LabCentral, a crucial incubator for local drug discovery, is slated to grow amid industry slowdown

LabCentral, a growing feeder channel for local drug discovery, turned 10 years old last year at a time of genetic science breakthroughs but also funding constraints for early-stage companies. A more diverse cast of entrepreneurs is only one of the changes underway at the nonprofit incubator, which has expanded rapidly amid fluctuating vacancy rates and longer stays by belt-tightening biotech companies.

Biotech veteran Kamran Tavangar’s last company, Affinivax, was sold to pharma giant GSK. Tavangar moved his latest startup, Atias Pharma, into LabCentral last May to begin research on an injectable drug to treat pancreatitis and acute alcohol toxicity. In a tighter funding environment, he said he and his five employees may stay for a while rather than outfit their own private lab space in a high-end biotech office building.

“This [LabCentral] infrastructure lets us start research immediately,” he said. “I don’t need an office manager, I don’t worry about procurement. I just hire researchers, give them a lab bench, and say, ‘Go.’”

LabCentral, started with a $5 million grant from Massachusetts Life Sciences Center in 2013 under the state’s newly launched $1 billion life sciences initiative, has grown up with the area’s biotech industry. It now has about 50 industry partners, including drugmakers such as Pfizer, Takeda, and Biogen, who help fund its operations and, in return, get a “key to the front door” to monitor startups in their research areas.

LabCentral leases space to biotech startups, charging sliding monthly fees that are more expensive for private lab suites and less for co-working space. While its facilities aren’t cheap, they are typically more cost effective than commercial lab space in Cambridge and Boston because startups have access to shared services and equipment they don’t have to purchase and install.

From its initial site in a former Polaroid building catty-corner from Technology Square, the incubator has mushroomed into a shared-space stable hosting hundreds of scientists and more than 80 startups of different sizes across six sites in Cambridge and Boston.

Next to the original site is another building hosting startup companies needing more space. Two more sites are located down the road at the Kendall Square clock tower building, one nestled within Bayer research labs there. LabCentral also operates Pagliuca Harvard Life Lab, near Harvard Business School in Allston, and Blavatnik Harvard Life Lab, at Harvard Medical School in Boston’s Longwood Medical Area. A seventh site is planned for Harvard’s new enterprise research campus in Allston.

Amid the rapid buildout, LabCentral has had to navigate the same headwinds as commercial realtors. Venture capital outlays have plummeted since their recent peak in 2021, depriving early-stage life sciences companies of the funding that supports their growth.

Vacancy rates have fluctuated between 15 and 20 percent for much of the past year across all of LabCentral’s sites. But they’ve dropped below 10 percent in the current quarter, as the incubator used its newly opened buildings to accommodate startups of different sizes and retain more growing companies that might have relocated elsewhere in the past.

“The current mood is very difficult in the startup world, so many companies are using their money to do science rather than move into a fancy building in Cambridge,” said LabCentral founder and president Johannes Fruehauf. “They’re staying in our ecosystem longer than they used to because they want to be capital efficient.”

Recognizing a lack of diversity in the industry, the incubator launched LabCentral Ignite in 2021 to promote racial and gender equity.

The program’s executive director, Gretchen Cook-Anderson, holds information sessions in Boston area high schools to “demystify the industry” by describing its goals and practices in understandable terms for students from communities that may be geographically close to Kendall Square but have little interaction with biotech.

She’s also expanded Ignite’s competitive “golden ticket” program, which awarded a year of free lab space and resident privileges to eight new life sciences startups this year, including four led by women and four by entrepreneurs of color. Many, like Pham, are first-time founders.

“We essentially give them a bear hug,” Cook-Anderson said, by providing access not only to lab equipment, such as imaging platforms and centrifuges, but to serial biotech entrepreneurs in residence.

Alan Crane, an entrepreneur partner at venture firm Polaris Partners, has helped to start 10 biotech companies during his career, launching the last seven at LabCentral. He’s now building a new startup there, Zag Bio, focusing on autoimmune diseases, but takes time out to offer advice and feedback to younger entrepreneurs in the shared lab space.

“People helped us when we were earlier in our careers, and we pay it forward,” Crane said. “I spend a lot of time every week talking to young entrepreneurs and trying to help out. We’re all in this business ultimately to help patients. And if we can help entrepreneurs do a better job of advancing the science, that’s going to help patients.”

Robert Weisman can be reached at robert.weisman@globe.com.