The roughly 1,000 employees who were laid off last year from Amgen Inc. produced a near feeding frenzy among recruiters and competing companies looking for talent.
Brent Reinke and Wayne Davey think they have a better idea.
The two are creating an incubator in Agoura Hills that aims to tap into the entrepreneurial spirit of the company's former workers by giving them a place where they can establish and grow biotech startups.
The specific goal: creating a commune for fledgling biotech firms that provides shared space for laboratories, offices and conference rooms. Plans call for an advisory council to steer new companies through the financial and legal hurdles faced by most startups.
"Having worked with a lot of scientists throughout my career, they're brilliant individuals," said Reinke, 47, a partner at the Westlake Village law firm of Musick Peeler & Garrett LLP. "But they don't always know what it takes to start and grow a company."
Reinke and Davey, 56, himself a former Amgen executive, found a two-story, 38,000-square-foot Agoura Road building where the owner is willing to front the money for renovations. The two are evaluating prospective tenants and hope to open the incubator in the spring.
If successful, Gold Coast Bio Center would be the largest biotech incubator in Los Angeles County, which is home to two others. The largest now is Momentum Biosciences in Culver City at just 10,000 square feet; it was founded two years ago by a group of UCLA and Caltech professors.
This isn't the first effort by Reinke to promote biotech startups amid the downturn at Amgen, which has seen sales of its leading anemia drugs slump after a series of studies raised concerns the drugs may promote tumor growth.
Last August, he co-founded the BioTech Forum in Westlake Village with another partner that brought together entrepreneurs, academics, venture capitalists and others with the intent of fostering a "biotech corridor" along the Ventura (101) Freeway near the county line between Los Angeles and Ventura counties.
Rivals also have taken notice of the opportunities. Several Bay Area venture capital and law firms have set up shop or have been visiting the region looking for promising startups they can fund or gain as clients.
Meanwhile, the incubator is in its own incubation period. The lease to the building has yet to be signed. And Reinke and Davey are still settling on a rent structure, though they said it would be competitive for a startup.
"There's a lot of people at a variety of biotech and life sciences companies that are ready to move out on their own," said Davey, vice president of finance at Abraxis BioScience Inc. in Los Angeles. "We are sensing a lot of frustration, like, 'Hey, I have a good idea, but the company isn't interested in it.'"
Earlier this month, the pair held a meeting at the Renaissance Agoura Hills Hotel to gauge interest in the incubator. About 60 entrepreneurs attended.
Among them was Vikram Patel, a biotech consultant in Camarillo. Patel was a director of research at Amgen until he was laid off last summer, and he remembers struggling to launch his own business outside the cocoon of the biotech giant.
For over a year, Patel has nursed the idea of starting a biotech company to provide research services and development, but he was stymied by a lack of funding and space. He sees an answer to at least some of those problems in the proposed incubator.
"It's a great thing," Patel said of the incubator. "I came away from the meeting with the idea that they're making a lot of progress. It's not just talking, there's also some action there."
However, Ahmed Enany, president of the Southern California Biomedical Council, noted that successful incubators often need a large pool of venture capital or a public partnership to defray costs and minimize expenses for the startups. Gold Coast Bio Center, as of now, has neither.
It is also very difficult for incubators to make money. "You're talking about a vulnerable crowd that doesn't have the cash yet to pay the rent, and some of these guys aren't going to make it," Enany said of incubator tenants. "So you have equity in companies that go bust."
Reinke said they settled on the private model after researching other successful biotech incubators like Accelerator Corp. in Seattle, and he said they're exploring the idea of a venture capital fund. He projected Gold Coast Bio Center would be cash-flow positive after a couple years.
Reinke and Davey do not intend to leave their current jobs if the incubator is successful. They consider themselves founders, not day-to-day managers.
Elsewhere in the Southland, far bigger plans to open L.A. biotech incubators as part of a commercial biotech park have foundered, including the most high-profile effort near the USC's Keck School of Medicine in Boyle Heights. There, despite the support of billionaire Eli Broad and other big-name L.A. business boosters, little has been accomplished to build a 110-acre park because of complications over land ownership.
And that initiative, which began seven years ago, had the advantages of being near a research university. Enany said an Agoura Hills park would be dependent on professional scientists leaving Amgen and other local biotech firms, such as Baxter International Inc., which has significant operations in Thousand Oaks.
"Time will tell if these companies will form and if the exodus out of places like Amgen will really generate the kind of innovations people are hoping for," he said.
For now, Reinke is focused on getting the doors to Gold Coast Bio Center open. Once he has commitments from about a half-dozen promising tenants, Reinke said that he and Davey will sign the building lease.
An architect has drawn up floor plans that will include two shared "wet labs" lab space for biological and chemical tests. The labs will be fully equipped and easy to reconfigure, Reinke said.
The incubator has a capacity for close to 20 tenants: 12 to 13 that will have access to the labs and office space, and the rest will use only office space. Converting a commercial building to lab space can be a huge expense for startups, with costs ranging from $50 to $200 a square foot, Enany said.
However, the co-owners of the building, Jacobsen Family Holdings LLC and Realty Bancorp Equities, both in Woodland Hills, have said they are prepared to pay the $4 million to $5 million cost of renovating the building. They plan to recoup the expense through rent and possibly taking equity in the tenants, said Douglas Jacobsen, a partner with Jacobsen Family Holdings.
Other biotech companies in the area are rooting for Gold Coast Bio Center, even if they end up competing with some of its tenants in the future.
John Philo, vice president of Alliance Protein Laboratories Inc. in Camarillo, said having a biotech incubator in Agoura Hills could spark synergy that local firms have long sought.
Philo, who left Amgen 10 years ago to start his business, knows first-hand the struggles of biotech startups. He said they can range from how to find a lawyer to handling payroll.
"That's really what this incubator is about," Philo said. "Lowering those barriers."
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