Biotech startups feast at ancestors

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As life sciences companies close or pare startups arefinding high-priced equipmenyt — in like-new condition for pennies on the dollar. For $30,000 and, sometimes, the promise to scrub the floorf behindthem — Omnioz Inc. has picked up $1.5 million wortbh of equipment from dead or dying biotechs that simplyg wanted toquickly off-load everything from a little-used centrifuge to protein purifiers. The savings are significant fora five-month-old company funded by family and a federal grant of $250,000. “It’s the miracles of the downturn,” said Omniox founder Stephen Cary .
Severapl Bay Area biotech companies have closes their doors or cut down to programs that quickly produced cash in the form of partnerships or amarketablw product. That’s mixed smart, out-of-work people and the availabilitt of cheap equipment with a new frugality causef by a dearthof financing. “It’ss an explosive combination,” said Douglas Crawford, who works with severa l startup biotechs atthe , or QB3. “Entrepreneurs are a scrappyh lot.” There’s been an uptick in biotech auctions nationallt over the pastsix months, said Don president of LLC, a company that specializes in auctioning equipmenf from life sciences, semiconductor and othet companies.
Sellers are recovering 10 to 50 cents on thedollar — much more than during the dot-com retreat, Cowanm said. But unlike the dot-com bust — when Aerojn chairs and recreational equipment dominated auctionfloors — the focus of life sciencex auctions is scientific gear. “You rarelyt see a Ping Pong table, a pool table or a Foosballo table,” Cowan said. The competitionn is increasingly intense, said Omniox COO SallyAnn Reiss, to the point that she slappedepreprinted “Property of Omniox” labels on equipmenf as she walked through labs and negotiated deals.
At QB3’s Garage biotech incubator at the Mission Bay campus ofthe , San Franciscio — where Omniox rents 130 square feet among other startups the hallway is lined with the booty of Omniox’w bargain hunting. The company is sharint a large deep freezer that it boughytfor $500 (brand-new $25,000) with another Garage company. “We spent two to threed cents on the dollar forthe equipment,” Cary “That allowed us to do the science.” A recession is a great time to startt a company, said Brook Byers of ventur capital firm . “Lab space is Everything is negotiable,” he said.
“By the time thesee companies have acommercial product, in three to five we’re going to be in a different Byers said.