The Silicon Valley startups aiming to build Amazon for biotech R&D

When Y Combinator expanded into biotech, the startup incubator was effectively betting on the idea that IT has narrowed the gap between timelines and economics in life sciences and tech. The theory is partly based on the emergence of an ecosystem of IT-enabled research labs in Silicon Valley, each of which plans to upend traditional biotech R&D by borrowing ideas and tools from their tech peers.

The Wall Street Journal is the latest publication to profile the scene, picking out a batch of companies with similar models and ambitions to those featured by TechCrunch and FierceBiotechIT earlier this year. Cloud computing, automation and tech VC dollars underpin many of the startups, which are a possible precursor to a more flexible, virtual biotech R&D landscape with significantly lower barriers to entry. The goal is to reshape biotech startup economics like Amazon Web Services did for tech, a shift that allowed the likes of Dropbox to get started without heavy investment and scale rapidly.

Anyone with a credit card, an idea and an Amazon ($AMZN) account can start a tech company. The startups that sit at the nexus of biotech and Silicon Valley see the same being true of life sciences. "Anyone with a credit card and an internet connection will be able to go and run experiments," D.J. Kleinbaum, co-founder and co-CEO of Emerald Therapeutics, told the WSJ. Emerald Therapeutics runs a highly automated lab underpinned by a software program that controls the equipment and measures multiple parameters. The startup plans to start doing experiments for $5 to $25 per sample.

Companies could simply order their tests online, ship the sample and wait for the results. Similar forms of outsourcing already exist, but biotechs typically have a more personal relationship with their service providers. Trust will be an issue for the startups, as it was in the early days of internet shopping, but the low cost lessens risk. At $5 to $25 a sample, biotechs could afford to try a service, double-check the data and only use the provider again if it delivered solid results.

- read the WSJ feature (sub. req.)

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