Despite an economic downturn that has damped the enthusiasm of other businesses, the outlook for start-up companies in telecommunications, biotechnology and environmental services is improving, according to stock analysts and officials of the new companies.
The outlook for these companies was the topic last night at a forum on entrepreneurship presented by the University of Maryland at Baltimore and the Greater Baltimore Committee.
"The 1990s will be remembered as the decade of biotechnology," said David Webber, a biotechnology analyst at Alex. Brown & Sons Inc., a Baltimore investment banking firm.
He said the introduction of new pharmaceuticals based on biotechnology has quickened in recent years and four or five new companies have become profitable recently. The development of new drugs is being driven by the fact that they are less toxic and have fewer side effects than do current treatments, Webber said. The new drugs are often more effective, as well, he said.
However, he warned that a new company should not "try to do too much," but rather concentrate on small group of products that it believes will be successful. He also said a company should have an "appropriate strategy," and not to try to become a complete pharmaceutical manufacturer.
One of the new biotechnology firms is Martek Corp. of Columbia, which specializes in searching for specialized compounds and chemicals produced from algae. So far, the company has developed products that can analyze the breath of a person for possible diseases and a nutrient for infant formulas.
"We're tapping just the surface of a large unexplored kingdom," said Henry Linsert, chairman and chief executive officer of Martek.
He said he expects revenues for the companies to increase steadily in coming years.
Linsert also extolled the resources for biotechnology in the Baltimore-Washington area, including the many university and government agencies that are doing research. But a report recently completed by the GBC High Technology Forum, which is headed by Linsert, found that these resources were not being translated into new biotechnology business.
"We have to look at this and promote this," he said.
The area of telecommunication should also be a growth field in the next decade as advancing fiber optic and laser technologies reduces the cost of transmitting a single bit of information to "practically nothing," according to John Rohal, managing director for Alex. Brown.
A byproduct of this advancing technology will the tearing down of traditional national communication monopolies and more global competition, he said. "We think that it will be a very exciting environment," Rohal told the audience. "You haven't seen anything."
He also said there will be increasing standardization in world communications systems and companies that are able to stay abreast of that will succeed.
Orion Network Systems Inc. of Rockville is one of the companies that is part of the new world of communication systems. The company, which had its origins in the early 1980s, plans to create a private satellite system over the Atlantic between the U.S. and Europe.
"We are on the threshold of building that satellite in the next few weeks or so," said John G. Puente, chairman and chief executive officer of Orion.
More down to earth, Quadrel Services Corp. of Frederick has developed technology that can detect certain toxic materials underground.
John W. LaFond, president and chief executive officer of Quadrel, is confident that his company's technology, which can discover material without digging up the ground, will be in increasing demand as government and private businesses attempt to clean up the estimated 100,000 toxic sites around the country.
"We see a growing use of our technology," he said. LaFond said he expects the company to be at a break-even point by the end of the year.