Though it is less than two years old, Unchained Labs ("Company') has been quickly garnering attention within the life sciences tools space.
The Pleasanton-based Company manufactures tools used by biologics researchers to more efficiently handle key processes such as protein stability testing, aggregation prediction, sizing, and formulation preparation. Founded in 2015, the Company has raised $56MM of funding from three of the industry's leading venture capital investors: Canaan Partners, Novo Ventures, and TPG Biotech. Unchained Labs utilizes a platform strategy, acquiring a portfolio of innovative technologies and leveraging their industry expertise as well as its manufacturing and sales infrastructure to bring the products to market more efficiently. In less than two years, it has acquired four companies. Unchained Labs has an installed base of over 340 systems, and its products are in nearly every major biopharmaceutical company across the world.
With all that Unchained Labs has accomplished, it is hard to imagine that it was founded just two years ago. In reality, the seeds of the Company's success were planted over several decades. During this time, Unchained Labs’ product focus, business model, and leadership team gradually came together, led by its founder, Tim Harkness. With a background in accounting and investment banking (within the healthcare industry), Tim's corporate career began in 1998 when he became CFO of Molecular Devices, a publicly traded life sciences tools company. While at Molecular Devices, Tim recruited Jason Novi (currently CFO and COO at Unchained Labs), and the two would end up working closely together for much of the next 15 years. The team in place helped Molecular Devices grow revenues over five times before selling itself to a private buyer. After evaluating several potential paths, Tim became the CEO of Protein Simple, using a platform strategy to acquire a portfolio of subscale protein tools ranging from immunoassay systems to testing equipment used to determine protein structure and purity. After growing revenues to $50MM, Protein Simple sold itself to Bio-Techne in 2014 for $300MM.
Jason and Tim have adopted a similar acquisitions-based strategy at Unchained Labs. Tim describes the life science tools industry as barbell-shaped: a few industry giants inhabit one end, numerous smaller players occupy the other, and little exists between. The larger players benefit from scale, low cost of capital, and in-place infrastructure for distribution; however their size limits growth and innovation. The smaller players are innovative, but their size and relatively high cost of capital hampers their ability to effectively distribute their product or re-invest in ongoing development. Unchained Labs bridges the gap by assembling single ideas into a coherent suite of products, and by leveraging the company's operational expertise, capital resources and infrastructure to bring these technologies to market.
The dynamics of the biopharmaceutical industry make Unchained Labs' value proposition all the more compelling. Biopharmaceutical developers have a limited timeframe in which to monetize their product before patents expire; marginal productivity gains from better tools help minimize break-even costs while maximizing time in the market. Recent political attention towards drug pricing underscores the importance of cost-saving productivity enhancements. Unchained Labs' various tools help biopharmaceutical companies address these concerns by making the development process more efficient. For example, one of its stability testing devices, UNCLE, significantly reduces the resources required for protein stability testing, making the process faster and less cumbersome. Existing solutions rely on one-off tests that aren't purpose-specific; UNCLE uses three measurement modes to conduct full-spectrum tests on a single sample. Its purpose-built software automates setup, output, and reporting. Although Unchained Labs has products at all major biopharmaceutical companies, Tim believes the market is underpenetrated and that there is plenty of room to sell additional products within the Company’s existing user base.
The Tri-Valley Connection
Unchained Labs has become a landmark in Pleasanton, where it has a 50,000 SF corporate headquarters and employs over 75. Although Unchained Labs has sales offices all over the world, it conducts all of its key operations and manufacturing in Pleasanton. In November 2016, Unchained Labs was recognized for its impact on the local economy as well as its innovative products when it won the 2016 Economic Driver Award from the Pleasanton Chamber and City of Pleasanton.
According to Tim, Pleasanton was an easy choice. He and his wife moved to the area over ten years ago for the community, quality of life, and relative affordability. When determining where to locate his company, Pleasanton was an obvious consideration, and he soon realized that the very same reasons that attracted him to the community make it ideal for recruiting. There is no shortage of local industry talent who are happy to avoid commuting while continuing to enjoy the lower cost of living and enhanced quality of life that the Tri-Valley offers. Meanwhile, those living further away generally benefit from a reverse commute. “When people do the math and look at it,” Tim says, “it’s very easy to get them to come over here.”
Unchained Labs’ established management team, compelling value proposition, and strong competitive advantage make it yet another exciting company that calls Pleasanton home. We look forward to tracking its continued success over the following years.