinke said.
Reinke said roughly one-third of the space would be labs, another third would be office space, and the rest common space. The incubator would be run by an executive director assisted by a facility person and an administrator. Accounting and other back-office functions will be outsourced.
Jacobsen and Reinke said the incubator will be privately funded. The RBE partner is in talks with Bank of America to fund most of the development costs, which he said are expected to run between $130 per square foot and $150 per square foot, or between $4.9 million and $5.7 million.
Reinke is working to raise additional up-front equipment and tenant space “fit-out” funding, which he projected would be “under $1 million.” To secure that money, he said, “we’ll probably approach either VCs or strategic [investors], or maybe just individuals in that region that want to be a part of this and support the effort.”
Jacobsen said the development costs and fit-out costs are in addition to the $11 million his firm has already spent on a series of repairs to the 1980s-era building. “We’ve torn out the entire parking lot, all the landscaping – we’ve torn out everything and rebuilt all of the infrastructure.”
Because the building is already zoned for R&D use, developers of the Gold Coast Bio Center would need simply to obtain building permits from the city of Agoura Hills.
The incubator has applied for construction permits, but no permits to build out any tenant space, Nathan Hamburger, an assistant city manager for Agoura Hills, told BRN last week.
“We were looking for something along that line rather than a typical office. This is something that we were hoping would occur, and that we were working toward, but we didn’t bring this project here. This occurred on its own. You might say we lucked out,” Hamburger said.
Hamburger said the city supports the incubator effort, which Reinke said would be an important next step if the 101 Corridor is to evolve into a true biocluster.
“It’s one thing to hold events for the Biotech Forum, which have been well received and are extremely important. But at some point, the talk has to turn into action. I’ve always believed that this bio center, if we can build it — and it’s looking better and better that we will — can show a tangible step that is being taken to let people know in the area that we’re not just talking about this effort to build a life science cluster, [but] we’re doing something about it,” Reinke said.