Novavax leaving Columbia for Pa.

Biotechnology company is moving headquarters to Philadelphia suburb

Vaccines unit to stay in Md.

August 10, 2004|By William Patalon III | William Patalon III,SUN STAFF

Novavax Inc., one of Maryland's few biotech companies with products on the market, is moving its corporate headquarters to the Philadelphia suburbs, where it hopes to tap a pool of experienced pharmaceutical executives as it extends its reach in the marketplace.

Clinching the deal was a state-financed package of loans and grants totaling nearly $1 million, an amount that could easily increase if the Columbia-based company demonstrates an ability to generate new jobs, said the economic development official who was Pennsylvania's point person in persuading Novavax to move its headquarters north of the Mason-Dixon Line.

"I certainly wouldn't have [done this deal] if I didn't see some real promise" in Novavax, said Kim McFadden, a regional director for the Pennsylvania Governor's Action Team, a group of high-level economic development professionals who are deployed on major projects. "It's our hope, naturally, that they build themselves into the next big biotech company."

The move, which is to be done over the next two months, will enable Novavax to consolidate corporate, research and development, and manufacturing operations under one roof. The company's main manufacturing plant - staffed by about a dozen employees - is in the Philadelphia area, the company said.

Novavax has two main business units, one specializing in vaccines and the other on drug-delivery systems that focus on improving women's health, said Nelson M. Sims, president and chief executive. It has several products, the most prominent being Estrasorb, a topical estrogen replacement absorbed through the skin.

Nova- vax's vaccines unit, with about 20 employees, will remain in Rockville, close to the National Institutes of Health, Sims said.

Of the company's remaining 155 employees, about 130 are "in the field," involved with such jobs as sales and marketing. About four of the company's Maryland employees will have to relocate to Malvern, the Philadelphia suburb that will be Novavax's new home, Sims said.

Maryland's work force is well-stocked with scientists, researchers and others skilled in research, testing and development, he said, but lacks a pool of executives experienced in commercializing new products and establishing production lines.

The company's most recent high-level hires - vice presidents for marketing and for manufacturing and product development - were found in New Jersey and the Philadelphia area, Sims said.

Pennsylvania is providing Novavax with a $400,000 working capital grant, which will defray relocation costs, and a job-training grant totaling $37,500, said McFadden of the Governor's Action Team.

The company will also receive a low-interest loan of $500,000 for new facilities and big-ticket equipment purchases, McFadden said.

Novavax reported yesterday a widened loss for the second quarter on increased revenue.

For the three months that ended June 30, the company reported a net loss of $7.72 million, or 22 cents per fully diluted share, compared with a net loss of $5.03 million, or 17 cents per share, for the comparable quarter last year.

The company noted higher operating and marketing expenses as it launched Estrasorb.

Second-quarter revenue was $3.01 million, up 36 percent from $2.28 million for the second quarter of 2003. Novavax said initial orders for Estrasorb in June were $1.5 million.

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