As DuPont pulls out, old labs seek new start-ups

As DuPont Co. has scaled back after disappointing returns from research and development, small college-linked efforts to back science start-ups have taken root at a couple of the company's former labs.

Last year, the University of Pennsylvania opened Pennovation Works at DuPont's former Marshall Labs on Grays Ferry Avenue in Philadelphia. It gives private industry a place to cohabit with engineering scholars developing service robots for Hershey, hand-sized drones for Qualcomm, and Internet of Things controls for Comcast, while harboring dozens of hopeful upstarts.

Last week the State of Delaware agreed to kick in $5 million, and the University of Delaware $1.5 million, to help a new nonprofit, Delaware Innovation Space Inc., turn Building 500, at the north end of DuPont's underused Experimental Station campus outside Wilmington, into a start-up incubator. DuPont is donating the building, technical and management help, and $1.5 million.

A state projects committee gave the project unanimous approval Monday, the latest example of state aid for the highly profitable company: Last year the legislature granted DuPont and its merger partner, Dow Chemical Co., more than $30 million in annual tax breaks, in hopes of keeping their planned pesticide and specialty-materials spin-off companies from moving away.

The stakes for the state are high: Gov. John Carney and Wilmington Mayor Mike Purzycki hope to rely on small biotech, engineering software, and financial-technology firms to replace DuPont and other manufacturing and banking companies that have laid off thousands, consolidated offices, or left the state in recent years.

DuPont and the drug developer Incyte will be initial tenants at Building 500, a 1990s-era, 92,000-square-foot leftover from the company's abortive pharma partnership with Merck, "to help defray the costs," says Bill Provine, former DuPont global director of science and engineering who runs Delaware Innovation Space at the site. His group will also have access to labs on a floor at next-door Building 400, where the Nemours Foundation, which owns the nearby A.I. du Pont Children's Hospital, is a tenant.

Provine sees a model in JLABS, the start-up centers that the drug and medical-device giant Johnson & Johnson opened at its sites in San Francisco, San Diego, and Cambridge, Mass.

The space hasn't posted prices yet. At Pennovation, Penn is leasing 33 research "benches" to individual researchers at $1,000 a month, and preparing more, said spokeswoman Laurie Actman.

That's about the same that University City Science Center charges for its 30 incubator spaces, which "are full up right now" but tend to turn over as firms move on every year or so, said vice president Chris Liang. (The center also charges $10,000 a month, with equipment, shared receptionist and Internet included, for "full turnkey" labs accommodating up to 10 researchers.)

"In this environment, where innovation is key, I'd like to see more lab space," says broker Paul Touhey, who leases lab, office, and industrial space for CBRE. He expects growing Philadelphia biotech firms will increasingly demand larger production spaces in the suburbs.

DuPont research used to be a walled fortress, not a motel. In the mid-1900s, "every few years DuPont introduced a new blockbuster product: Nylon, Teflon, Tyvek, Kevlar, Lycra, Neoprene, and Mylar. But over several decades that drumbeat slowed to a trickle," Ben du Pont, a former company executive and founders' heir, told me last year.

There is, some scientists claim, a certain magic to successful industrial research. "Kevlar, Tyvek, Nomex, Lycra," and other materials were developed, not by DuPont's central research unit, but in textile-factory labs led by an "uncanny" director, Hale Charch, Philadelphia research scientist Peter R. Lantos told me last year. "After his death, that lab produced not one single new product."

By the early 2000s, "our urban legend was that DuPont was a slick, well-bred racehorse ridden by a 500-pound jockey called Management," a former Experimental Station scientist told me over beers at a bar north of town. He cited DuPont projects that dragged on for years -- oil-eating microbes, catnip-based bug repellent, an innovative nylon-fabrics plant  -- that top managers couldn't decide whether to commercialize or kill.

Delaware Innovation isn't the state's first attempt to give a public boost to private research. Firms at the 350,000-square-foot Delaware Technology Park near the University of Delaware in Newark -- plus its new 10,000-square-foot wet-labs extension at UD's former Chrysler plant site -- host scores of firms employing around 1,000, says director Michael Bowman. He says many have moved offsite as their firms grew.

"It delights people in Delaware" to see DuPont trying to use old labs and intellectual property to lure new firms, Bowman told me. "They have empty real estate, as we all know," after pulling out of more than two million square feet of offices in downtown Wilmington in recent years and laying off 1,700 professionals and support staff last year.

The technology park charges about $60 a square foot per year, which works out to around $1,250 a month for a lone researcher's lab and office.

"Technology can do well here," Bowman told me. He sees Philadelphia and Washington as "natural markets" for Delaware's lab landlords. With an initial push from state funding, "we are self-sustaining. Like the Science Center, or the labs at the Navy Yard" in Philadelphia, he added.