Growing The Biotech Business

November 04, 1991|By Michael Pollick | Michael Pollick,Sun Staff Correspondent

Gaithersburg -- Back in 1975, the year scientists received U.S. patent on techniques for manipulating the cellular machinery of DNA, Stephen Turner started Bethesda Research Laboratories to sell researchers a "tool kit" with which to dice and splice the thousands of genes in a strand of DNA.

Now, Mr. Turner is building a second-generation business aimed at spreading to hospital pathology labs the ability to analyze DNA.

Mr. Turner's experience illustrates an important trend within Maryland's burgeoning biotechnology industry. In a process that mimics the cell growth they are manipulating, Maryland biotech executives are splitting off, creating their own businesses and forming symbiotic relationships with the companies they left behind.

In an industry still in its infancy, they are being lured by fast-developing niche opportunities and by venture capitalists eager to make deals. And that process, which helped build other technology-based centers such as California's Silicon Valley -- is driving the development of Maryland's biotech industry.

Consider a few alumni of Mr. Turner's original company, which was later reorganized as Life Technologies Inc.

Mr. Turner, who was forced out, turned misfortune into an opportunity to develop a niche. The man who replaced him at Life Tech, Dr. Jim Barrett, left a few years later when he received an offer he couldn't refuse to form a "concept company" for a team of New Jersey venture capitalists. And William Lynn, another Life Tech alum, was recruited to run a unique company started in 1988 by two former NIH scientists, freeing them to further their research. Now Mr. Lynn's little gem of a company, the world's only maker of a system for growing perfect body cells outside the body, appears on the verge of its own explosive growth.

While the state and Baltimore are engaged in prodigious efforts to "incubate" new biotechnology companies, the new corporate creatures are being formed the old-fashioned way -- by capital and talent finding each other. And for their scientific inspiration, the companies in the Bethesda-Gaithersburg I-270 corridor need only turn to the National Institutes of Health, and surrounding agencies. NIH, based in Bethesda, is actually a collection of 13 research institutes. Collectively, they house more than 5,000 researchers and a support staff of 16,000, as well as supporting the work of 22,000 investigators at other medical and university centers.

Of course, Maryland's biotechnology industry still doesn't rival the impact or scope of Silicon Valley.

"I think if you took the current Silicon Valley family tree and chopped it off about 1960, they would look very similar," Mr. Turner says. "You didn't have Apple, you didn't have a lot of large volume end-user-driven products, but the base was building."

Still, the region, and in particular the corridor, has passed the point of critical mass. Well-respected biotech scientists and administrators are coming here because this is "where it's at."

Already, as industry booster Walt Plosila of the Montgomery County High Technology Council points out, the region is home to 107 biotech firms, or nearly one out of every 10 such firms in the nation.

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It was while running Life Tech that Mr. Turner spotted the need for equipment that would move genetic analysis out of the research lab and into the hospital lab. His new company, Oncor Inc., focuses exclusively on that market, which is much larger than the research market, and in need of more automated -- and therefore more expensive -- equipment.

"You have to be in the trenches to see the opportunities," Mr. Turner says.

In 1983, Stephen Turner lost a battle for control of Life Tech. The same year, he started a second genetics-based company just down the street.

While the name, Oncor Inc., is derived from the the idea of a corporation that is devoted to oncology, or the study of cancers, Mr. Turner acknowledges that it "also has the meaning of second effort."

Using ONCOR's $10,000 DNA probe machine and the set of chemical enzymes that comes with it, doctors in hospital pathology labs already can detect several kinds of cancer and genetic diseases as they emerge on the molecular level.

Now a publicly traded company that is getting rave reviews from Wall Street analysts, Mr. Turner's Oncor was recently able to attract as its new chief operating officer George Evanega, the former chief administrative officer of one of the pharmaceutical giants, Miles Inc.

Mr. Evanega, who received offers from both coasts when he put out his curriculum vitae, came to Oncor because "the opportunities are immense." Oncor, he says, "has developed many close relationships with clinical teams in the genetic disease area, and I think the possibilities to amplify these into a growing business are certainly apparent and available."

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