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innovation Economy

Kendall Square reached inflection point, passing from tech to biotech center

Scientist David Miller of Vaxess Technologies treated cells with vaccines at LabCentral in Cambridge.

Scientist David Miller of Vaxess Technologies treated cells with vaccines at LabCentral in Cambridge.

The three-story brick building at the corner of Main and Osborn streets in Cambridge, on the edge of Kendall Square and the MIT campus, captures three distinct eras in the city’s innovation history. In the early 1800s, it was the site of Kimball & Davenport, the first builder of passenger railroad cars in America.

After World War II, it was the epicenter of the Massachusetts tech boom, home to the office and private lab of Edwin Land, Polaroid’s founder. In between, Thomas A. Watson strung a wire from Boston to Cambridge, and set up the equipment to receive the first “long distance” phone call, in 1876.

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Today, the building at 700 Main Street is home to LabCentral, a nonprofit that rents space to 26 fledgling biotech companies. It is surrounded by new buildings and buildings under construction for the pharmaceutical giants Pfizer and Novartis. And one-year old LabCentral itself hopes to expand soon, more than doubling in size to about 70,000 square feet.

If Kendall Square in the 19th and 20th centuries was about manufacturing and then technology, in the 21st century it is definitively about life sciences — the business of discovering and developing new medicines. The neighborhood has reached a new inflection point in the past two years, with many more biotech companies and investors finding they can’t afford not to have a presence there.

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Meanhwhile, growing tech companies are hopping — or getting pushed — across the river to Boston. As a result, Kendall Square has transitioned from tech to biotech center.

“It’s dramatically different now,” says Peter Hecht, chief executive of Ironwood Pharmaceuticals. “It’s way past a tipping point.”

If Nashville is the nexus of country music, and Hollywood the entertainment biz, Kendall Square is the global hub for transforming scientific insights into new drugs. How strong is the gravitational pull? For Pfizer, having scientists based at Alewife was just not close enough, so it built a new $300 million building and moved them to Kendall.

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Last week, Illinois-based drug company Baxter International said it would rent space in Kendall for a research division that will employ about 400 people. In June, the chief executive of Paris-based Sanofi, which in 2011 paid $20 billion for the biotech firm Genzyme, said he was relocating to Cambridge. Almost every new construction project underway in the neighborhood involves office or lab space for the biopharma business, which assumes that more big players will follow — and today’s young start-ups will grow.

What actually happens inside the R&D hive of today’s Kendall Square? Everything from early academic work into the origins of disease and the best ways to attack it, through venture capital funding, company formation, and the partnerships between small companies and large ones that provide the money to keep developing a drug, test it in humans, and eventually sell it.

What doesn’t happen in Kendall? Running those human trials, since there isn’t a hospital, and manufacturing, packaging, and distributing the drugs.

The building that houses Wendy Winckler’s lab is part of the Technology Square complex; it once housed companies like Polaroid, the supercomputer maker Thinking Machines, and the Massachusetts Institute of Technology’s computer science and artificial intelligence labs. (Before that, there was a soap factory on the site.)

Now, Winckler’s Next Generation Diagnostics lab at Novartis uses computers and DNA sequencers to better understand tumors. Tumor tissue is shipped to the lab encased in paraffin wax, sliced thin, and put onto slides so technicians can separate tumor cells from normal cells. Technicians then use special equipment like a nucleic acid extractor — a bit smaller than a microwave, but costing $700,000 — to remove and sequence tumor cells’ DNA.

The objective is to better understand different types of tumors so more precise treatments for individual patients can be prescribed. “The hope is that we’ll be able to see more lasting effects with these approaches — and hopefully cures,” Winckler says.

About 37 people work in Winckler’s lab, about half managing the data spit out of the sequencers. By late next year, the group will move into a vast new Novartis campus that will stretch from Massachusetts Avenue to Main Street, effectively connecting Kendall Square and the University Park biotech complex to the north of MIT. Novartis, a Swiss firm, was one of the first “big pharma” companies to put down stakes in Cambridge, in 2002.

As more players come to Kendall, rents for office space are creeping toward $70 per square foot, says Roy Hirshland of the commercial real estate firm T3 Advisors. Many growing tech companies are considering less expensive office space near North and South Stations and in Downtown Crossing, Hirshland says, leaving Kendall to life sciences and a few bigger tech companies, like Google and Microsoft.

So why are biotechs willing to pay? “The networking is an intangible,” says Nick Leschly, chief executive of Bluebird Bio, which moved into a new building near the CambridgeSide Galleria last year. “I go with my laptop and sit at Fuji in the afternoon, and I meet four people that I’d been meaning to see.”

When I interviewed Michael Gilman, a serial biotech entrepreneur who works a few blocks away, he had just returned from a board meeting in the building that houses Fuji, a Japanese restaurant. The building was originally built for the tech company Palm Computing in the early 2000s, but Palm never moved in. Today it houses three biotechs.

Gilman’s latest company, Padlock Therapeutics, hopes to develop drugs for autoimmune diseases. It has raised several million dollars in seed funding, and, if it can prove its approach, Gilman is hopeful he’ll attract more.

An R&D executive who runs the Kendall Square office of Pfizer, Jose-Carlos Gutierrez-Ramos, chooses a great word to describe what is happening in Kendall: interdigitation — a tight weave, like when you clasp your hands together.

Gutierrez-Ramos first began working in the neighborhood in 1996. In those days, scrappy biotech start-ups often talked like guerrilla fighters who were going to seize the riches of big pharma; now, they’re often collaborators. Why is that?

Today, academic researchers worry about the future of government funding, big pharma companies worry whether they have enough new drugs in their pipelines, and biotechs worry about the amount of money, typically hundreds of millions, required to bring a new medicine to market.

“All these constituents have moved out of their comfort zones, and they’re much more open to interactions,’’ Gutierrez-Ramos says.“ It feels like we’ve joined teams, and we have common goals.”

Gutierrez-Ramos works across a courtyard from the old brick building at 700 Main Street. In the same way that Davenport & Bridges once made railroad cars, or Polaroid cranked out cameras, Kendall today makes new medicines. And instead of helping us get around or preserve memories, the goal is to help us stay healthier and live longer.

Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner and on betaboston.com.
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