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Will lack of lab space squeeze out LI tech companies?

A shortage of local lab space may prompt

A shortage of local lab space may prompt companies including Mirimus Inc., a biotech start-up based in Cold Spring Harbor, to leave Long Island. Pictured above are, from left, Jung Shick Kwon, Boyoung A. Yoon, Christof Fellmann, co-founder Greg J. Hannon and chief executive Prem Premsrirut. (May 29, 2012) Photo Credit: Heather Walsh

In a climate-controlled wing of Cold Spring Harbor Laboratory, researchers for a fledgling bioscience company tinker with the genes of mice, preparing them for testing drugs to combat cancer, dementia and autism.

Mirimus Inc., launched in 2010, has eight employees and is the type of high-tech business that officials hope will flourish on Long Island. Yet it may leave. Like any growing company, Mirimus needs room to expand. And that will not be easy on the Island.

"There is almost no lab space here," said Prem Premsrirut, chief executive of Mirimus, which is considering a move to Brooklyn. "If there was more, then staying would be an option."

Business, academic and political leaders have long hoped start-ups from Cold Spring Harbor, the Feinstein Institute for Medical Research, Stony Brook University and other research institutions would become Long Island's lifeblood, transforming the economy here the way software did in Silicon Valley. But the effort has yet to take hold. Part of the challenge, officials say, is the region lacks enough laboratories for young companies, forcing some to seek space elsewhere when they need to grow.

"It's a significant problem -- not just on Long Island, but across New York State," said Nathan Tinker, executive director of the New York Biotechnology Association, a nonprofit trade group.

After a series of fits and starts, the nascent movement to make Long Island a biotech hub has gained momentum in recent months with the creation of Accelerate Long Island, which is coordinating efforts to support start-ups.

Laboratory space is just one important element of the initiative. Officials say Long Island also needs more venture capitalists willing to bet on start-ups. It needs to streamline approval processes within the bureaucratic patchwork of state, county and local governments. It needs more experienced entrepreneurs. And, they say, it needs more apartments and bustling downtowns to attract innovative young workers.

If Mirimus leaves, it would join a growing list of local companies forced to look beyond Long Island because of lab space. GenDx, a start-up from Cold Spring Harbor that develops DNA diagnostics for breast cancer, is considering licensing its technology to a California company after being unable to find space here.

And in 2008, Helicon Therapeutics moved to San Diego after the company's plan to expand its laboratory at Farmingdale State College collapsed. Helicon blamed objections from state officials who feared housing research animals on campus would spark controversy.

"We had 26 employees when we left. Now we have 180 and plan to grow to 250 in the next year. That could have happened on Long Island," said Tim Tully, a founder at Helicon, which in January was acquired by Dart Neuroscience, a San Diego biotech company.

Costly to build

In most cases, developers step in when demand for real estate outpaces supply. But laboratories are different. The interiors must be meticulously controlled to keep heat, cold and humidity from throwing experiments off balance. Air is circulated ten times an hour to keep breathing safe for researchers. And antiseptic storage chambers protect laboratory mice and rats from outside germs.

Those amenities are expensive, making laboratories at least three times more costly to construct than offices, according to Tom DiMicelli, who sells and leases industrial and office properties on Long Island for the brokerage Jones Lang LaSalle. Consequently, start-ups cannot afford to build them. And private developers are leery of putting them in regions that don't already have a dense mass of biotech companies.

Density is key to the success of biotech start-ups. It is easier for companies to collaborate when they are clustered together. And since start-ups often fail, it's easier to convince potential workers to move to a region with other options in case their employer folds.

Since most private investors are unwilling to underwrite the initial risk, governments and universities often fill the void and have helped establish some of the nation's thriving biotech hubs, including those in Boston and in San Diego. On Long Island, the state has teamed with local governments and private partners to build three labs, totaling 135,500 square feet, to be incubators for start-ups.

The two smaller ones, with 33,000 square feet, are affiliated with Stony Brook University. One is on campus. The other is 25 miles east in Calverton. School officials say they have been able to accommodate nearly every fledgling company that has sought space.

But the largest of the incubator labs, the Broad Hollow Bioscience Park at Farmingdale State College, no longer has room for start-ups. While the bioscience park plans to seek government aid to expand the 102,500-square-foot facility, it is now fully leased to one of Long Island's most successful homegrown biotech companies -- OSI Pharmaceuticals -- as part of a deal to keep the business' research arm here after it was acquired in 2010 by Astellas Pharma Inc. of Japan.

Options scarce

With no space at Broad Hollow, there are few options for young companies seeking lab space west of Stony Brook. That's hard for start-ups such as Mirimus that have roots at Cold Spring Harbor Laboratory.

Founded by Cold Spring Harbor scientists, the company uses single-stranded molecules called ribonucleic acids to essentially switch on and off individual genes in mice that will be used in the early-stage testing process of drugs to fight a wide variety of diseases. The company rents its 500-square-foot lab from Cold Spring Harbor. But Mirimus will outgrow the space within the next year or so.

Premsrirut, who earned her doctorate in genetics from Stony Brook in 2010, said she doesn't want to move 30 minutes east to Stony Brook or Calverton. "It would be very difficult to attract the staff we need if we move farther onto Long Island. We need to be closer to the city," she said.

So Premsrirut plans to seek space in a laboratory complex Downstate Medical Center is expanding at the Brooklyn Army Terminal that will eventually total 500,000 square feet.

Officials, meanwhile, are working to keep other companies from leaving. The Bioscience Park at Farmingdale plans to add a third building that will eventually encompass 50,000 square feet. And last year, Nassau County proposed building a biotech research and development facility at the Nassau Hub in Uniondale, but the future of that project remains uncertain.

"The problem," said John Maroney, who oversees the process of commercializing technology at Cold Spring Harbor, "is what do we do in the meantime."

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