Md. gets advice to lure biotechs

Incentives offered to vaccine makers skimpy, report says

Luring vaccine makers means giving more


Maryland's professed goal of becoming the "vaccine manufacturing capital of the world" is hampered by the lack of communication among political leaders and a reluctance to offer aggressive incentives to draw major players, according to talking points prepared for a recent report that assessed the possibility.

The report, which one official said cost about $250,000, was prepared from January through July and paid for by city and state agencies.

It assessed the market demand for vaccine manufacturing, what a Maryland facility would look like, how it would be financed and "the regional big picture" needed to make the dream a reality.

It was an effort to capitalize on the billions that Congress and the president approved for pandemic flu preparation last year, as well as to find a lucrative niche for local biotechnology resources.

Aris Melissaratos, secretary of the state's Department of Business and Economic Development and the first to voice the "vaccine capital" goal, said the state is still positioned to be a leader in vaccine research or manufacturing despite the summary.

A document associated with the report concludes that:

The state's vaccine manufacturing incentives are insufficient compared with those offered by other states.

Business development groups need to involve the General Assembly in deals earlier.

The state must "invest greater resources and implement innovative deal structures" to be a player.

The talking points - part of a presentation prepared to brief city and state officials - were obtained yesterday by The Sun. State leaders confirmed that the document summarized the report's findings.

Officials have thus far refused to release the Vaccine Manufacturing Feasibility study, saying it contains confidential information that could hurt the state's competitive edge. The Sun submitted a Maryland Public Information Act request seeking the document Friday.

The conclusions strike a blow to Maryland's biotech ego, which has for years been buoyed by the state's natural resources: It's home to federal laboratories, the National Institutes of Health, the U.S. Food and Drug Administration, major medical institutions and more than 350 biotechnology companies.

Losing ground

But when paired with intense industry competition from other states, Maryland's pros are sometimes outweighed by its cons: a tense relationship between the administration and the legislature, and high land prices and labor costs. The state has lost ground in some recent rankings of top U.S. biotech areas as others have ramped up their efforts to attract the industry.

All 50 states have their hands in biotech in some way, with some giving large incentive deals to attract the business - such as California's $3 billion dedicated to stem cell research. And North Carolina has been known to offer free land.

"Maryland is a more expensive state to do business," Melissaratos said.

But he pointed to several companies conducting such work here already, particularly in the Frederick area.

Emergent BioSolutions Inc. of Gaithersburg is building a manufacturing facility there. And MedImmune Inc., also of Gaithersburg and among the best-known biotechs in the country, recently has committed to doing the same, which could add 840 jobs in Maryland by 2008.

MedImmune's Chief Financial Officer Lota Zoth said the maker of FluMist chose to locate its plant in Maryland because of the incentives provided by the city and county of Frederick, along with the state. Among them were $19 million to help pay for capital costs and staff development and an overhaul in Frederick to improve access to the facility.

Zoth also said she would welcome other vaccine manufacturers, even if they were competitors. But Melissaratos said he couldn't spend "too much more on one company than [was spent] on MedImmune. Balancing all those things is kind of tricky."

Maryland lost a vaccine manufacturing plant to North Carolina this summer that was proposed by Novartis, which wanted more than Maryland could give. Melissaratos said other states had incentive deals on the table that were five times what Maryland was willing to offer.

More aggressive

"At the end of the day, the other states were much more aggressive than Maryland," said Nipon Das, the former executive vice president in charge of business development at the Economic Alliance of Greater Baltimore.

Das, who supervised the state's Vaccine Manufacturing Feasibility Study, left his position in July. He now manages an investment strategy firm in New York.

As Congress and the president approved spending billions on preparations last year for a flu pandemic, Maryland officials began vigorously touting the state as a potential hub for vaccine manufacturing.

Melissaratos proclaimed Maryland a possible "vaccine capital of the world." His boss, Gov. Robert L. Ehrlich Jr., claimed biotech manufacturing as a key business strategy. And Baltimore Mayor Martin O'Malley publicly announced plans for the vaccine feasibility study.

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