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06

$500M project planned for former Upper Merion GSK campus

June 6, 2019

Source, Philadelphia Business Journal, Natalie Kostelni and John George

A year after buying a GlaxoSmithKline research facility in Upper Merion, an affiliate of MLP Ventures will seek to reposition that space as well as a neighboring office park into a $500 million, 1.6-million-square-foot coworking campus called the Discovery Labs that will cater to health care, life science and pharmaceutical companies.

The former GSK property off Swedeland Road will be the first of what is expected to be a series of other similar coworking projects. MLP Ventures plans to buy other unwanted lab and research facilities pharmaceutical companies are jettisoning and brand them as Discovery Labs. The company has six other facilities either under agreement or in negotiations. They are located in New York, Boston, San Francisco, Dublin and London.

“The former GlaxoSmithKline facility is the prototype size and location,” said Richard Heany, president of Discovery Labs. “We looked at the WeWork model and think what they accomplished is a great thing but our facilities are about 20 times the size and with the infrastructure that allows us to bring larger enterprises and startups. We are trying to put the life back into the life sciences.”

Demand for this type of specialized space is strong though limited in supply and expensive to create. As a result, Discovery Labs looks to fill a niche being met on a smaller scale by companies such as BioLabs, which provides coworking space for life science startups. BioLabs has space at the University City Science Center at 3675 Market St. in Philadelphia. While the Science Center is providing space for start ups, other facilities throughout the region catering to this market include Pennovation Works in Philadelphia and Spring House Innovation Park, which is at a former Rohm and Hass campus in Montgomery County.

“What makes us different is we are doing lab space on a large scale, which allows companies to grow in our space,” said Audrey Greenberg, CFO of Discovery Labs.

“There’s a surge of life science startups in Pennsylvania, with more than half of these companies staffing fewer than ten employees,” said Christopher Molineaux, CEO of Life Sciences Pennsylvania, in a statement. “The coworking lab facilities of Discovery Labs can help support the growth of small business with billions of dollars of infrastructure, so they can spend capital on development of new technologies and lifesaving and life enhancing products, making lab space affordable to startups of any size.”

To that end, MLP Ventures has partnered with Pennsylvania Biotechnology Center of Bucks County. The organization will occupy 100,000 square feet of the Discovery Labs and the space will be called IQ Connect. It will be a business incubator that will bring together researchers, entrepreneurs and startups with other resources such as venture capital, investment banking and other help with the goal of getting companies and products launched.

“The Pennsylvania Biotechnology Center has a strong track record of growing successful new companies through our unique combination of resources and professional support,” said Lou Kassa, COO of the biotechnology center. “We are excited to expand our model to the Discovery Labs to build an environment that nurtures entrepreneurs and brings new discoveries to market.”

The impact of the center has been significant since opening 12 years ago in a vacant warehouse just north of Doylestown in Bucks County. It is home to 50 organizations, most of which are for-profit life sciences companies involved in new drug and medical device development. The biotech center has created about 1,000 jobs. In its most recent financial impact report released in 2016, an independent research organization commissioned by the center, found it generated an economic impact of nearly $1.6 billion in direct and indirect spending for Bucks County between 2014 and 2016. In the past, Kassa has said the combined exit value of companies that have graduated from the center is $1.75 billion. Arbutus BioPharma in Warminster is one of the companies that was incubated in the center. The company is working on a potential cure for hepatitis B.

Discovery Labs is seeking to affiliated with other organizations similar to the biotechnology center and universities.

MLP Ventures is a company operated by J. Brian O’Neill, a real estate developer that also spearheads Recovery Centers of America. Last year, MLP Ventures bought the GSK campus and a portfolio of properties in the nearby Renaissance Corporate Center from Liberty Property Trust to create Discovery Labs.  Discovery Labs will include one million square feet of the former GSK campus and 640,000 square feet of space at a nearby office campus rebranded as Innovation at Renaissance. Some tenants at Innovation at Renaissance include Children’s Hospital of Philadelphia, Thomas Jefferson University, GlaxoSmithKline, Tosoh Biosciences, Crown Castle and MedRisk.

The GSK campus already has a cafe, fitness center, 275-seat auditorium, conference center and training rooms. Those amenities will be augmented by the adaptive reuse of some other buildings on the campus to include a hotel and other additions, said Joe Corcoran of MLP.

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