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High-tech’s hand-me-downs

Carolyn Y. Johnson

In a laboratory at Marine Industrial Park in Boston, a wall of stickers reads like an impromptu scorecard of the incessant churn of biotechnology companies.

Peeled from equipment now in use at the start-up Ginkgo Bioworks, the 10 labels bear the names of companies that no longer exist, changed names, were swallowed by bigger companies, or shifted their focus.

Now, their discarded equipment - the incubators, robotic liquid handlers, and centrifuges that used to be working on the next big thing - is being repurposed for the next, next big thing.

It turns out the home of one of the world’s biggest biotechnology hubs is also one of the greatest stores of high-tech hand-me-downs. It’s well known that the region’s universities and brainpower, and the flow of millions of dollars of investments, foster the vibrant life sciences community. But so do its failures.

“Cannibalism is rife within the biotech industry!’’ Barry Canton, a cofounder of Ginkgo Bioworks, wrote in an e-mail. His company has acquired an estimated $600,000 worth of recycled equipment - for about a 90 percent discount.

The lab benches are from Codon Devices, a prominent start-up that raised at least $31 million before closing last year. A lab refrigerator came from Epitome Biosystems, a venture-backed start-up in Waltham that shut its doors after selling its technology to another company.

Other castoffs came from online auctioneers who sell off companies’ assets, universities getting rid of old equipment, and even eBay.

“It’s a very common model,’’ said Nate Tedford, an instructor at MIT who once worked at Epitome, where he watched other start-ups in his building close or move on. “It was just incredible - you’d go pay your respects to the people, say, ‘Hey, how are you doing; what are you doing next?’ ’’ he recalled. Then, practically in the next breath, scientists would be laying claim to the soon-to-be leftovers. “It was like a total yard sale.’’

Cambridge Scientific, an equipment reseller, has outlasted many of its clients over the past 13 years. Unlike biotechnology companies, which can take years to turn a profit - if they ever do - the resale business has been steady, with about $3.9 million in sales expected this year, said operations manager Richard Epstein.

When the economy is sizzling, new, expanding companies come calling. But the allure of marked-down used equipment may be even greater in a down economy, and supply goes up as companies downsize or fail, he said.

“We sell to start-ups constantly - they love us because they can basically outfit two labs for the price of one. . . . But nowadays we sell to a lot of local hospitals, we sell to big companies,’’ Epstein said. “Any lab manager trying to stretch their dollars would look to us as an alternative.’’

On a recent day, two customers from India browsed the warehouse, looking for equipment for a vaccine manufacturing facility. There is a microscope and balance room, another room for high-end devices, and aisle upon aisle of everyday lab equipment - “things that get hot, things that get cold, and things that spin,’’ said the president, Barbara Pearlman.

Equipment sells for around half price. Microscopes range from $500 to $20,000, depending on the model, and a gleaming, high-end device used to analyze large molecules would sell for about $130,000.

There are no price stickers on the equipment, in part, said Epstein, because “we are open to offers - not to sound too much like a used car dealer.’’

Companies typically acquire used equipment through a number of channels, said Michael Raab, a cofounder of Agrivida, a Medford company that is developing crop varieties better suited for biofuel production. Overall, Raab said, his 35-person company has probably paid about 50 percent of the list price for its equipment by making smart choices about what to buy new, and what to buy from resellers and auctions - as well as by knowing when a company is about to go belly-up.

“Usually, we keep an eye out for companies where we know people who are working and they’re saying, ‘Geez, it’s not looking good,’ ’’ Raab said. “We’re just opportunistic about it.’’

For David Preminger, a mechanical engineer who has become a dealer for biotechnology and semiconductor equipment, working with failed biotechs is less heartbreaking than working with semiconductor companies.

“You don’t hear people say, ‘My life is wrecked,’ ’’ Preminger said, noting there are so many new ventures and companies they can work for. “It’s easier emotionally, because it’s not fun to be a grave hunter.’’

He said his business has continued growing, despite the economic downturn, and that he is seeing signs of life, as new companies are beginning to call, anticipating getting funding in the first quarter of this year.

At Ginkgo Bioworks, Canton jokingly pointed out his company’s equipment tag is plain white, with a small barcode, and the company name spelled out in plain lettering. It is less flashy than the colorful metallic stickers the scientists have pried off some of their used equipment.

“So if anything bad happens,’’ Canton said, “it won’t look like we have spent a lot on fancy tags.’’

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