Biotech

Facing increased competition for its main product - the HPV Test - and questions about its plans for growth, Gaithersburg's Digene Corp. agreed yesterday to be acquired by a foreign company in a $1.6 billion cash and stock deal designed to boost the local biotech firm's international sales effort and speed technology development. Under the agreement, Netherlands-based Qiagen N.V. would pay $61.25 for Digene shares - up to $880 million - on a first-come, first-served basis. That represents a 37 percent premium over Digene's $44.77 closing price Friday on the Nasdaq.

For a select few companies in Maryland's growing biotechnology industry, the march to profitability should hasten in the year ahead.But for the lion's share of the 300 Maryland-based companies in this promising and risk-filled industry, the focus will be on advancing laboratory research and human clinical data on the drugs and other cutting-edge medical treatments in development.The tedious process -- and frequent setbacks -- in getting products to market has made biotech companies a test of patience for many investors.

Abandoning its hope of becoming a major Inner Harbor tourist attraction, the Columbus Center is seeking private biotech companies to fill space occupied by its shuttered Hall of Exploration and to help pay off millions of dollars in debts.Just three years after its much-heralded opening, the $160 million center has declared itself insolvent and has been put under the control of a court-appointed receiver, a move similar to bankruptcy.The receivership also raises the possibility that the white-canopied, 1.8-acre center on the pier just east of the National Aquarium will be taken over by the University of Maryland.

MetaMorphix Inc., a Catonsville biotechnology company, yesterday announced a new effort to develop leaner cattle and other agricultural products.MetaMorphix specializes in discovering and developing "growth and differentiation factors," molecules that regulate cell growth. Founded in 1994 based on GDF research by Dr. Se-Jin Lee of the Johns Hopkins School of Medicine, the firm has looked for applications in treating human disorders, such as muscular dystrophy.But research published in November by Lee showed manipulation of one protein, myostatin, produced a strain of muscular "mighty mice," and might have applications in growing beefier cattle.

In an article in the Business section of Sunday's editions, the name of a newsletter published by Steven Delco was incorrect. The proper name of the publication is the Delco Biotech Investment Letter.The Sun regrets the errors.Pub Date: 7/15/97

Sienna Biotech Inc., a medical diagnostic test producer, plans to close its Columbia operation in March and merge with a sister company in Stillwater, Minn.Sienna's parent, American Standard Cos. Inc., said all 80 Sienna employees have been offered employment at the new site. Sienna operates under the medical services division of the Piscataway, N.J.-based giant toilet and plumbing supplies manufacturer.The consolidation will put Sienna with INCSTAR, which makes and markets a variety of laboratory medical testing products.

In an article appearing in the June 12 Business section about Maryland companies named to the "Biotech 50" list, the 1995 net sales figure for Life Technologies of Rockville was incorrectly reported. The company posted $272.3 million in net sales.The Sun regrets the error.Pub Date: 6/28/96

Losses for Guilford Pharmaceuticals Inc. tripled during the first quarter as the Baltimore-based start-up biotech company revved up its research and development spending.The company reported a net loss of $2.2 million, or 58 cents a share, compared with a loss of $636,000, or 32 cents a share, for the previous first quarter. Revenue for the company, which has sold no products, increased to $209,000 from $12,000, as the company earned more interest on its capital.Guilford, which was formed in July 1993 and has 59 workers, increased its research and development spending to $1.6 million during the quarter, compared with $333,000 for the same period a year ago.The company's stock yesterday closed at $5.375 a share, down 50 cents.

Guilford Pharmaceuticals Inc. yesterday completed a $19.5 million stock offering that sold 40 percent more shares than the company had planned, a result that analysts said reflected the strong market for biotech shares and the likelihood that the Baltimore company could gain federal approval for its first product by next year.The company said in July it planned to sell 1.8 million shares of stock, but instead sold 3 million at $6.50 apiece after encountering much stronger-than-expected demand for shares from institutional investors.

The federal government published new rules yesterday that could speed up the biotech industry's development of genetically engineered plants, though the rules were more stringent than those first proposed by the Bush administration.In unusual accord, representatives of both the industry and the environmental community applauded the changes made by the Clinton administration, saying they were necessary. Environmentalists went further, however, saying that subtle changes in the regulations and the way in which they were reviewed signaled the new administration was far more sensitive to environmental interests.

Wearing a white lab coat and focused on handling instruments in a gleaming new classroom, Pauline Samuel couldn't be further away from the world of West Baltimore. Beyond this new lab where she intently studies biotechnology instrumentation techniques, Samuel works nights to support her five children. She still grieves for the two brothers she lost to Baltimore street violence in the past three years. Yet Samuel is also optimistic about her future. She's received financial aid from Baltimore City Community College and she's taking classes at its new Life Sciences Institute, a program based in the University of Maryland's biotechnology research park.

Another year, another disappointment for the industry that people keep calling the future of Maryland's economy. Last week, the best hope for one of the state's top biotechnology companies became a bust. Columbia-based Osiris Therapeutics disclosed that Prochymal, its stem-cell therapy for bone-marrow transplant patients, worked no better than a placebo in patient tests. Osiris stock fell by nearly half. The company founded in 1992 has never made money. It lost $150 million the last four years.

By now, Scott Gibbons Jr. expected to be on his way to earning six figures selling research equipment to academics and biotech and pharmaceutical firms. Instead, the 28-year-old is looking for work after losing a promising job he had for just three months. In August, he took a job as a territory manager for a Glen Burnie-based branch of the Swedish company Q-Sense. He was to help expand sales into the western United States. It was just what he was looking for, after four years of hands-on research and client development at Paragon Bioservices, a local biotech firm.

After eight years of struggling to make a success out of MiddleBrook Pharmaceuticals, chief executive and founder Edward M. Rudnic agreed to step down after a management shake-up and a $100 million investment from a private Chicago investment firm. It's the company's latest effort to bring its version of a time-released antibiotic to market. The announcement, made late Tuesday, took a punishing toll on the company's stock, which fell $1.55 - 50.5 percent - yesterday to close at $1.52. Investors had been counting on the ailing Germantown biotech to find a buyer and cash out. Few seemed to expect that MiddleBrook would continue to operate independently, in large part because the company faced such a tough time on its own during the past few years.

After 16 years of guiding MedImmune Inc. from a struggling Gaithersburg biotech to one of the world's most profitable, Chief Executive David M. Mott is stepping down for personal reasons, the company's London-based parent, AstraZeneca PLC, said yesterday. Tony Zook, CEO of AstraZeneca's North American business based in Wilmington, Del., will succeed Mott when he leaves at the end of July. The announcement surprised local biotech representatives, who look to Mott, 42, as a role model in an industry the state considers among its best hopes for economic growth.

It's as plain as the steely resolve in Gov. Martin O'Malley's eyes that something interesting is about to happen to the Department of Business and Economic Development. The governor didn't tell the department he wanted to overhaul it until just before he said so in a speech last month, according to people familiar with the situation, so O'Malley and DBED Secretary David W. Edgerley haven't been reading from the same PowerPoint plan. The risk is that, like governors before him, O'Malley will turn Business and Economic Development Department into a deal-chasing boiler room for planning ribbon-cutting announcements with out-of-state companies.

CoGenesys Inc., a Rockville biotech spun off from Human Genome Sciences Inc. in 2006, is being sold for $400 million to Teva Pharmaceutical Industries Inc., an Israeli company that specializes in generic drugs, the companies announced yesterday. In a statement, Shlomo Yanai, Teva's president and chief executive officer, said Teva had decided it needed to grow in biopharmaceuticals, and was interested in CoGenesys for its "breadth of technologies and the depth of their team and pipeline."

MedImmune has been able to double the number of potential products in development to 100 since the Maryland biotech was acquired last spring by drug giant AstraZeneca, David M. Mott, MedImmune's president and chief executive officer, said yesterday. Since AstraZeneca agreed to pay $15.6 billion for MedImmune in April, the Gaithersburg biotech has been put in charge of the British firm's biologics units -- Cambridge Antibody Technology in England and a research facility in Hayward, Calif.

THOUSAND OAKS, Calif. -- In this town, Amgen Inc. rules. It's the biggest private employer here. Its 8,300 local employees, known as "Amgenites," make an estimated average annual salary of $162,000. Its sleek corporate headquarters with sweeping views of the Santa Monica Mountains looks more like a college campus, and frequent late afternoon "fermentation parties" offer free beer for all. In this city of nearly 127,000, the biotech giant and its well-heeled work force have kept the area's economy humming.

While Maryland's publicly traded biotechnology companies brought in $2.2 billion in revenue during their most recent full fiscal years, they lost an average of $21 million apiece - for a combined net loss of about $553 million. Many of the 26 reporting companies don't yet have products on the market and just five of them recorded profits. Yet their chief executives earned average annual cash compensation of $611,312, according to a Sun analysis of figures found in regulatory filings. Perks such as housing and transportation allowances were taken into account in the review, though stock options and awards were not because they don't represent cash - something most biotech companies don't have to spare.