Biotech industry filled with hope, risk, setbacks But the rewards for profits, health care can be great

January 18, 1998|By Mark Guidera | Mark Guidera,SUN STAFF

For a select few companies in Maryland's growing biotechnology industry, the march to profitability should hasten in the year ahead.

But for the lion's share of the 300 Maryland-based companies in this promising and risk-filled industry, the focus will be on advancing laboratory research and human clinical data on the drugs and other cutting-edge medical treatments in development.

The tedious process -- and frequent setbacks -- in getting products to market has made biotech companies a test of patience for many investors. The good news is that with Food and Drug Administration reforms to speed up the approval process in place, the outlook for the industry may be the brightest since the early 1990s, when a number of Maryland companies went public.

Meanwhile, as Maryland's biotechnology industry begins to mature, it faces several challenges, chief among them finding and training enough skilled technical workers to fill the growing vacancies and keeping promising companies in the state.

"There's a real entrepreneurial spirit in biotech in Maryland today that is similar to what I saw in Silicon Valley and the Boston area years ago when their high-tech industries were on the rise," said Capers McDonald, chairman of the Maryland Bioscience Alliance, an industry trade group.

With so many promising breakthrough drugs, medical treatments and diagnostic tools in the pipeline, the year is sure to be marked by at least several multi-million dollar licensing deals between Maryland biotechs and the big pharmaceutical houses.

Industry experts point to a number of potentially pivotal events to look for in the year ahead:

Oncormed Inc.'s expanded marketing of a new gene-based test for predicting breast cancer. The Gaithersburg-based company has a patent fight to get through first, but if it is able to secure its proprietary position, the test for mutations in the BRCA1 gene would be a defining moment for the industry this year and surely put Maryland biotech on the national map, said Martha J. Connolly, a senior biotechnology industry representative for the state Department of Business and Economic Development.

"For the first time, we will have a test for predicting breast cancer. That has ramifications for a lot of medicine," said Connolly.

MedImmune Inc. of Gaithersburg, in an early test of the FDA reforms, has submitted to the agency human clinical data on its new drug to treat a common and potentially fatal infant respiratory infection. If approved for marketing in 1998, it would generate millions in revenue and vault MedImmune to profitability by year's end, one of the few Maryland -- indeed few U.S. biotechs -- to clear that hurdle.

A MedImmune move to profitability would show that biotechnology has assumed its place in Maryland's efforts to build future economic stability, said McDonald, who also is chief executive of Rockville-based BioReliance Corp., which provides research and manufacturing services to the industry. "Their profitability will set a benchmark for what others in the state can aspire to," said McDonald.

Other top-tier companies should edge closer to the magic profit mark in 1998 and further fuel economic growth. Guilford Pharmaceuticals Inc. in Baltimore could reap multimillion dollar payments from Parkinson's disease research partner Amgen Inc. and improving sales of its brain cancer treatment wafer; Human Genome Sciences Inc., in Rockville, should see research payments from some of its many research partners; North American Vaccine Inc., in Beltsville, hopes to win U.S. marketing approval for its whooping cough vaccine; and newly public Gene Logic Inc. of Columbia hopes to land additional multimillion-dollar deals for access to its genomics technology.

The industry should begin generating a significant number of manufacturing jobs.

MedImmune, for example, expects to open its new $50 million manufacturing plant now under construction in Frederick. To beef up staffing, about 150 will be hired at salaries up to $60,000.

Human Genome Science also expects to hire up to 150 to staff its new $40 million manufacturing plant in Rockville that will produce two human proteins it is using to develop therapies for wound healing and cancer.

Analysts are predicting a boom in job growth for contract manufacturing firms like BioReliance and Baltimore-based Chesapeake Biological Laboratories Inc.

The reason: Dozens of biotechnology companies nationwide, most of whom do not have their own manufacturing facilities, are expected to move new treatments into mass production for large human clinical trials and marketing.

Up to now, neither state economic development experts nor trade groups has tracked biotech jobs closely, though the state has hired a consultant to begin compiling data.

But Connolly, of DBED, estimates the industry employment will grow about 2,000 to 22,000 in 1998 and hit about 25,000 in 1999.

That growth will not come without hurdles.

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