New and innovative life for an old hospital

In Pittsburgh, the Suburban General Hospital in Bellevue closed in 2010, leaving a 230,000 square foot shell of a former community pillar. For the past two years, Allegheny Health Network (AHN) has been working to reimagine and revitalize this near-empty hospital and give it new life as a hub for community health and innovation.

The result is AlphaLab Health, an accelerator under the umbrella of Innovation Works. The hospital’s old lab space will house biotech research labs, the patient rooms offices and the waiting rooms’ conference space.

We spoke to two of the innovators who are working to make AlphaLab Health a reality, Dr. Jeff Cohen and Rich Lunak.

Dr. Jeff Cohen, the thought leader behind the initiative, is chief physician executive, community health and innovation at AHN. A longtime urologist specializing in oncology, Dr. Cohen has a passion for entrepreneurship and health care vision.

Rich Lunak is president and CEO of Innovation Works and has pioneered it for software, hardware and now, life sciences. He also co-founded Automated Healthcare, a company that pioneered the use of robots to dispense drugs in hospitals.

Tell us the thought process behind creating AlphaLab Health.

Cohen: There was an absolute need to create a space for early startups and to connect them with the healthcare world. We have a very strong economy in this region, with a lot of companies going public. We needed to be able to continue to grow seed companies from the strong educational and entrepreneurial culture that you have in western Pennsylvania. We’re connected to Highmark, as well. So with their expertise and the work being done here standing up early phase companies in other domains, we decided to parlay that expertise and focus on healthcare—namely, anything that deals with improving the delivery, or the products within healthcare.

Lunak: Accelerators have become incredibly popular in entrepreneurial circles. But really, it’s very unique to have a public private partnership like this one in the entrepreneurial accelerator space. With this program, entrepreneurs not only get all of the essential ingredients to launch a company in life sciences—investment, mentorship support, wet lab space, dry lab space and facilities and offices—they also get deep clinical and medical expertise.

The old hospital model is changing, with outpatient procedures and urgent health care. Many hospitals are closing, particularly in the poorer neighborhoods. Jeff and his team have done really innovative work to understand how you can repurpose these community assets and large community anchors and employers in a way that can bring not only jobs back in that community, but also provide a lot of other services, including workforce development and health care.

Tell us how the space is used.

Cohen: We’re repurposing this community asset as a home for the cohorts as we mentor and teach young entrepreneurs what they need to know to get into the medical market. They also learn through real-world experience what hospitals need, what providers need, what patients need, what insurance companies need, what are the regulatory environments surround us and so on.

Five of the companies in our first cohort have taken up residence in this closed facility. It’s really important for young companies to minimize the burn for real estate and be surrounded by assets that give them a higher chance of success. This is what you do when these hospitals are closing. It’s taking this community asset and repurposing it for the benefit of the entrepreneurs in the community. And these companies are staying there.

What kind of startups are you seeing so far?

Cohen: We’re seeing all kinds. In our first cohort, which just finished, we had a pharma startup, a software startup, and we’ve had device startups. In the first cohort, we saw somewhere like 90 applications. For our second, which we are picking now, there was an excess of 130 applications for six spots.

How did the first cohort go?

Lunak: We just finished earlier this summer. We graduated companies that have already gotten significant traction, both in terms of customer traction and follow-up investment. They’re not going to be ready for an IPO or acquisition for probably some time, but they’ve come out of the gate really quickly.

Do you have a couple of examples?

Lunak: One is CytoAgents, Inc., a clinical-stage biotechnology company that focuses on the development of innovative pharmaceutical products for the treatment of life-threatening issues associated with Cytokine Release Syndrome (CRS), an overreaction of the immune system causing systemic inflammation. During COVID, CRS was one of the main reasons people were put on ventilators, but it also happens a lot with oncology patients.

Cohen: The area of sleep apnea is one [area where] we’re seeing a lot of innovation. One is from an assistant teaching professor at Carnegie Mellon [University] who has developed a technique for fitting a sleep apnea mask with a digital picture that can be taken on a phone.

AlphaLab Health is a product of a lot of community help.

Cohen: The chance to be able to create this model is a credit to the community and to Highmark, and the people around us. We’re looking for answers. We’re trying to fix healthcare. Basically, they gave us a hospital and said, ‘Have at it.’ It’s a privilege. It’s not a right. It’s a crazy idea, but it’s an idea whose time has come.