Stem cell fund puts TEDCO in spotlight

Agency for entrepreneurs adjusting to new role

July 28, 2006|By TRICIA BISHOP | TRICIA BISHOP,SUN REPORTER

Before January, the Maryland Technology Development Corp. tripped along under the political radar, doling out small loans and grants to state start-ups, encouraging universities and federal labs to commercialize their intellectual property, and generally basking in bipartisan, if somewhat slight, praise.

But that changed this winter when Gov. Robert L. Ehrlich Jr. announced that the semipublic agency, best known as TEDCO, would oversee Maryland money set aside for stem cell research. Suddenly, right-to-life politics were injected into the workings of a group that prided itself on being a nonpartisan friend of entrepreneurs.

The commission for the $15 million stem cell fund met for the first time yesterday. The fund is three times the size of TEDCO's budget.

Some officials say oversight of the fund could be great for TEDCO, finally getting it the attention that they think it deserves. Others worry the agency will lose its focus on helping new businesses and be pulled into partisan politics.

Signs of the latter were appearing before stem cells became an issue. In December, TEDCO's executive director - an appointee of the previous Democratic administration - resigned amid legislative speculation that he was forced out by the current Republican regime, though representatives said that wasn't the case.

The search for a successor was put on hold until last month, so TEDCO's board could prepare for its new stem cell charge. And some believe the position will remain empty until after the November election.

"We don't know who the next governor is going to be," said Del. Kumar P. Barve, a Montgomery County Democrat who was a lead sponsor of the legislation that created the investment agency in 1998."I think a lot of people might tend to hold off for that reason alone," he said.

But Aris Melissaratos, secretary of the state's Department of Business and Economic Development and a TEDCO board member, believes that oversight of the stem cell commission will give TEDCO a certain "gravitas" it was lacking, and possibly draw more candidates to the executive-director opening.

It gives TEDCO "a lot of credibility," Melissaratos said. "It's one thing to give out $15,000, $25,000 grants to companies, it's quite another to give out half-a-million- dollar research grants."

TEDCO was created to commercialize intelligence from the state's universities and federal laboratories.

An executive director - Phillip Singerman - was hired in late 1999, and he, in turn, hired Renee Winsky, who had wanted his job.

Together, they worked to chip away at the wall around labs and universities, many of which have histories of keeping their knowledge to themselves.

To date, the organization - which reports directly to the House speaker, Senate president and the governor - has dispensed, or committed, nearly $7.8 million to 128 projects. Most of the awards are grants.

55 companies helped

But 55 companies took on what could be considered loans of up to $75,000, with a stipulation that they be repaid if they start bringing in revenue. Thus far, 17 companies have reached that point, and either paid back the loans or started to, though it's sometimes in the form of a $20 check.

The loan allocations have earned TEDCO the designation of top venture capital firm - in terms of the number of deals brokered annually - three years in a row by Entrepreneur magazine.

It's a ranking that TEDCO promotes freely even while asserting it is not a venture capitalist, since it does not seek a financial return on its investment, though penalties are assessed if a loan is paid back late.

Barve fears that oversight of the stem cell fund and the commission could jeopardize TEDCO's business-development role.

"The danger with stem cells is that it's so political for people," Barve said. "The very culturally conservative people don't like [embryonic] stem cell research. So there's the possibility, I'm not saying its happening, but there's the possibility that the politics of abortion can intrude into an organization that previously was apolitical, and that's a concern."

California, which allocated a staggering $3 billion to stem cell research - 200 times Maryland's commitment - has been unable to move forward because of legal challenges filed by religious and other organizations.

Last week, President Bush vetoed a bill that would have allowed federal funding for new embryonic stem cell research.

A day later, Baltimore Mayor Martin O'Malley - the presumed Democratic nominee for governor - promised to pledge an additional $10 million to such research in Maryland if he is elected, and states around the country began calling for similar declarations from their leaders.

Ahead of the curve

Only a handful of states have passed laws that dedicate funds to stem cell research, putting Maryland ahead of the curve. But it wasn't achieved without much back-and-forth about the type of cells that were acceptable.

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