Biotech blooms on Santa Cruz’s westside

The Westside Research Park, the new name for buildings at 2300 Delaware Ave., is home to a growing number of laboratories as well as the Genomics Institute

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The Genomics Institute, based out of the Baskin School of Engineering, recently moved from its campus offices to the Westside Research Park at 2300 Delaware Ave. (Photo by Steve Kurtz)
Lou Pambianco
New state funding provided to the University of California helped to create Startup Sandbox in 2017. Led by President Lou Pambianco, it has proven to be a crucial component of Santa Cruz’s bio boom. Startup Sandbox provides wet and dry laboratory space on demand, as well as office space and training seminars for companies. (Photo by James McGirk)

Just beyond the strange, wonderful tidepools of Natural Bridges State Beach, another biological bonanza is taking shape. The westside of Santa Cruz, once home to factories producing gum, tea, and computer chips, is transforming into a biotechnology hub.

Some of the latest startups, powered by the research strength of UC Santa Cruz, are focused on cracking some of the world’s most difficult problems—figuring out a better way to pack products for shipment across the world, creating new ways to fight infection to reduce the use of antibiotics, and developing innovative drugs to help combat cancer.

Driving along the westside, the transformation can be seen in by the appearance of sleek electric vehicles parked around old warehouses and the sudden blossoming of chic coffee houses, high-end breweries and a New Leaf grocery store. Lycra-clad joggers get in some miles during their lunch breaks.

The biotech boom is the culmination of all the pieces falling into place—brilliant and driven graduate alumni and faculty members who are eager to make people’s lives better, vacant buildings in need of a new purpose, and a university partnering with the community to foster entrepreneurs.

“We’re delighted to see the benefits of entrepreneurship and innovation, and the impact this has on an area so close to home,” Baskin School of Engineering Dean Alexander Wolf said. “What’s happening is a virtuous cycle: Our researchers and graduates see their peers building successful companies — companies that also benefit the community — and they’re inspired to build their own.”

Cruz Foam is developing sustainable, biodegradable foam to help end plastic pollution. Founded by Marco Rolandi, associate professor of electrical and computer engineering, researcher Xiaolin Zhang, and John Felts, who studied electrical engineering as a UC Santa Cruz graduate student, the company got its start in building a better surfboard—one that didn’t rely on plastics.

“We’ve now shifted attention to the packaging market for market size and impact,” Rolandi said. “After all, we can substitute every surfboard in the world with our material and it’ll have some impact—but not as much as if we were to replace all the plastic packing material in the world.”

The startup is creating biodegradable packaging from chitin, which is the second-most abundant protein in the world and can be found in shrimp and lobster shells. It’s lighter, cheaper, and more environmentally friendly than polystyrene, which is commonly used today, said Felt.

Cruz Foam is just one of the many success stories coming out of Startup Sandbox, a biotech accelerator on Natural Bridges Drive that provides the support needed to transform some of the groundbreaking work coming out of UC Santa Cruz labs into market-ready products.

“There were three options: renting a warehouse for $10,000 a month, working in the cramped Sinsheimer Labs on campus, or Startup Sandbox,” Felts said. “[Startup Sandbox] leased us about 500 square feet we could use to develop our technology. Without that intermediate space we might have foundered.”

Cruz Foam recently outgrew the laboratory and office space it rented from Startup Sandbox. The company is now in Soquel, in a 1,500 square-foot warehouse.

New state funding provided to the University of California helped to create the incubator in 2017. It has proven to be a crucial component of Santa Cruz’s bio boom. Startup Sandbox provides wet and dry laboratory space on demand, as well as office space and training seminars for companies.

“A fume hood, for example, rents for $25 an hour at Startup Sandbox,” Startup Sandbox President Lou Pambianco said. “To purchase, install, and run a hood would cost a fledgling company thousands of dollars.”

One of the current tenants, Unnatural Products, began in a founder’s garage, the origin story for many startups. However, the group soon learned they could not manufacture anything involving chemicals or biological agents in a residential area and were forced to rent lab space.

Unnatural Products moved to Startup Sandbox, and began renting a lab bench for $40 an hour.

The startup was founded by Cameron Pye and Joshua Schwochert, who both earned their Ph.D.s in chemistry from UC Santa Cruz. Among their first projects to launch is a cancer-fighting compound that earlier versions of couldn’t punch through the cell’s membrane. “We’re drugging the undruggable,” Pye explained. “What we do is design some of the rule-breaking properties that nature created into synthetic systems, which in turn allows us to design drugs against this intra-cellular undruggable space that has been off-limits up to date.”

Unnatural Products has been getting the attention of investors. It recently raised $6.25 million, which helped let them move down the street from Startup Sandbox and expand operations.

The Delaware corridor used to be home to industrial giants like Lipton Tea, Wrigley’s Gum, and Texas Instruments. But by the turn of the century, spiking energy prices, rising rents, high taxes, and the first tech bust in the late 90s forced many manufacturers to abandon the area.

“When we started losing some of the manufacturing, we had to think about what industries would be able to thrive in the new economy,” said Bonnie Lipscomb, the City of Santa Cruz’s executive director for economic development.

The city saw that the work of David Haussler and his lab—which in 2000 published the first working draft of the human genome on the internet—could help support a new economy and create startups and spinoffs.

“Since then we’ve been doing everything we can to ensure the infrastructure to support them exists here and we’re doing everything we can to help them grow,” Lipscomb said.

The Genomics Institute, led by Haussler and based out of the Baskin School of Engineering, recently moved from its campus offices to the Westside Research Park at 2300 Delaware Ave. The university bought the former Texas Instruments silicon chip fabrication facility in 2004 and has been renovating the space to provide new lab space for researchers.

“We’ve had a vision for a vibrant biotech scene just down the road from campus for a while now,” said Ann Pace, director of research development and finance at the Genomics Institute. “We develop a lot of cutting edge technology, and it makes sense to have companies nearby to facilitate interaction between budding industries and academia.”

“The Genomics Institute sits at a really interesting space between engineering and clinical work,” said Dean Wolf. “And physically, it acts as a sort of anchor for the startup environment along the Delaware Avenue corridor, which is why moving the Institute to this location, near campus and the Baskin School of Engineering, was so important.”

In addition to the recent burst of activity supported by the incubators, the Westside has been ground zero for other biotech startups that are advancing technology developed at UC Santa Cruz. The co-founders of Ontera (formerly Two Pore Guys), on Delaware Avenue, met at UC Santa Cruz in 2010 and a year later started the company, which makes a digital, hand-held testing platform that detects viruses, bacteria, antibodies, and other biological molecules.

Claret Bioscience, a spinoff from the labs of Professors Ed Green and Beth Shapiro that was also supported by Startup Sandbox, is developing faster and more efficient ways for labs to prepare fragmented DNA for sequencing.

Claret Bioscience, Unnatural Products, and CruzFoam are among the first six companies to graduate from Startup Sandbox.

Felts says that Santa Cruz feels considerably different than it did even a few years ago.

“We’re beginning to feel the effects of having all these biotech startups popping up around here, there’s a network coming together,” Felts said. “I’m really excited to see what will happen.”