Business

LabCentral will more than double its space to incubate drug-discovery startups

Cofounder Johannes Fruehauf said LabCentral, which currently operates in 28,000 square feet, has a waiting list of early-stage companies seeking space.

Globe Staff/File 2014

Cofounder Johannes Fruehauf said LabCentral, which currently operates in 28,000 square feet, has a waiting list of early-stage companies seeking space.

LabCentral, a four-year-old nonprofit that runs shared laboratory space for biotech startups, will more than double its capacity this summer to about 70,000 square feet — enough room to accommodate 70 to 85 companies.

The expansion of LabCentral on the outskirts of Cambridge’s Kendall Square is expected to be announced Tuesday. It will be financed by a $5 million capital grant from the Massachusetts Life Sciences Center, which in 2013 approved an initial $5 million grant to launch the incubator.

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With the new grant and about $4.5 million raised by LabCentral, the incubator is renovating about 42,000 square feet on the second floor of 700 Main St., where technology pioneer Thomas A. Watson received the first long-distance phone call in the 1800s, and Polaroid founder Edwin Land kept an office a century later.

Cofounder Johannes Fruehauf said LabCentral, which now operates in 28,000 square feet on the ground floor of the building, has a waiting list of early-stage companies seeking space. About 30 startups, each with one to 10 employees, operate at its “open benches,” where researchers from different firms work side by side, or in larger private lab suites.

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“We’ve always been oversubscribed because LabCentral has a very attractive offering for startups,” said Fruehauf. “We decided we needed to expand.”

Entrepreneurial drug-discovery companies leasing space at LabCentral take advantage not only of its shared research space, but also its scientific equipment and other infrastructure. In addition, there’s access to an animal testing facility across the street in Technology Square.

The companies are typically funded by venture capital, angel investors, federal grants, or philanthropies. Some also have partnerships with pharmaceuticals companies, many of which provide annual cash support for LabCentral’s administrative operations.

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Aquinnah Pharmaceuticals Inc., which is developing small molecules to treat neurological disorders such as Lou Gehrig’s and Alzheimer’s diseases, started in LabCentral three years ago and now employs 10 people there as its largest company. The company, which has raised $15 million from Pfizer Inc., AbbVie Inc., and Takeda Pharmaceutical Co., has already moved from the first to the second floor of LabCentral and hopes to almost double its staff there.

“This allows us to hire more scientists,” said Aquinnah founder and chief executive Glenn Larsen. “It gives us more space so we can add new jobs.”

The new area on the second floor, formerly occupied by a Pfizer biologics research team, will include U-shaped bench arrangements for growing startups, Fruehauf said. When the companies expand further, he said, they typically leave for larger quarters.

“We’ve been very active graduating companies out of the space here,” he said. “We’ve already graduated 45 companies. We want to be the launchpad for companies that outgrow us.”

Fruehauf, who also runs private Cambridge Biolabs, cofounded LabCentral with serial entrepreneur Peter Parker and Timothy Rowe, chief executive of the Cambridge Innovation Center, a more established Kendall Square incubator for high-tech and other startups.

In less than four years, “LabCentral has really changed the way Massachusetts thinks about growing and incubating life-sciences companies,” said Travis McCready, president of the Massachusetts Life Sciences Center, the agency that’s funded the incubator.

McCready said his agency’s original $5 million investment in LabCentral has helped fuel $1.1 billion in private investments in the companies housed there. Those businesses together have created more than 700 jobs. “Dollar for dollar, it’s probably been the strongest investment the life sciences center has made,” McCready said.

The incubator’s expansion is part of a broader buildout of the biotech industry between Massachusetts Avenue and Kendall Square in Cambridge. The Pfizer team that vacated the second floor of 700 Main St. in February moved into new quarters in a building next to the Pfizer research center adjacent to LabCentral.

Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.
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