July 2, 2009

Even in Weak Economy, Business Is Booming at UCSF Biotech Incubator

Omniox founder Stephen Cary, chief operating officer SallyAnn Reiss and research associate Jamie Romero talk shop in the communal lab space at the QB3 Garage.

With San Francisco’s office leasing market in the doldrums and availability up nearly 20 percent from last year, many property managers are doing whatever they can to entice new tenants. UCSF’s Douglas Crawford, PhD, has the opposite problem. “We’re chock-full, and my phone keeps ringing,” said Crawford, associate executive director of the California Institute for Quantitative Biosciences (QB3) at UCSF’s Mission Bay campus, where he supervises the QB3 Garage, an incubator for biotech startups. “Despite the wider economic recession, business is booming.” Crawford said he is currently receiving up to four calls a week from companies looking to occupy one of the six slots in the 2,500-square-foot cluster of rooms that comprise the garage. Unlike most facilities, the garage can lease micro-amounts of space – as little as 120 square feet – which is a big draw for the often cash-strapped companies. That was certainly true for one of the newest occupants, Omniox Inc., which arrived at the garage in April and has taken over a 270-square-foot office and about 50 square feet of communal lab space. “We thought, ‘Let’s get as far as we can and create as much value as possible with as little as possible,’” said SallyAnn Reiss, the company’s chief operating officer. Through some creative organizing, Omniox has managed to cram a fully functioning protein lab into a room that company founder Stephen Cary, PhD, compared to a “Tokyo apartment.”

Small Space, Big Ideas

Within that very small space, Omniox is engaging in some very big work. Cary and his team hope to commercialize a protein that binds to oxygen and transports it to tissues and systems throughout the body. The product, based on the work of UC Berkeley chemist Michael Marletta, PhD, is being actively tested in animals with the hope that it could someday be used for a range of clinical applications, including cancer treatment and the treatment of trauma patients suffering from rapid and significant blood loss. “Prior efforts to develop therapeutic oxygen carriers over the past 30 years have failed after they proved to be toxic in clinical trials,” Cary said. “The raison d’être for Omniox is that we believe we’ve discovered a way to deliver oxygen without negative side effects.” In late 2008, Omniox received a grant from the National Cancer Institute to focus on using its breakthrough technology to deliver oxygen to tumors – a process that could greatly increase the efficacy of radiation therapies. The company is also applying for a number of grants from the National Institutes of Health, which is in the process of doling out more than $10 billion in economic stimulus funds. Cary said the proximity to the University’s renowned research and clinical enterprise at Mission Bay was part of the appeal of the QB3 Garage, and he has already formed partnerships with several UCSF faculty members. For example, the company recently submitted a joint grant proposal with John Kurhanewicz, PhD, UCSF professor of radiology, pharmaceutical chemistry and urology, who specializes in using advanced imaging techniques to study and treat prostate cancer. The grant would fund the study of real-time metabolic changes within oxygen-deprived tumors after they are exposed to Omniox’s oxygen-delivery proteins. “At the garage, we’re constantly networking with professionals and other startups,” Reiss said. “There’s a lot of good synergy and an atmosphere of ‘we’re going to get this done.’” Reiss said she wasn’t surprised by the continued strong demand for lab space at QB3, even in tough economic times. “I don’t think science is as cyclical as, for example, high tech,” she said. “When science is ready, it’s ready.” Entrepreneurs are limited to two years at the garage as they pursue investors and make use of the many resources UCSF has to offer. So far, the facility has housed 12 companies, four of which have received Series A funding – the first round of venture funding – and one of which was acquired for $25 million. Crawford said he hopes many more companies will be able to benefit from the garage’s low-cost, collaboration-friendly setup – companies that, like Omniox, could become the next biotech superstars. “Out of the darkest days of the recession will come great things,” he predicted in a recent interview. “We’re hoping to participate in the growth and rebirth of the Bay Area economy. The innovative capacity of this region is just tremendous.” Photo by Robin Hindery

Small Space, Big Ideas

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