Md.'s Growing Stake In Biotech

December 04, 1993|By John E. Woodruff | John E. Woodruff,Staff Writer

The state yesterday named a Beltsville entrepreneur that it had rejected in March to build and run the $20 million centerpiece of Maryland's drive to become a world biotechnology center.

The announcement appeared to end a frustrating two-year search in which several U.S. drug companies declined to negotiate for the job and a foreign drug company backed out after having held exclusive negotiating rights for five months.

The frustrations have repeatedly delayed the opening of the Maryland Bioprocessing Center, a production site that is critical to the state's economic-growth strategy for this decade and the early 21st century.

"We may look back to this day as one of those breakthrough moments in the development of the life sciences in our state," said Mark L. Wasserman, the state's secretary of economic and employment development.

The center, scheduled for construction next to the Johns Hopkins University's Bayview research campus, is intended to make Maryland the first state to offer small biotech companies a subsidized place to produce test batches of newly invented products.

At an announcement yesterday, Barbara Plantholt, a venture capitalist who is chairwoman of the new center's board, and Jacques R. Rubin, head of the company that will do the job, are optimistic that the center can bring jobs and economic growth to Maryland.

As recently as March, when the state chose a German company, Boehringer Mannheim, to do the job, the two had seemed less friendly.

Asked why Mr. Rubin's Bio Science Contract Production Corp. had initially been rejected in favor of the German company, Ms. Plantholt said, "We would rather lose Boehringer and go back to the state and say, 'This is not a viable enterprise' than to spend it on something that is going to fail."

"Mr. Rubin and his team have what it takes to make this project a success -- a combination of experience, an entrepreneurial mind-set, a high level of motivation and a track record of success," she said.

After his company's rejection in March, Mr. Rubin made the rounds of legislators to argue that the plan to use Boehringer Mannheim would not "help the small biotech company" because it would force small companies to depend on the big German company's established methods.

In July, Boehringer Mannheim abruptly became the second multinational company in two years to turn away from the project, leaving the board little choice but to turn to Mr. Rubin.

Since then, Mr. Rubin has bolstered his bid by adding new talent to his team. Most notable is Edward M. Sybert, who designed and built a bioprocess facility at the University of Maryland at College Park. Mr. Sybert will join Bio Science as vice president of operations in January.

The center is meant to be the first state-subsidized place to offer a "missing link" in the biotechnology product development process.

Many biotechnology companies and scientists find that after they produce a potential medicine or other product in a test tube, they cannot afford the equipment it takes to produce the much bigger batches required to get a product tested for Food and Drug Administration standards. The Maryland center is meant to provide a place where they can economically rent state-of-the-art "clean rooms" that meet FDA standards.

That makes it a critical element in the state's 2-year-old drive to end a situation in which for many years important drugs and other products that have been invented at Maryland institutions like the National Institutes of Health and the Johns Hopkins Medical Institutions have ended up being produced by big drug companies in New Jersey, Pennsylvania or other states.

The new contract calls for Mr. Rubin's company to build and operate a 58,000-square-foot plant in southeast Baltimore. It will be capable of serving up to 32 clients a year, assuming that each uses it for an average of three months.

The General Assembly has appropriated $16.5 million for the project, and the city has contributed a 5-acre site valued at $500,000 and about $250,000 in initial site preparation.

The legislature required that the center's board find an additional $3 million in private capital. Ms. Plantholt said yesterday that Mr. Rubin's company will invest that amount in the project, thereby meeting the legislative requirement, but that the search for additional private money continues.

"This is our business, so we have been developing plans even before winning this job, and for that reason we will be able to have this facility open sometime early in 1995," Mr. Rubin said.

Once the center is operating, Mr. Rubin will pay the state-sponsored corporation that will own it a rent that will rise from nothing in the first 4 1/2 months to $1.2 million annually in the third year and $1.5 million in the fifth year.

From that income, the board will grant Maryland-based biotech companies subsidies of up to 50 percent of the market rental value to help them get their products through the testing phase.

Mr. Rubin said his company will then offer not only facilities and management but also production advice and help in navigating the FDA approval process.

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