Wanted: Space for 'wet labs': Arizona's Biotech growth slowed by space limitations

Arizona will spend $1.4 billion to foster a thriving biotechnology economy, yet there is little space for small research companies to conduct business.

Entrepreneurs and scientists with dreams of inventing disease-curing drugs first must tinker with waterlines, sinks and ventilation systems to turn old office buildings or warehouses into labs that can handle their research needs.

Some small biotech companies bypass the Valley altogether because they can't find ready-to-move-in lab space outfitted with basics such as sinks and high-powered air systems.

"At one point, we had at least six companies that were serious about relocating to Greater Phoenix," said Troy Ignelzi, vice president of emerging technologies for the Greater Phoenix Economic Council, the Valley's principal economic development group. "Because of inadequate lab space, we've only been able to land two of those."

A lack of wet-lab space has cost the region high-wage research jobs and has undercut efforts to build the state's 21st-century economy. The critical space shortage is a hurdle that economic-development leaders, science leaders and cities are aware of and are taking steps to address. Among the problems cited by developers: high expense, lack of available land and the general risk of building for unproven companies.

Ignelzi and others say the problem stems in part from Arizona's buzz of biotech activity. More than a half-dozen new Arizona labs with state-of-the-art equipment have sprouted in the past few years to support the state's burgeoning biotech efforts, but the lab space is reserved for hospitals, universities and non-profit research groups such as the Translational Genomics Research Institute.

There is little private lab room, the type of space that can make Arizona home to the next Pfizer or Merck, multibillion-dollar drug companies that drive a region's economy and invent treatments to improve quality of life.

Out-of-state businesses or startups seeking privately owned lab space to mix chemicals or conduct experiments have few options amid the region's concrete menu of box-style warehouses and offices.

Michelle Hanna couldn't find a sliver of laboratory space when she arrived in the Valley six years ago.

So she pieced together a makeshift "wet lab" from a toilet at her brother's Scottsdale warehouse. She later moved her company, RiboMed Biotechnologies, to a doctor's office at 32nd Street and Indian School before buying and converting an old building in downtown Phoenix.

"It was a long path of survival that led me to this building," Hanna said of RiboMed's lab at Seventh and Van Buren streets downtown. Her company works in cancer research.

"I showed up here six years ago with five U-Haul trucks full of equipment, and I could find no place to put it."


InSys Therapeutics
Some companies are still searching.

Lake Forest, Ill.-based InSys Therapeutics Inc., a small company developing pain medication for cancer patients, is the type of company that Arizona hopes will power the state's future economy.

The company committed itself to relocating its 10-person corporate office to the Valley within the first six months of 2007. The company is targeting an initial public stock offering next year.

But despite the best effort of economic-development types, InSys has yet to find suitable lab space in the Valley.

"We want to move somewhere that already has new lab space," said Mike Babich, an InSys board member and analyst with InSys investor EJ Financial Enterprises.