Biotech poised to deliver on early promise

June 18, 1995|By Timothy J. Mullaney | Timothy J. Mullaney,Sun Staff Writer

CABOT CASKIE IS VICE PRESIDENT OF UNIVAX BIOLOGICS, WHICH GOT ITS FIRST MAJOR PRODUCT APPROVED BY THE FDA IN MARCH. — The drawing outside Cabot Caskie's office at Univax Biologics Inc. in Rockville is a cartoon. But it says too much about Maryland's future to be a joke.

The picture shows Chief Executive Thomas Stagnaro, Chief Financial Officer Caskie, and other top managers riding a rocket representing the future of the company and the biotechnology industry.

The caption: "Tom, where did you say we're going next?"

After years of work and several conspicuous failures, that rocket-like future is tantalizingly close for Maryland biotech. Led by a half-dozen or more companies analysts believe will turn profitable by 1997 or 1998, Maryland's 19 publicly traded biotech companies (out of 68 in the state) are nearly ready to deliver on the promise of the cartoon.

But also, it seems, on its uncertainties.

The state has spent 10 years and tens of millions of dollars developing programs to nurture young biotech companies in an effort to create a "new base" that will lead the state's work force of 2.4 million in a prosperous Information Age. As the first crop of companies nears profitability, the state faces new challenges to keep the firms' growth close to home as the real money is about to be made. The stakes are very high indeed.

"You could have the discovery of a cure for AIDS, you could have the discovery of [specific] human genes," said James Fielder, deputy secretary of Maryland's Department of Economic and Employment Development. "All these things are being worked on right now, in addition to the creation of well-paying jobs our children can work on."

A 1993 state report estimated that Maryland biotech companies could create up to 40,000 jobs by 2000 just by keeping the state's share of the market as the industry grows. Currently about 5,100 work for state biotech companies.

Behind the state's biotech effort looms the shadow of Sparrows Point, the Bethlehem Steel mill in Baltimore County that once anchored the industrial job base Maryland hopes the life sciences will replace.

After employing nearly 29,000 people in 1957, the mill has shrunk to 5,400 workers today. Once the state's biggest private employer and the world's biggest mill, Sparrows Point accounts for 23 percent of the 101,000 manufacturing jobs Maryland has ** lost in the past 38 years.

But as Maryland's biotech industry approaches real success for the first time, the promise that it will be a major part of the state's post-manufacturing job base -- the next Sparrows Point -- is still open to question.

"I would love to say that would be the case," Mr. Caskie said. "But we believe we can produce substantial sales with a work force that stays under 1,000 people (Univax now has 130 workers). DEED doesn't want to hear that, but these are good jobs. We have no positions under $24,000 a year. The average salary is in the neighborhood of $75,000 a year."

For investors, the past six months have seen a steady stream of almost entirely positive news about Maryland biotech firms, news that brings anticipation of profits and jobs:

* Martek Biosciences Corp. of Columbia got its first product, a baby-formula additive that stimulates infant brain and eye development, on the market in Europe. Martek also disclosed that it had reached licensing deals with two top U.S. formula makers who are working with the Food and Drug Administration to get the product, called Formulaid, approved for sale in the U.S. Salomon Inc. last year called Martek "a stock that could explode."

* Univax got its first major product approved by the FDA in March, setting the stage for sales of up to $100 million by 1999. Analysts say WinRho SD will quickly supplant existing therapies for a common AIDS complication that causes the body to destroy its own blood platelets. The drug will help the body maintain its ability to stop bleeding and resist bruising. "We're a real business now," Mr. Caskie said.

* Guilford Pharmaceuticals Inc. of Baltimore plans to file for final FDA approval by fall for its Gliadel implant for brain cancer patients. Gliadel is a wafer soaked with chemotherapy drugs that surgeons can implant immediately after removing a tumor, allowing the drugs to work directly on the remaining cancerous cells without the side effects of today's chemotherapy. Analysts project $50 million to $75 million in Gliadel sales by 1998.

* MedImmune Inc. of Gaithersburg plans to reapply for final FDA approval this summer for RespiGam, which is designed to prevent a virus leading to infant pneumonia. Rejected by an FDA panel in 1993 because of flawed clinical studies, the drug's sales could reach $82 million by 1998, according to Morgan Stanley & Co. The company's 1994 sales were only $12 million.

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