Jacob Nathan’s startup, Epoch Biodesign, raised a chunky $11m seed spherical earlier this yr. The artificial biology firm is growing plastic-eating enzymes, which might assist breakdown hard-to-recycle plastics.
With the VC {dollars} in his pocket, Nathan had a brand new downside to unravel: he wanted a scientific lab area to lease — a activity that rapidly proved difficult. “There’s simply nowhere to go,” he says.
Epoch ended up renting a standard workplace constructing in central London and changing it right into a lab area itself. It’s a much more expensive choice than renting an current lab, Nathan says, and used up a portion of the capital Epoch had raised.
“If the UK needs to hold on to its corporations and provides them an ecosystem wherein to scale and develop, we’d like the area for them. It’s actually necessary,” Nathan says.
In Oxford and Cambridge, the primary clusters of biotech within the UK, demand for lab area is vastly outweighing the free area obtainable.
Knowledge from Bidwells, an property agent specialised in labs, reveals that in June 2022 there have been corporations on the lookout for a mixed 1.2m sq metres value of lab area in Cambridge — with none by any means obtainable. Oxford was comparable, with simply over 800k sq metres required, and 18k sq metres obtainable.
The pandemic-fuelled biotech surge
The squeeze on area within the cities has bought worse because the pandemic, says Martin-Immanuel Bittner, CEO of Arctoris, an Oxford-based startup that automates drug discovery.
The coronavirus pandemic accelerated the UK’s biotech ecosystem, Bittner says, however the services didn’t enhance to meet up with demand. Funding into UK biotech hit a report £2.8bn in 2021, in keeping with the UK BioIndustry Affiliation, a rise of greater than 1,000% since 2012.
“In Oxford, it’s tough to get lab area each throughout the metropolis centre and the encircling life sciences parks,” he says.
“Some corporations won’t be able to safe lab area as rapidly as they want, and operations shall be slowed down in consequence.”
Shedding time and money should not the one implications of the lab area squeeze. It’s which means some founders stick round in college labs longer than they in any other case would, Nathan says.
“Persons are restricted to figuring out of corners of educational labs, which has implications on IP possession, relying on the college.” The longer a startup stays in a college, the extra rights to the mental property the college tends to ask for.
In Oxford, Bidwells estimates that there are 17m sq metres of area in analysis institutes and universities — in comparison with 1m in business area.
The actual property alternative
The skyrocketing demand for lab area is attracting personal builders to construct new lab services, says Daniel Hajjar, managing principal at HOK, the structure agency that designed Epoch’s new services.
“One of many challenges that London continues to face is offering lab area that’s reasonably priced, and that may truly see the businesses develop from a younger startup to a way more developed entity,” Hajjar tells Sifted.
Constructing lab services has a couple of 20% to 25% uplift in comparison with constructing workplace areas, in keeping with Hajjar. (This goes for stage 2 containment labs, the commonest sort in biology analysis; laboratories with larger safety measures can price way more to construct.)
In London’s Canary Wharf, a 750k sq ft lab is beneath building, set to be the most important business lab area in Europe. That mentioned, it received’t open till 2026.
So what’s the answer?
The UK authorities is constructing labs, however very slowly in the meanwhile, Hajjar says, and there’s a necessity for a broader technique. UKRI, the nation’s analysis and innovation wing, pledged £213m in early 2021 to construct new labs and improve current ones. Funding is allotted regionally, by eight analysis councils that type the UKRI.
“I believe we’d like a country-wide technique. In any other case we might face a scenario the place there’s a glut available on the market for some time as a result of builders have continued constructing and there won’t be sufficient uptake,” Hajjar says.
Nathan agrees the federal government may very well be doing much more to facilitate the constructing of recent labs, in addition to actual property buyers. Publish-pandemic, the best way we use workplace area is altering, and actual property buyers ought to take the chance to show more room into labs, he says.
Within the present scenario, Nathan says the UK is forcing founders to go abroad until one thing improves — taking with them advances in issues like genomics, cell and gene therapies, in addition to artificial biology and its broad ranging purposes for meals provide and the setting.
“We’re susceptible to dropping a few of these corporations to the states or to Europe, if there’s nowhere to really put them,” Nathan says.
Freya Pratty is a reporter at Sifted. She tweets from @FPratty and writes Sifted’s local weather tech e-newsletter — you possibly can join right here.
Clara Rodríguez Fernández is Sifted’s deeptech correspondent, primarily based in Berlin. Observe her on LinkedIn right here.
