A Conversation with SmartLab’s CEO Amrit Chaudhuri

Credit: Copper Hound

Amrit Chaudhuri is the chief executive officer and co-founder of SmartLabs, a flexible research lab infrastructure model that allows for varied and multiple biotech and pharmaceutical companies to use research lab space simultaneously, or in succession. Lab Design spoke to Amrit about the launch of SmartLabs.

LDN: Could you please start by introducing yourself?

AC: I'm Amrit Chaudhuri, the CEO of SmartLabs. I'm one of the co-founders. I'm a synthetic putting chemist and a bio engineer by training.

I've actually built and run as both the head of research and CEO of an external drug research company, so kind of like a hybrid between a CDMO, a CRO, and an external partner organization for pharma companies and universities working on peptide-based drug development in the late 2000s and 2010s.

I also built a biothermatics company and sold that in the 2010s before starting the SmartLabs in 2014 and launching it in January 2015.

So [I am] somebody from the industry side, the research side, and prior to now, working on the infrastructure side of the industry.

LDN: How did the idea of SmartLabs come about? 

AC: The basic premise behind SmartLabs originally was to do one thing and has evolved very rapidly into something completely different. My co-founder and I both were working in the industry on the business side and the research side primarily.

What we recognized in 2014 was that the industry was about to go through a massive shift. We were hearing from pharma companies, and from the board side, heads of R&D side, that all of a sudden [there was] anxiety around the future of drug development. We were trying to figure out why that was happening, and what we realized was that this industry had just finished a really large macro-global change.

This industry was the same thing for 100-something years. It was a small market chemistry-focused industry, everybody was a drug company was [also] basically a chemistry company. That had developed from the 1800s, in some cases, from the 1600s, all the way to the 1980s.

When biotech really blew up and became its own category and the industry went from a one-modality to a two-modality industry of science, everybody had to change to suddenly become competent and not just chemistry, but now enzymes, proteins, and antibodies, as an entirely new way of fighting disease and treating patients.

That shift, the biotech industry blooming in the 80s, 90s, 2000s, and today, I don't think people realize how big a shift that was. We're talking about a multi-100 billion dollar infrastructure shift in the industry, new buildings, new cities, new regions, millions of square feet, individual organizations shifting millions of square feet, Takeda becoming a US-focused R&D organization, being Japanese pharma company, Novartis, moving most of R&D in the United States from Switzerland, [lots of] macro changes happening.

In 2014 what we realized was that we had just finished that transition of creating new resources for the industry, and the industry was about to start its next life cycle of evolution. It was going to go from a two-modality industry to a 20-modality industry in the next 15 years, that had just finished going from one to 230 years to do that.

We said, ‘well, it'd be insane to go and build another billion square feet of labs right now. Maybe this is the moment in time to introduce an entirely new model that we see happening elsewhere.’

The infrastructure of pharma is still designed around end users either building from the ground up or leasing an empty building and then building themselves laboratories that they run that they're taking 10-year/15-year indefinite liability for projects that really are two years, three or four years long. You don't really know where your science is going; whether that's going [to] explode and do really well or it's going [to] explode and burn to the ground. But you're having to build static infrastructure for each project; a project by project science, by science type by type. 

So our original business idea was to create fractionalized access to the full gamut or resources you need to develop commercial drugs, especially around these new types of drugs: gene editing, mRNA, cell therapies, etc. The industry, whether you're a startup or a midsize, or a large company, needed new resources to go and address the future of science. 

We found out really rapidly that that business model did not work, and we found that out because of trying it. We went and launched 124,000 square feet of funnel labs in Kendall Square, and we were having a really hard time making the basic economics work. What we realized was that, unlike those other industries that we gave as an example, our industry has a uniquely much more difficult challenge space. The definition of a laboratory is actually a really broad category, not a product. 

We realized that problem space was actually one of the most limiting things at scale for this industry. The fact that not only are there 1000s of types of labs, organizations have to determine the type, the capacity, where they're going to put and commit huge amounts, billions of dollars of commitments to those plans that are supposed to be 20 year commitments and 20 year investments for science that's going to change in two years, and that is constantly changing. Every time they have to go and build a new resource, it takes five years to build that resource, and that was actually one of the biggest broken parts of this industry. It's not just the ability to get new talent and find new drugs. This industry has the worst way of addressing infrastructure of any industry in the world. We basically restructured the company and build SmartLabs over again, that's the problem space. 

We wanted to modernize and basically create a universal infrastructure set for all of science, and that's what we built a company around.

LDN: How does the architectural design of the space help support your operating model?

AC: We have an entirely different way of designing and building space than any other organization in the world, we have an in-house competency of design and development that doesn't exist anywhere else. We have managed and run 1000s of operational workflows, across every modality, every stage, and every product therapeutic category of science to date, we've been doing this for eight years, 1000s and 1000s of projects across 10,000 researchers, and then we have all the data behind it. 

We build labs effectively today, using a combination of computational and prefabrication and warehouse automation to go and actually build individual physical components, we build them like Legos. So when we think about designing architecturally like I could take a 30,000 square foot completely open space and make it 100 different rooms of 100 different shapes, made of totally different materials, stainless steel, glass, Teflon, whatever you want as the material choice of the physical space and then we can run all the engineering and utility systems computationally as if the building is a robot. 

LDN: How will the design help reduce costs for biopharma companies? It had been mentioned that it would be reduced from 150 million to about five to 10 million, how would that be executed? 

AC: It's a combination of the design [and] the business model it's actually really akin to the same thing as a data center.

For companies in cell therapies today that are phase one or phase two, really phase one, in an entirely new area of gene editing, cell therapy, mRNA, something that's non-traditional, those organizations today basically have to build and custom design a full manufacturing facility: the labs, the warehousing, the offices, the data, the loading docks, the clean rooms, and all of that. 

That investment on average in this industry right now for a Series B/Series C Company has proven to be somewhere between 120 and $200 million of CapEx purchasing the land and/or taking a lease on a building; building out that environment with all of the generators and HVAC and everything else you're putting in. Then it takes you two and a half to three years to bring that up and running. Your first year of production is not like year two, year three, or year four, so you're doing one year of production out of the first four years of owning it and building it, and you're goning to burn through $200 million dollars in that time period.

Because of the way we design, build, and operate the space, the exact same footprint to accommodate the clean rooms, the labs, the workflows, to do your phase one process, we can enable you in like a subscription model, the same way that you enable AWS in the cloud, and get server access like Amazon for five to $10 million annual subscription.

I'm carrying that $200 million investment over 20 years as an amortized cost and you don't have to take the entire facility, you're taking a fraction of that facility because ,turns out, you don't need all of it to run your phase one or phase two production. 

What we're able to do is create fractional access to this traditionally long-term infrastructure investment you're making that companies are having to make that point of your investment for project number one that has a 70% chance of failing and immediately spend all that upfront capital. 

LDN: If I was a potential tenant, and I wanted to use one of the facilities or use the space, what would my experience be like?

AC: We have a company that is doing one kind of experiment, and we have companies doing an entire full micro pharma company, everything from discovery through development through animal research through manufacturing, all of it under Smart Lab.

What we've now done is we've created the resource set to do the full value chain of the drug development. Whether you have an identified experimental process or production requirement or animal research study you come to us and you say, ‘hey, I want to do X,Y, and Z, I want to be in this region, I want to be in Cambridge or Boston, I want to be in San Francisco, whatever this is.’ [You can say] two months from now you want to go and start an entire pharmaceutical program and you tell us the kind of workflows you need, the kind of science you're doing, and the scale of that, the capacity and scale of that, and you might not even know that yourself if you're like, ‘hey, I have 20 people, this is the kind of equipment I need, this is the kind of workflow I'm looking for, this is the volume of throughput I'm looking for,’ we can actually calculate how much you need capacity wise because we have the experience in doing that. 

Then you basically sign up for a license agreement the same way that you sign up for Amazon, and once you negotiate that license, and you say, I want it for a year or two years, or five years, whatever that length is, we don't really care, what we'll do is come back to the package and say, we can build you [what you need] and this is what it’s gonna look like,  this is laying out your lab and laying out all of your equipment and laying out where everyone's sitting and how all that works [and]  how that space operates.

All the departments you normally have an MIT or Pfizer everything from individual scientific training to waste management through chemical inventories, through bioinformatics through data. We lay out that operating plan, we lay out the physical environment, and then you make a license contract with us. That takes about, you know, two weeks, three weeks to actually get that license contract done. 

LDN: What amenities are available?

AC: Food programs, an entire managed data center; we have an entire on-premise data center group, we run a fully redundant power-backed up, fiber backed, cooling backed data center. In every one of these sites you can have on premise multi petabyte data storage for your experiments and your production. 

We [also] have cores so think of like instrumentation coures. So we have revived repository microscopy core, we have advanced microbiology core.

The ability to flex into resources, whether it's as simple as a conference room, as complex as a full bi-varian surgical suite, like an animal surgical suite, we have PET scans, MRIs, 3d X-Ray irradiation of animals, we have an entire radiation center and our animal research sites, we run a veterinary hospital as part of this program, to be able to go and support everything from a cancer study to an efficacy study to toxicology study we're basically building an open source pharma company that you were able to just literally slot into.

LDN: Do you see any foreseeable limitations with this kind of model?

AC: We have been able to accommodate what we believe is 95% of science to date. A typical lab being built for a singular purpose, like a mono purpose lab, can accommodate about three percent.  The infrastructure we build is the most dynamic and broadly applicable infrastructure in the world for laboratories.

If I build a chemistry lab today, even that chemistry lab can't do all kinds of chemistry, right? If I'm using hydrochloric acid work, if I'm doing large scale synthesis and large vessels, if I need to walk in fume hoods, whatnot, like chemistry labs, not even a chemistry lab, there are 100 different types of chemistry labs you need, we are able to accommodate such a range of that science and demonstrate it. 

LDN: You had mentioned that a lot of the infrastructure would be recycled. How will sustainability inform the design?

AC: Today biotech companies and pharma companies are some of the most wasteful organizations when it comes to the utilization of space and utilities. Pharma companies have a habit of building a million-square-foot campus, having this 200,000-square-foot building doing X, Y, & Z science, suddenly changing the science they want to do, and physically demolishing the building and rebuilding all the labs inside of it. 

We've basically completely gotten rid of that. When we now build we can take all the investments and construction we've made, and they're now able to accommodate 1000 projects, not one. The utilization and reuse that we've taken spaces and brought it from mRNA to CRISPR/Cas9, to yeast biology, to bacterial cell culture back to chemistry in three years, which would have been either building more labs for each of those functions or demoing and building labs all of which is wasteful.

You don't need more capacity, you just need a different capacity. What we have [is] universal capacity. That, just as a mechanism, changes the way you think about not just the economics, but the waste that goes into the way we construct and build these spaces. We’re probably one of the most utilized footprints of laboratories in the world.