Matthew Spindler came to UC San Francisco as a doctoral student because he wanted to be a scientist. His plan was to follow a standard academic track: research, publish, teach—and pray for tenure. But after a few classes run by the Entrepreneurship Center at UCSF, he has a new goal: launch a biotech startup with an app that will help diabetics track their health and make lifestyle choices.
That means someone else will have to teach college freshmen what to do with pipettes and how to perform titration. Spindler said it was more exciting to try and bring science out of the lab so that his work could actually be used somewhere by real human beings.
This focus on entrepreneurship and commercialization has become commonplace at American universities. Stanford, which spawned companies such as Google and Yahoo, has even been criticized as a startup incubator with a football team.
Listen to the story. Those are tech companies. But in the life sciences it’s no different. Schools are scrambling to help students turn their lab work into the next big thing commercially in biotech. While this emphasis on goal-oriented, product-driven research might resonate with investors, it grates on those who advocate for pure research and science for science’s sake.
One of those people is Peter Walter, whose cell biology lab is located on UCSF’s Mission Bay campus. His name appears on well over 100 publications. He has co-authored “Molecular Biology of the Cell,” a widely used textbook, has secured dozens of grants, and won the 2012 Paul Ehrlich and Ludwig Darmstaedter Prize for outstanding achievements in the field of cell biology. Pharmaceutical firms have used research from his lab to create products—but those are never his focus, he said.
“We’re starting from a basis of discovery,” he said. “I want to understand how cells work. I really love the process of figuring out how the cell is more than a bag of chemicals.” Walter characterizes his approach as “walking along the serendipitous path of discovery.”
That’s not exactly the elevator pitch that potential investors would want to hear. Stephanie Marrus, on the other hand, is all business. She directs the entrepreneurship center and plans to expand it with a grant from the National Science Foundation. “The goal,” she said, “is to make us the No. 1 entrepreneurship center for life sciences and health in the United States.”
She’ll have plenty of competition. MIT, Purdue and a host of other universities also have entrepreneurship centers. While places such as UC Irvine and Dartmouth offer joint business/medical degrees. UCSF does have one big advantage: location. The Mission Bay campus, just south of the San Francisco Giants’ ballpark, is surrounded by venture capitalists, biotech startups and big pharmaceutical companies.
Biotech analyst Scott Morrison is U.S. life sciences director at Ernst&Young. He said the only place that rivals the concentration of biotech players in the Bay Area is Boston, but that it can’t draw on the sheer wealth and long-standing startup culture of Silicon Valley.
A more “sober” industry
As a result of UCSF’s Entrepreneurship Center, students interact directly with industry members and venture capitalists. At the lecture I attended with Spindler, life sciences investor Corey Goodman had been brought in to talk about his business successes and failures.
He told the students that they’d have to be a lot more organized and business-minded than he was when he started out because the entrepreneurial landscape has changed so greatly.
The biotech industry has been through two booms and busts over the last decade and a half. Down years followed the bursting of the dot-com bubble in 2000 and then again after the financial crisis in 2007. Before each crash, investors had sunk millions into unproved, early-stage ideas; both times the losses were monumental.
Morrison, the Ernst&Young analyst, said the industry has since sobered up.
“The bar today for forming a new company is much higher than it has ever been before,” he said. Funding is doled out in smaller bundles tied to research milestones. And to have a chance at any initial investment, he said, startups need to have a commercial focus and a solid business plan from the very start. Only after they’ve thoroughly proved the viability of the science and the idea will an investor go all in.
University-business collaborations: The future of biotech?
Universities make perfect proving grounds for young companies. The science is cutting edge. The academic body can vet ideas. And with the abundance of students and postdocs available, an inexpensive skilled labor force exists. That’s why, Morrison said, companies are investing in schools more than ever.
UCSF has more than 15 research collaborations with Genentech and an $85 million partnership with Pfizer. At universities across the country, multiyear partnerships like these are replacing traditional one-time grants for individual labs and research projects. Morrison said this kind of deep, ongoing collaboration between academia and industry is the future of biotech.
Once students have created a business plan through UCSF’s Entrepreneurship Center, they can test out the science at the California Institute for Quantitative Biosciences, or QB3, a state-sponsored program that provides private incubator lab space for fledgling companies at UC Berkeley, UC Santa Cruz and UCSF. Douglas Crawford is the associate director of QB3. Escorting me into a lab, he said we’re going “from the university sort of public space to now private company space. Any cool wind you feel is the breath of capitalism blowing through the university.”
Biotech companies require much more infrastructure than those in the tech space. While some legendary tech giants have started in a trailer or private residence, you’re not going to get very far playing around with test tubes in your parents’ basement.
At QB3, UCSF spinoff companies are provided everything they need to get started: industrial refrigerators to store test samples, giant agitators to mix chemical compounds, certified lab space. Even more important, they have access to UCSF’s expensive equipment and skilled technicians. Just a few doors down from the incubator labs, there are half-million-dollar microscopes, a DNA sequencer and a 3D printer that can custom-make objects out of plastic.
The startups at QB3 are all trying to develop marketable products. One team is developing a tool for people to analyze the DNA of their own gut bacteria. Charles Noble, a former postdoc at UCSF, is working with his team on a high-tech drug delivery system. It uses nanoparticles to encapsulate drugs and direct them to certain parts of the body. He and his team hope all the connections at UCSF will help them find an industry partner and launch a final product. He says they just don’t have the resources to do all the clinical trials themselves.
UCSF: A long history with biotech
UCSF has always had an involved relationship with the biotech industry. The 10-year-old Mission Bay campus owes much of its rapid construction to a $200 million intellectual property lawsuit against Genentech. The company settled with UCSF in 1999 to resolve a dispute over Protropin, a drug to treat dwarfism that helped turned Genentech into a biotech giant. Money from the settlement led to the creation of Genentech Hall, the central building at Mission Bay. Since then, pharmaceutical companies such as Bayer, Celgene, and Fibrogen have set up offices in the neighborhood.
You can read the industry connections at UCSF as much in the bios of the administration as on the plaques on the buildings. The current chancellor, Susan Desmond-Hellmann, is the former president of product development at Genentech. (She’s also a board member at Facebook). Desmond-Hellmann has advocated for the push at UCSF toward commercialization and entrepreneurship.
This whole focus on product-driven research might resonate with investors but it’s a disturbing trend for Walter, the cell biologist. Walter said the greatest advancements in science have come from basic research. Breakthroughs such as penicillin and X-rays resulted largely from pure scientific discovery, not some postdoc trying to make a buck with a smart phone app.
“I think it would be very, very useful for a lot of emphasis to be put on on promoting basic discovery,” he said, “to make sure the postdocs remember why they got into this business in the first place.”
But for many new graduate students now, one of the reasons they are getting into the life science business is business.