Fourteen Maryland biotechnology companies tapped nearly $6 million in new funding from investors who qualified for a state tax credit.
The Biotechnology Investment Incentive Tax Credit is a state-mandated program that allows for a 50 percent tax break, up to $250,000, per investor in a qualified biotech company. To qualify, companies must be less than 12 years old, have headquarters in Maryland, employ fewer than 50 people and be state-certified as a biotechnology company.
The tax credit is a central component of Gov. Martin O'Malley's BioMaryland 2020 plan, a 10-year, $1.3 billion strategy for growing the state's biotech industry.
Five of the companies that received the tax credit this year — BioMarker Strategies, Gliknik, FASgen, Arginetix and A&G Pharmaceutical — are based in the Baltimore area. Eight are based in Montgomery County and one is based in Prince George's County.
"It's a good program," said Dr. David S. Block, chief executive of Baltimore-based Gliknik. "This program is something that other states are trying to model because it's been so successful in creating and sustaining jobs in the biotech industry throughout the state."
The state has given $24 million of tax credits that have been used as funding by companies over the past four years. That represents a total investment in biotech startups of about $50 million during the same period.
As word has gotten out about the tax credits, more companies are competing for them. Last June, more than 20 companies applied for access to the tax credit, with many biotech executives camping out for several days at the University of Maryland's BioPark in West Baltimore to sign up.
It was the biggest turnout yet for the program, which is helping to attract investment in Maryland biotech companies from out-of-state investors.
Per state law, the credits are awarded on a first-come, first-served basis each year. The incentive program is administered by the Maryland Department of Business and Economic Development.
In fiscal 2011, the tax credit program will offer $8 million in new funding for biotech companies.