Within the last month, two rising Maryland biotechnology firms have announced their intentions to set up plants in other states, raising questions about whether Maryland can keep its high-tech offspring at home once they reach adolescence.
A recent case is MedImmune Inc., a Gaithersburg company induced by a package of financing and tax incentives to sign a letter of intent to build a $30 million manufacturing plant in Cleveland, which may create 50 to 100 jobs.
At about the same time that deal was being sealed in late January, Martek Biosciences Corp. of Columbia announced that it intends to buy a $10 million fermentation plant, with 18 workers, in Kentucky to make a new infant for mula additive.
In both cases, the companies will continue to have their headquarters in Maryland, where 70 people work for Martek and 115 for MedImmune.
But the defections, particularly MedImmune, have created concern for James Brady, the recently designated secretary of the yet-to-be-renamed state Department of Business and Economic Development.
"It's crazy to incubate these companies here and have them go someplace else to create all the real jobs that could have an impact on the state," said Mr. Brady, who will take the helm of the agency in mid-April. "At a minimum, I want to establish a whole new relationship with companies so that in the future Maryland becomes really the destination of choice."
Industry officials agree.
"This is a wake-up call," said James S. Burns, president and chief executive officer of Osiris Therapeutics Inc., a biotech firm that is moving to Baltimore. "We ought to be giving some critical attention to the manufacturing portion of an evolving biotech industry because the state of Maryland has put a tremendous emphasis on life sciences."
In the Martek case, it is doubtful the state could have prevented it, since it was a happy coincidence of the company finding an unusual facility at a very cheap price.
"We got a terrific financial deal," said Steve Dubin, chief financial officer of Martek. "The replacement costs [of the plant] would be in excess of $20 million, [and] we got [it] for $10 million."
"If I had that plant in Maryland for that price, I would be in Maryland," Mr. Dubin said. "There's no question about it."
But with MedImmune, it was simply a case that Cleveland officials offered a better deal than what was thought available in Maryland.
"It certainly was more attractive to the company," said David M. Mott, vice president of business development for the company that creates and markets drugs for infectious diseases and cancer. While not disclosing the offer, Mr. Mott said it included both up-front financing and incentives to keep operational prices low.
Cleveland's experienced work force and institutions like the Cleveland Clinic and Case Western Reserve University were other attractions, he said.
But Mr. Mott also said Maryland's efforts to cultivate biotech firms is missing incentives for companies like his looking to start manufacturing.
"I think most of the focus in Maryland . . . has been on incubator facilities and shared production for clinical trial materials," he said. "But there are not yet programs, at least to our knowledge, of a magnitude which would be sufficient to help companies that have really grown past that stage, as we have."
For its part, the Department of Economic and Employment Development was not aware that MedImmune was looking for a manufacturing facility and did not give a competing offer, said James E. Fielder, acting secretary of DEED.
Mr. Mott said that MedImmune did not ask for an offer from Maryland but that it was aware of what was available from past discussions.
But with the letter of intent not due to be firmed up until this summer, Mr. Brady said the state is not going to give up.
"I've seen letters of intent a lot, and they are no more than that," hesaid. "We're going to talk, we're going to hopefully be in a position to try to accommodate them in Maryland."
But he concedes that the Cleveland deal is "pretty far along."
To prevent such future incidents, Mr. Brady wants to develop a closer relationship with biotech companies to meet their needs when they move to manufacturing. "We have to be involved early on," he said.
With institutions like Johns Hopkins Hospital and the National Institutes of Health, Maryland is an ideal place to locate a research and development company, said Mr. Burns of Osiris, a company that is moving its 35-person headquarters from Cleveland to Baltimore in July.
"For research and development folks, it's the right climate to be in," he said. "But when you are considering manufacturing locations, you have a whole different set of considerations."
The proposed 100,000 square-foot Cleveland factory for MedImmune, which is scheduled to start production in 1997, would produce CytoGam, a drug used in kidney transplants that accounts for $12.1 million of MedImmune's $18.9 million in revenues last year.
Despite a 43 percent increase in CytoGam sales, the company continued to be unprofitable last year with a net loss of $18.8 million, or $1.29 a share, for the year compared to a loss of $13.2 million, or 96 cents a share, for 1993.