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Biotechnology / Jobs / Philadelphia / Startups

Why these biotech startups are facing a 550% rent hike

As the Science Center looks to shutter two of its spaces, 17 companies grapple with their options.

3711 Market is one of many University City Science Center properties. (Courtesy photo)
The way CEO Briana Wronko sees it, the University City Science Center and Boston-based Cambridge Innovation Center (CIC) are effectively kicking her and her company out.

Wronko’s Group K Diagnostics, currently based out of the Science Center’s lab space at 3624 Market St., is faced with three options come December when the nonprofit will shutter its lab spaces amid a shift in focus: Either move its operations to the suburbs, sign up for a long waiting list at the Pennovation Center, or swallow a 550 percent rent hike to move to the 3675 Market location, where the lab spaces will be run by Kendall Square, Mass.-based BioLabs. (BioLabs will manage the labs on behalf of CIC.)

According to documents provided by Wronko, moving into the 3675 Market development would be costly: Rent would go from $1,800 a month for a private lab to $10,000 a month inside BioLabs.

The company, Wronko said, is offering discounts to the 17 companies based out of both Science Center locations, but only for those that accept shared spaces. FDA protocols call for her company, makers of a point-of-care diagnostics platform, to have a private center of operations.

“We came to the Science Center and found a home there,” Wronko, a 21-year-old Penn grad, said. “I’ve been in Philly forever and didn’t want to leave. We were aware of the new building and we were told that rent would go up a little bit. We were initially told less than 200 percent but now we see it’s over 550 percent”

For CIC cofounder Dougan Sherwood, pitting the two prices against each other is not a viable comparison.

“Our models are so different,” Sherwood told Technical.ly. “We will be charging an all-inclusive per-person membership fee, which will include full access and privileges to all common amenities, including all of our scientific equipment, instrumentation, and services.”

Sherwood, who is based out of Cambridge, Mass., told Technical.ly that the company is currently looking at ways to facilitate the move for companies based out of the Science Center.

“We think we’re adding value into the market in a way very few organizations could and that’s because of our partnership with BioLabs,” Sherwood said.

Earlier this year, CEO Steve Tang stepped down form the 50-year-old West Philly nonprofit to join Bethlehem, Pa.-based OraSure Technologies. Last week, as part of its new focus, the Science Center launched a $3-million campaign to expand its programming offerings ahead of the relocation to 3675.

“Like the startups we support, we are constantly evolving our business model,” said Kristen Fitch, senior media relations manager at the Science Center.  “With CIC managing shared office and lab space in 3675 Market, the Science Center will be able to focus on what we do best, developing and delivering programming and support to help startups commercialize their technologies.”

Fitch told Technical.ly that the Science Center has been working with its resident companies one-on-one to help them understand their options and make the transition as smooth as possible.

“All of our startup incubator residents are at different stages and have different needs,” Fitch said. “We understand that some may decide not to move into CIC’s space at 3675 Market — and none are obligated to do so. Thankfully, there are more options in the region than there have been in the past.”

Technical.ly reached out to ten companies based out of either 3624 or 3711 Market St. Three declined to comment, two others did not immediately return voicemail messages and emails and one did not respond to emails sent. Wronko suggested more companies from the Science Center location feared “retaliation” from BioLabs. She also sent letters to local media outlets (like Technical.ly) and reached out to city officials and institutions like Ben Franklin Technology Partners to make them aware of the impact some startups are facing.

AUM Life Tech CEO Veenu Aishwarya, who takes up non-lab office space at 3711 Market, did respond to a call and said the was still grappling with the decision to move into 3675.

“I don’t know about the other companies, but for us it’s not the ideal, rent-wise,” Aishwarya said. “The Science Center has a fantastic place here and it’s sad that it’s shutting down.”

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