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In Maryland, Competing
Interests, 'Market
Confusion' Slow Baltimore Biotech Growth
BioRegion News [July 9, 2007]
By
Alex Philippidis
Maryland
must streamline
and increase its effort to attract life science companies to the Baltimore
region before the area can emerge as the state’s second-largest biotech cluster
after Montgomery County, a new report by a public-private economic development
group concluded.
The
Economic Alliance of Greater Baltimore said Greater Baltimore and the broader
Baltimore-Washington, DC, region are well-positioned to nurture early-stage
biotechs into maturity given the region’s concentration of universities, its
highly educated workforce, the ability of local firms to win venture capital,
and the activity of a state agency in funding startups.
But in
its 40-page report, called Biosciences in Greater Baltimore and
issued June 29, the economic alliance also said the Baltimore area fell short of
the critical mass of companies needed to maximize biotech growth. The report,
generated from interviews of more than 100 life sciences business leaders in the
state, said issues retarding Baltimore’s effort to become a top-tier bio cluster
include duplication of efforts by multiple state and local agencies, an unduly
narrow economic development focus, and a dearth of space tailored for startups.
“Maryland is often mentioned as a state that is a top investor in bioscience,
given its venture capital funds and investments in university facilities, bio
parks and incubators,” According to the report. “However, bioscience leaders
believe that the immense opportunities and increasing competition should
challenge Maryland to raise its political and financial commitment to the
industry.
“Just
as the region is attaining the required critical mass, there is rising concern
that there are too many state and local economic-development groups focused on
biosciences in Maryland,” the report added. “Firms in the market are confused by
who does what. They do not view economic developers as a unified team with
specific roles working toward common goals.”
Brad
McDearman, executive vice president of the alliance, told BioRegion News
that Maryland has most of the puzzle pieces needed to become a top-tier biotech
cluster.
“It’s
not necessarily that anyone needs to bow out of what they’re doing. It’s that we
need to make the roadmap clearer. And what we hear from bioscience firms is that
they just get confused by who does what,” said McDearman, who previously worked
as a site selection consultant. “The other thing we heard, too, was that
[business leaders interviewed] would like to see some kind of key leadership
organization or leadership to help drive the bio effort overall in the region.”
According to Paul Silber, president of Celsis-In Vitro Technologies, who was
quoted in the report, there is “so much wasted energy duplicating efforts among
all these groups. There are too many cooks in the kitchen.”
Silber
told the economic alliance the region is “starting to get a critical mass” for
biotech but leaders “need to define what really needs to be done and who does
what. One of the biggest things we could do is get all these groups to stop
competing.”
Timm
Johnson, director of business development for Next Breath, a contract services
provider for pharmaceutical, biotech, and medical device companies marketing new
inhalation products, agreed, saying that these groups “could craft a better
message. We need a better pitch in the bio world.”
The
groups at issue are the hodgepodge of local and state government agencies,
public-private economic-development groups, and business trade groups with a
claim to advancing the interests of biotech in greater Baltimore and the rest of
Maryland.
McDearman said life sciences companies are unsure who to turn to when they
consider expanding existing facilities or creating new ones in the Baltimore
region, even though Maryland communities don’t often compete against each other
for jobs. That’s a reflection, he said, of how the state lacks the staunch
home-rule tradition of New York and New England in which counties, not
localities, handle land-use decisions.
Developing a common direction for all those groups, as well as private
bioscience businesses, in order to raise Maryland’s commitment to the industry
was a key purpose of the new Life Sciences Advisory Board that Gov. Martin
O’Malley signed into law on May 8 [BioRegion
News, June 18].
During
his Jan. 31 State of the State address, O’Malley said the panel will be “a
potential precursor to a Life Sciences Authority” that would help Maryland
expand its biotech base by offering biotech companies a single point for
contacting officials, then pursuing approvals and incentives from the state and
local governments — akin to the public-private North Carolina Biotechnology
Center [see April 3 edition of BioRegion News sister publication
GenomeWeb Daily News]
The
state has yet to announce any appointments to the advisory panel. How soon that
happens could not be learned at deadline; a spokeswoman for Maryland’s
Department of Business and Economic Development did not return messages left by
BioRegion News.
The
Life Sciences Advisory Board will consist of Maryland DBED Secretary David
Edgerley and 14 others — one person from the state Technology Development Corp.;
three from federal agencies in the state with life sciences missions; four with
executive experience with life sciences businesses in the state; four from
higher education, one of them a community college; one with life sciences
marketing experience; and a member of the general public.
“I
think it could help a lot,” McDearman said
Other
ideas for growing of greater Baltimore’s biotech cluster recommended by the
report include:
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Expanding existing businesses, especially those recently spun off from
universities and research institutes;
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Pursuing large bioscience firms, viewed as “landing parties” for spin-off
businesses;
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Wooing small biotech companies now located in areas of the US that also lack
critical mass needed to develop a top-tier biotech cluster;
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Attracting scientists or groups of researchers to the region’s universities;
and
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Working with other East Coast biotech groups on issues of mutual interest.
“The
bioscience companies are telling us [they] don’t see these political
jurisdictions. And they really stressed that as we talked with them,” McDearman
said. “If you look at California, it gets treated as one market because it’s in
one state, whereas in the East Coast it’s broken up into a lot of small states.
“We
thought, what would happen if we took California and flipped it onto the East
Coast? What we found was that it was 502 miles from San Francisco to San Diego
and only 442 from Washington to Boston,” McDearman said.
The
Northeast biotech corridor stretching from Washington to Boston surpassed
California in other areas, the economic alliance concluded. For instance, the
Northeast is home to 1,588 biotech firms, compared to 1,174 between San Diego
and San Francisco, and the number of bioscience jobs in the Northeast, 255,031,
surpassed the California corridor’s 168,555.
The
two corridors were more aligned in terms of venture capital, with the
Northeast’s $8.13 billion edging California’s $8.08 billion.
In
fact, the report cited venture capital as one of Greater Baltimore’s strongest
assets, which also included the presence of research institutes and major
universities such as Johns Hopkins, its high concentration of professionals with
advanced degrees, access to state funds through DBED and the Maryland Technology
Development Corporation, and the region’s proximity to Washington, DC, and the
biotech clusters of Philadelphia, New York, and Boston.
The
economic alliance did not suggest changes in economic development policy,
leaving that task to the state and Maryland’s biotech industry group MdBio.
McDearman said the report was not a response to the turmoil earlier this year
following the resignation of Robert Eaton as president and CEO of MdBio. In an
interview with GenomeWeb Daily News in April, Eaton, who cited
undisclosed personal reasons for his departure, defended his tenure as one in
which MdBio’s membership began to grow, to 110 members, after his group merged
into the Tech Council of Maryland, becoming a division of the more than
500-member council, and expanded programs to draw more young people to industry
jobs and develop the annual Mid-Atlantic Bio Conference, co-organized with the
Virginia Biotechnology Association. Yet MdBio’s membership reflects less than
one-third of the state’s 370 biotech companies.
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There are too many cooks in the kitchen. One of the biggest things we
could do is get all these groups to stop competing.”
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Also
not playing a role in the report was a decision by Novartis last year to choose
Holly Springs, NC, over sites in Maryland and Georgia to construct a $600
million manufacturing plant that would be the nation’s first to produce cell
culture-derived influenza vaccines.
When
completed in 2011, the plant is projected to employ 350 people at an average
annual salary of about $50,000, compared with the local average of $34,270. By
choosing North Carolina, the Swiss biotech giant received $41.3 million in state
and local economic-development incentives.
Richard Clinch, director of economic development at the Jacob France Institute
of the University of Baltimore, said Novartis’ decision reflected North
Carolina’s success in integrating many industries that eventually serve biotech
— something Maryland has not done.
“Maryland has done a good job linking Baltimore City and Montgomery County. What
it hasn’t done is what North Carolina has done, which is link the hospitals, the
law firms, the VC firms, the R&D companies to areas on the eastern shore that
are hemmoraging good jobs,” Clinch said. “Maryland lacks the statewide strategy
of a North Carolina, which says, ‘Do your research in our universities, have
your corporate headquarters at Research Triangle Park, and manufacture on the
[eastern] shore.
“I’m
at a loss to explain it,” he added. “I would tie it myself to the lack of a
coordinated state strategy.”
Such a
strategy, he said, would better position Maryland to keep within its borders the
activity of companies that successfully spin out of Johns Hopkins or NIH. On
June 19, AstraZeneca completed a $15.6 billion acquisition of the state’s
largest biotech company, MedImmune, turning the company into a wholly owned
subsidiary. While British-owned AstraZeneca has promised to keep MedImmune’s
home base in Gaithersburg, Md., Clinch said MedImmune’s absorption into a global
giant makes that a promise a difficult one to keep.
“The
next thing that MedImmune developed was likely to be where its headquarters and
production plant were. But now that it’s part of a bigger enterprise, there is
more than one place [AstraZeneca] can choose to develop something,” he said.
Clinch
also said Maryland should also enhance its biotech cluster by improving
workforce development, especially training entry-level and lower-skilled workers
for bio jobs.
Beyond
that, the city of Baltimore has sought to nurture biotech by approving two
research campuses on opposite sides of the city. First is the Forest City
Science + Technology Group, which is building an eight-story,
277,000-square-foot building located at 855 North Wolfe St., the first phase of
its Science + Technology Park at Johns Hopkins in East Baltimore. When it opens
next spring, it will be the first component in an $800 million, 31-acre
mixed-use campus of five research buildings totaling 1.1 million square feet —
including 1 million square feet of labs.
The
second is in West Baltimore, where the University of Maryland, Baltimore, is
completing a six-story, 240,000-square-foot structure at 801 West Baltimore St.,
set to open this August. Last month, UMB issued a request for proposals from
developers interested in constructing the third of 10 planned buildings totaling
1.2 million square feet at the university’s $500 million BioPark research park
next to its campus [BioRegion
News, June 25].
McDearman said the biotech leaders interviewed for the Biosciences in Greater
Baltimore report voiced a preference for more new incubator and
post-incubator space required by early-stage companies.
Incubator space will comprise 10,000 square feet within UMB’s 801 West Baltimore
St., while Forest City will set aside 15,000 to 25,000 square feet of 855 North
Wolfe St. as incubator space for Johns Hopkins spin-offs and other potential
smaller tenants.
Speaking with BioRegion News last month, a Forest City executive said the
incubator space had attracted interest from prospective tenants totaling 18,000
square feet.
“It
doesn’t need to be fancy. If good, basic space that can help them get their work
done at various stages in their growth cycle would be built, they felt like they
could fill it. Do I have any idea of how much square footage that means? I
don’t. I think it’s hard to predict,” McDearman said.
The
Biosciences in Greater Baltimore report is the first industry report
prepared by the economic alliance. The report can be found
here
Copyright © 2007 GenomeWeb LLC. All rights reserved. |
