BioReliance Corp. builds new offices Firm's growth reflects vibrancy of state's high-tech industries

September 24, 1997|By Mark Guidera | Mark Guidera,SUN STAFF

BioReliance Corp. will begin construction on a new headquarters in Rockville today -- tangible evidence of the company's fast growth, a trend that has not gone unnoticed by Wall Street.

The project also underscores the emergence of Maryland's biotechnology industry as an important source of growth in the state's high-tech job sector, say state economic development officials.

BioReliance, which provides drug testing and manufacturing services to the pharmaceutical and biotechnology industries, is just one of several Maryland biotechnology companies that are expanding.

Next week, Human Genome Sciences Inc. plans to break ground on a $40 million facility, just a few blocks from BioReliance, to produce new protein-based drugs.

A third, MedImmune Inc., already is well into construction on its new $50 million drug manufacturing plant in Frederick. The plant will employ 150.

Chesapeake Biological Laboratories Inc., a Baltimore-based contractor to biotechnology companies, also is well along on a new $12.5 million state-of-the-art production plant that will boost its capacity fivefold. It is to open in early 1998.

"I spent 15 years working in Silicon Valley and I'd have to say this area now has the same excitement and feel. There is a lot of good things going on in the biotechnology and high-technology sectors in Maryland," said -Capers McDonald, BioReliance's president and chief executive officer.

Montgomery County economic development officials see the Human Genome and BioReliance projects as the fruit of a deliberate strategy.

In the mid-1980s, economic development officials identified biotechnology as a source of future job growth and stability. The county moved ahead with cultivating the industry by launching the Life Sciences Center, a 300-acre biotechnology-oriented business and education park. The county had bought the site in the 1960s, initially expecting to lease land to doctors for professional offices.

"We are enormously pleased with the success of the Life Sciences Center," said Duk Duong, assistant director of Montgomery County's office of economic development and the county's coordinator for the life sciences park.

BioReliance's U.S. research and manufacturing plant is in the park, where it employs about 300 people, as is Human Genome's headquarters and research facility.

The last two undeveloped parcels of land in the 300-acre business park have recently been leased, and the county expects announcements soon by companies that have signed on for them, said Duong.

To ensure BioReliance would choose the Life Sciences Center for its new headquarters' location, the county agreed to put its building and other permit requests on a "fast-track" and adjust the zoning to accommodate future expansion, said Duong.

Because virtually all land in the park is leased, Human Genome purchased for its new protein manufacturing facility a 13-acre site in the Johns Hopkins Belward Research Campus down the street. Hopkins is developing the 138-acre campus into a health and science research and business park.

Once fully operational, Human Genome's plant could employ as many as 150, company executives said. Initially, the plant will employ about 75.

The state agreed to provide $2 million for the project from its Sunny Day Fund, which is used to attract new companies or to assist existing Maryland companies in expanding.

BioReliance, which celebrates its 50th anniversary today, will lease its new 51,000 square-foot headquarters from a developer.

Flush with more than $29 million from a $36 million initial public offering in late July, it's hoping to build a new plant to handle large-scale production of biologically-based drugs -- a move that would add more jobs.

The company is close to making a decision on those plans, said McDonald.

"This is a story of success that goes way beyond the stockholders and directors," said McDonald.

One of BioReliance's key strategies is to beef up its capability to manufacture drugs and other treatments based on viral technology. Gene therapy, emerging new cancer treatments and treatments for viral diseases are key revenue growth areas for the company, say analysts.

Formerly known as MicroBiological Associates Inc., the company counts among its clients most of the major drug and biotechnology companies in the United States. The company also has operations overseas.

The company has experienced steady revenue and income growth recently, thanks in part to its growing reputation as a reliable service provider and to the booming need among drug developers for contractors that can test and manufacture drugs made from living cells and other biological elements.

BioReliance posted $37 million in revenue in 1996, up 25 percent from the previous year when it posted $30 million, according to its prospectus for its initial public offering

Income rose also, to $1.5 million in 1996, more than double the $700,000 it posted in 1995 -- an off year for earnings, according to analysts covering the company.

"BioReliance has a long track record of innovation," Morgan Stanley Dean Whitter says in a recent report on the company. The analyst sees the company as "the technological leader" in its field.

Morgan Stanley projects revenue and earnings to be buoyed even higher by the explosion in companies needing testing and production of biotechnology-based drugs, and by company plans to expand viral production capacity.

Outsourcing of drug testing and manufacturing is expected to swell into a $650 million market by the year 2000, a 20 percent annual growth rate that in Morgan Stanley's view favors BioReliance's growth prospects.

Investors have taken notice of those prospects.

Since going public at $15 share July 29, BioReliance shares have risen more than 40 percent. They closed at $21.375, up 12.5 cents, yesterday.

Pub Date: 9/24/97

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