Human Genome Sciences Inc. broke ground yesterday for a $200 million large-scale manufacturing plant, the latest of example of how Maryland's biotechnology industry is maturing into one capable of producing drugs - not just researching them - despite an economic downturn.
The 175,000-square-foot plant, on the Belward Research Campus of Johns Hopkins University in Rockville, will be able to produce drugs in quantities large enough to put on the market when the facility is completed, perhaps as early as mid-2003. It will employ about 350 people.
Already, Human Genome produces drugs for human testing in a smaller plant on the Belward campus. Elsewhere in the state, MedImmune Inc. is producing its drug Synagis for an infant respiratory virus at its Frederick manufacturing plant, along with a component of another of its marketed drugs. Also, contract manufacturer BioReliance Corp. of Rockville, which opened its plant in June last year, is producing large quantities of drugs for late-stage human testing.
The growth in biotech continues despite an economic downturn that has left other industries laying off workers and scrounging for ways to save money. A number of Maryland biotech companies, in contrast, continue to hire, though many of them - including Human Genome - have no product on the market and little income.
In a sign of the industry's overall health here, an online job bank at MdBio, an organization devoted to promoting the biotechnology industry in the state, has advertisements for more than 240 industry openings at about 40 companies.
"We're going to be hiring 500 people here within the next year," said Human Genome Sciences Chief Executive Officer William A. Haseltine, whose company employs about 900 and expects to have 1,000 workers by year's end. About 350 of those 1,000 workers will have been added this year.
The growth comes in part because many biotech companies raised millions in cash during the booming stock market of mid-1999 through early this year, insulating them from downturns. Human Genome has $1.8 billion in cash on hand, an amount that Haseltine estimates is enough to fund operations for 18 years at current spending rates. Though venture capital investment is slowing overall, a number of firms once focused on investing in the now stumbling high-tech sector have a renewed interest in biotech, a field in which developing a drug takes a long time but can provide an enormous return.
Lastly, the planning for many biotech company expansions began years ago. Unlike the ailing dot-com sector, the biotechnology field generates projects that can't be rushed.
"It's not like buying a hamburger, cooking it and converting it to cash," said David Edgerley, director of Montgomery County's Department of Economic Development, as he stood in a windswept tent across from the field in which Human Genome had just broken ground by detonating explosives.
But, after years of research and development and pilot manufacturing projects in which limited quantities of drugs were produced, companies are coming of age. That "will lead to partnerships with pharmaceutical companies or Maryland's ability to capture pharmaceutical development," Edgerley said.
The growth runs the gamut, from relatively established companies such as Gaithersburg-based MedImmune, which recently announced a new $100 million headquarters and research and development campus, to NeuralStem Inc., a developer of stem cell therapies that just moved out of its low-rent location for young technology businesses on the University of Maryland campus in College Park. It's now in a much larger Gaithersburg building, where it plans to begin growing cells it can sell directly to pharmaceutical companies for use in research. The company, county economic development officials say, plans to add 141 jobs during the next three years.
NeuralStem has projected it will have 80 employees by January, up from about 40 in July.
Still, Montgomery County Executive Douglas M. Duncan said yesterday that he doesn't take it for granted that Maryland will morph into a major manufacturing center for biotech drugs. "It can be," Duncan said, just after pushing a plunger with Haseltine and Human Genome Sciences Chief Financial Officer Steven C. Mayer that triggered the dirt-blowing explosives on the plant site. "I'm not convinced we're definitely going to be there" without a stronger state focus on nurturing and keeping biotechnology companies, he said.
Human Genome is building its latest plant on land it is acquiring from the county and then transferring to a trust. The company will then lease the building, which is being financed through bank loans, from the trust. The transaction enables Human Genome to build without dipping into its cash reserves, leaving them for drug development. But the county has invested more than $5 million in the 30-acre site, including funding for roads and turning lanes. Human Genome will have three buildings on the site.
Haseltine, whose company also is building a major headquarters campus in Rockville and has purchased an adjacent research and development facility from Life Technologies Inc., says he still wouldn't hesitate to move under the right circumstances.
"A CEO must make decisions based on economic advantages," he said. " ... If they offered big enough incentives, I'd build in Nebraska."