at startups, they tend to be more likely to both catch the entrepreneurial bug and gain the multitasking experience needed to run their own business. “Lacking significant funding, these new entrepreneurs start service businesses that require little or no initial capital outlay. Over time, this small effect becomes large enough to make a difference in the region and it becomes self perpetuating,” Lustig says.
Duane Roth, CEO of San Diego’s Connect, a local nonprofit group established to promote technology and entrepreneurship, sees the proliferation of life sciences CROs as evidence of another trend.
For many years now, Roth says, high-tech companies throughout the United States have been extolling the virtues of working in the Internet “cloud”—a metaphor for the abstract network of servers that host a multitude of online services, software, and data, among other things. Cloud computing enables companies that once built their own networks and hardware, for storing data and operating business applications, to avoid the enormous capital expenditure by renting computer resources from a third-party provider.
“The cloud is where all the data resides, and where the expertise now resides,” Roth says. “The high-tech guys have led the way, but you could argue that even greater savings can be realized by leveraging similar efficiencies in the life sciences sector.”
Instead of incurring the cost of building a laboratory and manufacturing facility to make a new drug compound, Roth says biotech startups nowadays can operate more efficiently—and save money—by turning to CROs, although Roth prefers to use the term “professional service providers,” or PSPs. But his central point remains: “What would have cost $10 million in the mid-1990s now costs $3 million because we go straight to the experts to get the data,” Roth says. In a recent post for the Xconomist Forum, Roth describes PSPs as a key part in an alternative method for supporting technology innovation, which he describes as the “distributed partnering model.”
As a result, Roth says, startups can assess at a much earlier stage whether their technology really can be commercialized—“and they don’t end up owning a vivarium.”
Petersen, who is Assay Depot’s chief information officer, says the map and following list of San Diego CROs “includes every organization that we reasonably think offers scientific services.” After compiling the list, Petersen said he manually excluded certain non-business organizations, such as UCSD. As for its completeness, Petersen says while Assay Depot has the world’s most comprehensive database of preclinical CROs, “you can never be sure you have ‘everyone.'” So let me know if you think your business should be on our list.
