There’s a basic formula these days for anyone looking to develop a cure for a disease. Along with a good idea, you need $20 million, a team of about 30 scientists, and a year to set up the lab equipment to start testing your theory. From there, the grunt work begins, as your team of well-paid researchers squirts fluid into test tubes, feeds chemicals into machines, and analyzes the results from thousands of experiments. If you luck out and discover something useful, then it’s time to pray that the desired result can be replicated.
Emerald Therapeutics, a 17-person startup in Silicon Valley, claims to have modernized much of this burdensome process, which might make drug discovery faster and cheaper. On July 1 the company unveiled a service that lets other labs send it instructions for their experiments via the Web. Robots then complete the work. The idea is a variation on the cloud-computing model, in which companies rent computers by the hour from Amazon.com (AMZN), Google (GOOG), and Microsoft (MSFT) instead of buying and managing their own equipment. In this case, biotech startups could offload some of their basic tasks—counting cells one at a time or isolating proteins—freeing their researchers to work on more complex jobs and analyze results. To control the myriad lab machines, Emerald has developed its own computer language and management software. The company is charging clients $1 to $100 per experiment and has vowed to return results within a day. “Emerald has brought laboratory experimentation into the digital age, allowing truly virtual scientific research,” says David Pompliano, a former executive with Merck (MRK) and GlaxoSmithKline (GSK) who is advising the company. “This will lead to better science.”
D.J. Kleinbaum and Brian Frezza, the company’s founders, grew up a couple houses apart on Emerald Drive in the suburbs of Philadelphia. Since grade school, they say, they’ve dreamed of starting a biotech business together, and both earned biology-focused undergraduate degrees at Carnegie Mellon University, living in the same dorm suite. The duo split up while pursuing doctorates in chemistry; Kleinbaum went to Stanford, Frezza to the Scripps Research Institute. By 2010, they had Ph.D.s in hand and began to develop their business.
Emerald’s original plan had nothing to do with selling lab services. Frezza had conceived of what he calls a breakthrough antiviral therapy for diseases such as hepatitis and HIV. In search of funding, he and Kleinbaum spent weeks hopping between cheap motels while they pitched Silicon Valley venture capitalists. “We had all our worldly possessions in our cars and relied on wireless connections at Starbucks and laundromats,” says Kleinbaum. “There would be these people walking behind us without shirts on at the Stanford Coin Wash while we had Skype meetings with investors.” Backers weren’t put off: Emerald raised its first few millions and moved a small team of researchers into an office previously occupied by lawyers. They tossed the cubicles and fake ficus trees and set up dozens of machines to perform tasks such as DNA synthesis, protein extraction, and virus preparation.
While pursuing the antiviral therapy, Emerald began developing tools to work faster. Each piece of lab equipment, made by companies including Agilent Technologies (A) and Thermo Fisher Scientific (TMO), had its own often-rudimentary software. Emerald’s solution was to write management software that centralized control of all the machines, with consistent ways to specify what type of experiment to run, what order to mix the chemicals in, how long to heat something, and so on. “There are about 100 knobs you can turn with the software,” says Frezza. Crucially, Emerald can store all the information the machines collect in a single database, where scientists can analyze it. This was a major advance over the still common practice of pasting printed reports into lab notebooks.
It soon became apparent to its founders that Emerald was developing a laboratory operating system that could itself become a business. In an unusual move, Kleinbaum and Frezza went back to their investors to sell them on the idea of expanding Emerald’s mission. The company would have three people continue to pursue the antiviral therapy and 14 work on developing the software and setting up a service that other labs could tap into. The investors bit. Emerald has now raised $13.5 million from the Peter Thiel-led Founders Fund, an early backer of Facebook (FB) and SpaceX, and from Max Levchin, a co-founder of PayPal (EBAY) and an early backer of Yelp (YELP). “It’s a very unusual company, so this is all par for the course,” says Levchin.
Photograph by Ike Edeani for Bloomberg Businessweek
Emerald says its automation has made its own scientists much more productive. Before, a researcher would prepare a slide of cells for a microscope, peer into the device, focus it, and then manually count the cells. Now most of this process is automated: The lab’s software focuses the microscope and counts the cells, making it fast enough for Emerald to process 60,000 such images per year. “You might normally do that many in your whole career,” Frezza says. In the past four years, Emerald’s antiviral therapy team has run a total of 400,000 experiments and collected about 1 million results. To make sure the lab’s experiments can be reproduced, Emerald’s software keeps track of which machines did the work and how each performed. “We’ve been banging our heads against the wall figuring out all of the insidious problems here,” Frezza says.
The lab can handle about 40 common experiments. Within 18 months, the company says, that number will grow to 120. “This is the start of being able to run tens of thousands of experiments at the same time and then having a computer pick out the best ones for humans to take a closer look at,” says Raymond McCauley, the biotechnology and bioinformatics chair at Singularity University, an unaccredited school focused on tech. “It’s the continuing emergence of an era of digital biology.”
It’s very early days for the Emerald Cloud Laboratory, whose first clients include the Covert Systems Biology Lab at Stanford. Markus Covert, a Stanford bioengineering professor, says he thinks the company can help other biotech startups get going and allow researchers to pursue more creative experiments. “Most labs are not in a position to buy new high-end equipment to test out an idea outside of their usual research,” Covert says. “Emerald is making it so that if anyone has an idea they can pursue it.” The company has also received praise from Nobel-winning biologist Sydney Brenner, who says Emerald’s logging software may help solve the problem of replicating experiments that has long plagued research laboratories. “I foresee that the system could be used to repeat the published experiments in an objective way and allow companies in particular to assure themselves before committing large resources to development,” Brenner says.