“Two reasons,” says Anthony Johnson, founder and CEO of the biotech start-up Kodikaz Therapeutic Solutions about the decision to launch his company at an incubator in Lower Manhattan. “We knew we wanted to set up in New York City because of the burgeoning biotech scene and all of the infrastructure in place for biotech to be a success,” he says. “Also, we were the inaugural Golden Ticket winner.”
Number of buildings
Total square footage of laboratory space
Square feet of space planned
Average asking rent per square foot
Note: Figures represent space built exclusively for laboratory use. Source: CBRE Research, 2021.
That Golden Ticket was issued in 2020 by BioLabs at NYU Langone, the incubator offering Kodikaz free rent for a year. The award was sponsored by the big drug firm Boehringer Ingelheim.
With technology from Emory University, Kodikaz is working on a system for delivering cell and gene therapy with DNA fragments. Called Zip-Code, the platform enables targeted delivery of a wider variety of payloads than can be achieved using viruses and other standard delivery methods, the firm says.
Kodikaz—the name derives from the Greek word kodikas, meaning “code”—is part of a new wave of start-ups in New York City, where the vision of establishing a Cambridge, Massachusetts–like biotech center with technology from local research institutions mobilized development efforts a dozen years ago.
Now, with an expanding landscape of laboratory space, the Big Apple is beginning to attract entrepreneurs from elsewhere. Some start-ups are choosing the city over the well-established hubs of Cambridge, San Francisco, and San Diego.
“It’s come a long way,” Johnson says, expressing enthusiasm for recruitment prospects in the city as Kodikaz moves forward. “We want to be part of something that is actually growing. New York mirrors the growth we see in our company.”
Johnson expects his staff of 9 to expand to 25 in the next year and a half. The search is underway for larger lab space in Manhattan, where such space is developing rapidly.
Intra-Cellular Therapies, a specialist in neuropsychiatric and neurological disorders, moved into the city’s center of biotech activity in 2014 when it began leasing lab space in the West Tower of the Alexandria Center for Life Science, a two-tower campus that Alexandria Real Estate Equities had opened in 2010. Tenants in the East Tower, which had been the first to open, included Eli Lilly and Company, Roche, and a branch of Pfizer’s Centers for Therapeutic Innovation (CTI), through which the drug firm collaborates with academic researchers.
Several real estate development companies are repurposing buildings in Manhattan as laboratories and office space for life sciences companies. One is Taconic Partners, which opened the Hudson Research Center in 2017. Taconic and its partner, Silverstein Properties, converted six floors in a Warner Bros. film editing and processing facility—called the Movie Lab building—on Manhattan’s West Side. Taconic has two other sites, including one on the East Side, under development with partners. The firm launched a life sciences subsidiary, Elevate Research Properties, earlier this year.
Last year, Deerfield Management repurposed an office building as life science research space called Cure not far from the Alexandria Center. Janus Property and J.P. Morgan Asset Management are working on a similar facility in Harlem.
And Alexandria plans to keep building. With its two towers, totaling 728,000 sq. ft. (67,600 m2), at nearly full occupancy, the firm plans to build a third, 550,000 sq. ft. tower.
Outside Manhattan, the 500,000 sq. ft. BioBAT in the Brooklyn Army Terminal is operated by New York’s Downstate Medical Center and ELabNYC, an entrepreneurship mentoring program. It began leasing lab space to biotech firms in 2008. And three real estate developers, including Alexandria, are bringing a total of 650,000 sq. ft. of lab space to Long Island City, Queens.
“The dramatic increase in activity in the last 5 years is directly tied to investment that the city and state made since 2016,” says Maria Gotsch, CEO of the Partnership Fund for New York City, a nonprofit that works with New York City Economic Development Corporation (NYCEDC) and the Empire State Development agency.
Gotsch points to NYCEDC’s LifeSci NYC, a $500 million initiative announced in 2016 that offers tax incentives to promote investment by real estate developers, as well as R&D tax credits for start-ups. New York State followed with a $620 million life sciences incentive program in 2017. NYCEDC announced an additional $500 million investment last year.
Incubators supporting start-ups appeared as early as the late 1990s, when the Audubon Business and Technology Center, hosted by Columbia University uptown in Washington Heights, opened. In 2013, Sam Sia, a Columbia biomedical engineer, and Christine Kovich, a financial services entrepreneur, launched the Harlem Biospace biotechnology incubator. But the concept has accelerated in recent years.
JLabs, operated by a division of Johnson & Johnson, opened on one floor of the New York Genome Center in 2018 with the help of $17 million in state funding. BioLabs, a Cambridge-based company, opened BioLabs at NYU Langone the next year with $5 million from LifeSci NYC and backing from NYU Langone Health, Bristol Myers Squibb, and other corporations. Both are in Lower Manhattan’s Hudson Square neighborhood, home to Google’s new complex.
Keeping pace, Alexandria has also launched an incubator venture, installing the first Alexandria LaunchLabs on half a floor of the center’s West Tower in 2017. Last year, Alexandria opened a LaunchLabs in partnership with Columbia University on one floor of a building owned by the university’s medical school—space once occupied by the Audubon incubator. LaunchLabs now has operations in all the major US biotech hubs.
Managers at the incubators are enthusiastic about the unique environment for biotech start-ups in New York. “You have diversity here,” says Melinda Richter, founder and global head of JLabs at Johnson & Johnson Innovation. “If we are going to tackle the disparities of health, we need to think about all communities, and all communities are represented here in New York.”
Then, there’s the entrepreneurial spirit. “It’s like, ‘We are going to do whatever it takes to get it done.’ Never say die,” Richter says. “That’s New York.”
Biotech presents unique challenges, however. “In tech, you give a couple of guys a couple of computers, a couple hundred thousand dollars, and a couple of years later they have a project they can sell to Microsoft, Google, or Facebook for $200 million.” Richter says. “In life science, when you start a new company, you need specialized infrastructure, you need specialized capital equipment, you need special permits and licenses.”
JLabs is designed to support start-ups in all these areas—beginning with equipped lab space, according to Richter. “When you get into JLabs, you can start pipetting in 24 hours,” she claims. The incubator also provides networking, fundraising, and technical support. Each client is assigned a mentor at Johnson & Johnson called a JPal.
Other incubators provide similar space and networking amenities. Clients typically make use of dedicated and shared labs and equipment, residing for an average of 2 years before moving to larger space elsewhere—a move requiring success both in research and in obtaining additional financing.
“We have all the tools for foundational research,” says Glennis Mehra, director of BioLabs at NYU Langone, which hosts two floors once occupied by ImClone Systems, an early New York City biotech success story. “The model has proven itself in the short time we’ve been open,” she says. “We have graduated four companies very successfully.” All stayed in the city, taking space in the Alexandria Center, Deerfield’s Cure lab space, and the Hudson Research Center, Mehra says.
About half the companies at BioLabs are working in traditional therapeutic areas, Mehra says. Others—like C16 Biosciences, a firm pioneering sustainable alternatives to palm oil that recently moved from BioLabs into the Hudson Research Center—are active in other areas of biotech.
Applicants to the incubator go through a rigorous selection process during which they are vetted by a panel of New York University and NYCEDC representatives as well as by corporate sponsors of BioLabs. “I like to believe we are curating for a particular type of founder and a particular type of scientific endeavor,” says Mehra, herself an entrepreneur in the health-care arena. “I like to see someone who can articulate their proposition and sell. If you can sell me on it, you can sell anyone.”
Brian Thomas, executive director of Alexandria LaunchLabs at Columbia University, watched developments in New York City over the past decade at his first job in the city, at Pfizer’s CTI at the Alexandria Center. He came to New York after working as a researcher at various biotech companies in Cambridge for 14 years.
“I had been trying for many years to live in New York City and could never find a job,” he says. “It was really for academics, and I wasn’t ready to go back and get my PhD at the time.” But he recognized the potential of a program, like CTI, that supports academic investigators in New York—and he made the leap.
Thomas says he went in with his eyes wide open. “What I saw very quickly was how actively the city, Alexandria, and the institutions were working toward making New York City as much of a hub as they possibly could,” he says.
Witnessing the growth of opportunity in the city since he arrived, Thomas was enthusiastic about moving to LaunchLabs at Columbia. “One of the reasons I took this job is that it made so much sense to put one of these launch labs right in the middle of one of the major academic institutions that creates companies.” Most of the 10 start-ups at the incubator spun out of Columbia.
But New York City is no Cambridge, Thomas says. “New York will not have a central Cambridge hub presence. We should think of Manhattan as many hubs. It took me a while to get my head around that. You have to decide which part of the city you want to live in and do research in.”
Others who have witnessed developments in New York City firsthand are the leaders of companies that grew up and stayed. Sharon Mates, cofounder and CEO of Intra-Cellular, which launched in 2002, has seen it all.
“We started the company in New York because we started it with technology from Paul Greengard’s lab at Rockefeller University,” Mates says. Intra-Cellular focuses on nerve cell signaling pathways elucidated by Greengard, who received the Nobel Prize in Physiology or Medicine in 2000. But finding a home in the city wasn’t easy.
“First of all, space was extremely difficult to get,” Mates recalls. “The Alexandria Center didn’t exist yet.” The fledgling company lucked into Columbia’s Audubon incubator; it sublet space and then was able to rent directly.
Intra-Cellular grew and was able to move in 2014 into the West Tower of the Alexandria Center, where it now has 40,000 sq. ft.
The company has also expanded out of town. Its first drug, Caplyta, was approved for schizophrenia in 2019 and bipolar disorder in 2021. “We have a whole sales force now, and they’re all over the place,” Mates says. “But the research is maintained at the Alexandria Center. It’s a great place for the research people to be, and it does give us a chance to hire people coming from the academic institutions, because they all want to stay in New York.”
Kallyope, named after the Greek muse presiding over poetry, song, and the arts and sciences, moved into the Alexandria Center when the company was formed in 2015. The firm employs technologies including gene sequencing, neural imaging, and cellular and molecular biology to study neural and hormonal signaling between the gut and the brain. Kallyope was founded by three Columbia scientists, including Richard Axel, a recipient of the 2004 Nobel Prize in Physiology or Medicine.
“Early on there was some discussion of having the company launched in the Bay Area or potentially in Boston,” says Nancy Thornberry, Kallyope’s founding CEO and current chair of R&D. “But there was a decision to stay in New York in part because the founders were there, and we envisioned that they would be intimately involved in helping to guide the science, particularly in the early years.”
The Alexandria Center was one of very few options at the time, and perhaps the only one with a vivarium, which Kallyope required for in vivo biology. The company launched with 6 employees and has grown to about 100. “We’ve taken additional space there on four occasions,” Thornberry says. It now occupies half a floor in the West Tower.
Thornberry says Kallyope identified New York City’s untapped talent pool as another advantage of setting up there rather than in Boston or one of the California hubs.
“There is not a lot of competition for talent, and there are so many remarkable research institutions in New York City, as well as so many amazing scientists and clinicians in the New Jersey pharma corridor and other places that are relatively local,” she says. “We envisioned that it would be relatively easy to recruit, and that has proven to be the case.”
Kallyope has managed to keep annual employee turnover below 3%, she says, far lower than the churn in the major life sciences hubs.
Some of the more recent members of the New York City biotech community have diverged from the script of launching from local research institutions, though they appreciate their proximity.
Black Diamond Therapeutics graduated last year from BioLabs at NYU Langone to the Alexandria Center. The company, whose cofounders met at OSI Pharmaceuticals, launched with funding from New York–area venture capital investors and with its own technology for discovering drugs targeting allosteric mutations that drive cancer.
Black Diamond, which has a candidate in Phase 1 clinical trials for non-small-cell lung cancer and glioblastoma, opened its business headquarters in Cambridge in order to mix with the Boston area’s community of experienced biotech entrepreneurs. But the firm has made a long-term commitment to research in New York City, according to Elizabeth Buck, a Black Diamond cofounder and its chief scientific officer.
“New York is a smaller community for biotech, but if you look at the number of academic institutions with investigators who are starting companies, who are eager to collaborate, the environment certainly is as rich as in the Bay Area or in Boston,” Buck says.
C16, Black Diamond’s classmate at BioLabs, was conceived in Cambridge, where its three cofounders met and began thinking about palm oil alternatives.
The “accidental entrepreneurs” came to New York with their own science, looking for a biotech environment less narrowly focused on therapeutics than those in Boston or the Bay Area, CEO Shara Ticku says. “We looked at our options, and New York City became very compelling. The city and state were actively trying to build an ecosystem there. It was a really exciting growth space.”
The New York City area is also home to many of the consumer product companies C16 targets as potential customers. Ticku loves being in New York, she adds, and finds that many talented scientists do as well.
And just entering the JLabs incubator, Linus Biotechnology, a start-up spun out of Icahn School of Medicine at Mount Sinai, is looking forward to growing in New York City. The company, which specializes in exposome research, is debuting with momentum, having been granted a breakthrough designation by the US Food and Drug Administration for the first exposomic biomarker for detecting autism at birth.
Linus, named after Linus Pauling and the Greek mythological figure associated with musical dynamics, already has two deals with major drug companies, according to founder and CEO Manish Arora, a professor of environmental medicine at the Icahn School.
Arora committed to New York City largely because of the diversity of the population, a key to his research and one that can’t be matched even in a city like Boston. “I have access to a 50,000-patient biobank at Mount Sinai Hospital,” he says. “In East Harlem there are the poorest recent immigrants. I have patients who have just come from Africa. You walk 10 blocks, there are some of the wealthiest postcodes.”
The environment mirrors Linus’s diversity, says Arora, who notes that its cofounders came to the city from India, Ireland, and Australia.
The bottom line for Linus is much the same as it is for Kodikaz, the next block over in Hudson Square: the city’s generative vibe, which is especially in evidence at its venture-creating academic institutions, Arora says.
“Mount Sinai’s leadership is very nimble, very capable of early innovation,” he says. That capability reflects what he calls the “culture of hustle” in New York City, where biotech rubs shoulders and finds connections with Wall Street and the growing information technology sector. “That culture of hustle involves the whole city,” Arora says. “It impacts all of us.”
This story was updated on Aug. 22, 2022, to correct the figure for the rental of biotech lab space in Manhattan last year. It was $114, not $142, per square foot. Also, the figure is for average asking rent, not average rent.