Date: Jan 26, 2014 Author: Matthew Flamm Source: Crain's New York Business (
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Brooklyn may soon be the headquarters of a futuristic startup that grows test-tube leather and in-vitro meat—biofabricated products that the company hopes will become part of the fashion and culinary scenes in New York.
Tissue-engineering pioneer Modern Meadow, which only sounds like it belongs in a sci-fi movie, is in negotiations to lease up to 10,000 square feet at the BioBAT facility at the Brooklyn Army Terminal. That's where it aims over the next year or two to begin producing leather that could be as thick as a boot sole or as thin and translucent as silk. Farther down the road will be beef and pork that even vegetarians could love.
"We grow genuine leather without having to kill animals or wreck the environment," Chief Executive Andras Forgacs said last week over a bowl of all-natural oatmeal in the meatpacking district. "And we can dial in certain performance and aesthetic qualities that are appealing to high fashion."
Building lab space
Mr. Forgacs, a Harvard grad and McKinsey alum, founded Modern Meadow in 2011 with his father, theoretical physicist turned bioengineer Gabor Forgacs. The company's move to New York—its lab is in Columbia, Mo., and its CEO in Palo Alto, Calif.—could represent a turning point for the city's effort to become a leader in biotechnology.
New York has long been where researchers started companies before moving them to Silicon Valley, Boston or San Diego—the top three areas for biotech venture-capital financing, and where there are plenty of experienced biotech executives and fully equipped lab space is cheap.
But in the past few years, the city and private groups have been focused on making New York a center for biotech just as it has become one for consumer tech. And those efforts have been speeding up in recent months.
In October, the city's Economic Development Corp. put out a request for proposals for an incubator to house graduates of the Harlem Biosphere , which opened in November and quickly filled with startups. And in December, the EDC announced a $100 million early-stage funding initiative—a crucial piece of the puzzle, since biotech startups take far longer than consumer tech startups to become viable.
SUNY Downstate Medical Center, which operates BioBAT, has expanded its lab space there by 85,000 square feet. By April, it will double the space at its nearby incubator.
And the just-completed second tower at the Alexandria Center for Life Science on the East River is more than 50% leased.
"In the last two years, we've seen a real sea change in New York," said Dennis Purcell, senior managing partner at Aisling Capital, a life-science-focused VC firm in Manhattan. "We used to be very splintered, but there's been a coalescing around the biotech industry like you see in Boston and San Diego."
The investment climate overall for the sector has improved lately, noted Greg Vlahos, a partner at PricewaterhouseCoopers who credits the high number of recent biotech IPOs. VC investment in biotech nationwide rose 8% in 2013, to $4.5 billion. New York did even better, with spending spiking 27%, to $327 million, putting the city in fifth place, behind Washington, D.C., according to The MoneyTree Report from PwC and the National Venture Capital Association.
Until recently, Mr. Forgacs was content to base Modern Meadow's lab at the University of Missouri while he courted investors and advisers in Silicon Valley (backers include PayPal founder Peter Thiel). But as the company got ready to roll out its products, he wanted to be near New York's fashion and restaurant scenes. Modern Meadow plans to tap into those industries to help develop and market its cultured leather and in-vitro meat (also called "shmeat," as in a sheet of meat, or as some might say in New York, with a roll of the eyes, "meat, shmeat").
"New York is the center of the fashion industry in the U.S., and one of the most exciting and creative food environments," Mr. Forgacs said. "We look forward to working with talent on both fronts."
Access to New Jersey's flavor and fragrance companies, as well as New York's biomedical research institutions, including scientists working on tissue engineering, also played a role in Modern Meadow's decision.
But first, the company needs tax breaks and a BioBAT lease, which would make the move economically feasible. Modern Meadow hopes to qualify for the new Start-Up NY tax relief program for companies that relocate here. Still, the shortage of low-cost, built-out lab space remains a big obstacle to growth.
"This is a deficit the city has to overcome," said Mr. Forgacs, whose negotiations with BioBAT revolve around a sublease of built-out space. "We can move in there in a matter of months. If it wasn't for this, we wouldn't be looking in New York."
Business leaders say that a healthy ecosystem will bring the development of more lab space.
"You want the industry to grow faster than the space," said Maria Gotsch, president of the Partnership Fund for New York City, which has helped foster the biotech sector. "That provides incentives for people to make investments."
Mr. Forgacs hopes to make it to New York by this summer. Already he's in talks with fashion and textile producers, and foresees varied uses for Modern Meadow's cultured leather, which is generated from harmless biopsies of living animals.
Production of cultured meat is a longer and more complicated process, involving Food and Drug Administration approval—and winning over skeptics of "Frankenburgers." Nonetheless, he expects within a few years to begin offering "tastings," and is working with chefs to introduce the company's products as a delicacy.
He would also like to embrace the urban environment and open up the lab to visitors. He could see it becoming "a leather and meat brewery" that would teach people about the science of in-vitro production and be the humane antithesis of a slaughterhouse.
"The Bay Area is a much more mature ecosystem when it comes to life science," Mr. Forgacs said. "But the potential for New York is much more exciting."
