Biotech Companies

Words of comfort for biotech industryLast week was a hard one for biotechnology stocks, which were down about 20 percent after disappointing news from two major companies, Synergen Inc. and Amgen Inc. But Stelios Papadopoulos, managing director of investment banking at PaineWebber Inc. and a biotech specialist, doesn't believe the long-term effect will be catastrophic.While public capital markets for biotech companies appear to have been shut tight, biotech companies have raised an unprecedented $7 billion in the past two years, he says.

When Gail Folena-Wasserman joined Gaithersburg biotechnology startup MedImmune in 1991, she was its first employee in research and development, and dreamed of what the company might be "when it grew up. " Two decades later, the senior vice president for biopharmaceutical development is helping to test new drugs at a dramatically different MedImmune. Five years since a $15 billion acquisition by British pharmaceutical giant AstraZeneca, the company is funneling a pipeline of potential therapies that has grown three times over and covers a wider spectrum of diseases.

The Maryland Biotechnology Center said Wednesday that nine companies will receive a total of $1.8 million in grants to help bring their products to market and create new jobs. Each company will receive roughly $200,000 for research and product development. The program, part of the state's Department of Business and Economic Development, is in its second year and is part of Gov. Martin O'Malley's effort to expand the state's biotechnology industry through 2020. The nine companies that received funding are Neuronascent, of Clarksville; Noble Life Sciences, of Rockville; Unither Virology, of Silver Spring; Paragon, of Baltimore; Telcare, of Bethesda; Diogenix, of Gaithersburg; 20/20 GeneSystems, of Rockville; A&G Pharmaceutical, of Columbia; and Plasmonix, of Baltimore.

Baltimore BioWorks is John Powers's third biotech company — and the one that he says he's most excited about. The 56-year-old Ellicott City doctor built a career in biotechnology, working for the Centers for Disease Control and the National Institutes of Health, and more recently as an entrepreneur and consultant. He already grew and sold two biotech companies in Maryland. He's a minority investor in his latest venture, Baltimore BioWorks, which is taking an unusual tack in the biotechnology sector.

Since biotechnology companies were locked out of the equity markets early this year, they have looked across the Atlantic to European financiers and pharmaceutical companies for money and expertise.And they aren't being turned away. Europe's large pharmaceutical companies seem eager to grab the technology that is so abundant in the United States, but more scarce in Europe.Speaking yesterday at a World Trade Center conference on global partnerships between biotechnology companies in the United States and those abroad, Kenneth B. Lee Jr., national director of Ernst & Young's life sciences practice, said that once again biotech companies have gone outside the United States to do deals.

Foreign investment in U.S. biotechnology firms is growing, and small biotech firms hobbled by scarce capital at home can turn to Europe and Asia for investment capital and help in other areas, experts told a conference of industry leaders yesterday in Baltimore."

What's the difference between Crop Genetics International of Hanover and Nova Pharmaceutical Corp. of Baltimore? About four months.And about $50 million.Crop Genetics raised about $27 million in a public offering of preferred stock in July; in November, the stock market having been rocked by Iraq's invasion of Kuwait in August, Nova had to cancel its own planned $25 million offering of preferred stock because investors weren't biting.Biotechnology companies are being squeezed again, as investor skittishness over the prospects for war in the Middle East and recession at home help turn the screws on the young, capital-intensive industry.

The Maryland Industrial Partnerships Program has approved $4.2 million in high-technology and biotechnology grants to 15 area companies. The money will be used on various projects, including the development of drugs to treat breast cancer , staph infections and malaria. Other projects include the creation of a heated flooring system for chicken houses and a plug-in hybrid car. MIPS gives grants to companies with commercially promising technology and products. The companies join with researchers at Maryland's public universities.

FASgen Inc. Chief Business Officer William McIntosh has been trying all year to get venture capitalists to invest in his Baltimore biotechnology company. But though FASgen has well-regarded scientists and a technology that might result in drugs to treat conditions ranging from cancer to obesity, he hasn't gotten a single financier to bite. His experience represents a larger trend. Only 28.1 percent of the deals that regional venture-capital firms were working on in the last half of the year were with early-stage companies, according to a Mid-Atlantic Venture Association survey.

In what analysts said could lead to a capital crunch for the industry, biotechnology stocks suffered a dramatic decline yesterday after an announcement by Synergen Inc. that its most promising drug, Antril, wasn't as effective as first predicted.The stock of Synergen, based in Boulder, Colo., lost 68 percent of its value yesterday, dropping $28.625 a share, to $13.50. More than 21 million shares changed hands, making it by far the most widely traded stock yesterday."I have never been able to understand the reaction of the stock market," said Jon S. Saxe, president of Synergen.

Perhaps too much fuss is being made over the defection of Celsion Corp. to New Jersey. Founded in Maryland in the 1980s, the Columbia-based biotech company has all of 18 employees. But Celsion is the kind of outfit that is supposed to represent Maryland's economic future: a biomedical research boutique on the verge of launching a product, collecting revenue, booking profits and hiring dozens of workers. And it has decided it doesn't want to do that here. "What we've found — as we looked at the talent pool in Maryland — there wasn't a large supply of individuals" with experience in marketing, selling and distributing pharmaceuticals, said Jeff Church, Celsion's senior vice president of business strategy.

The Maryland Industrial Partnerships Program has approved $4.2 million in high-technology and biotechnology grants to 15 area companies. The money will be used on various projects, including the development of drugs to treat breast cancer , staph infections and malaria. Other projects include the creation of a heated flooring system for chicken houses and a plug-in hybrid car. MIPS gives grants to companies with commercially promising technology and products. The companies join with researchers at Maryland's public universities.

In a conference room in downtown Baltimore, F. Blix Winston compared the Food and Drug Administration to a "slow-moving bulldog. " "You don't want to get bitten," Winston, an expert on the federal regulation of medical devices, told a crowd of about 50 entrepreneurs and academics recently. "You don't want to tangle with the FDA," he warned. "The FDA has the power to come in and padlock a company's doors. " Winston's presentation was part of a new approach by Maryland economic development officials to promote the state's life sciences industry.

The Maryland Biotechnology Center said Wednesday that nine companies will receive a total of $1.8 million in grants to help bring their products to market and create new jobs. Each company will receive roughly $200,000 for research and product development. The program, part of the state's Department of Business and Economic Development, is in its second year and is part of Gov. Martin O'Malley's effort to expand the state's biotechnology industry through 2020. The nine companies that received funding are Neuronascent, of Clarksville; Noble Life Sciences, of Rockville; Unither Virology, of Silver Spring; Paragon, of Baltimore; Telcare, of Bethesda; Diogenix, of Gaithersburg; 20/20 GeneSystems, of Rockville; A&G Pharmaceutical, of Columbia; and Plasmonix, of Baltimore.

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.

Maryland start-up biotechnology companies began lining up Friday morning for a chance to apply for the state's generous, but limited, tax credit for luring investors to the industry - five days before the program can officially accept applications. As of 4:30 p.m., representatives from 11 companies had written their names on a whiteboard in a conference room at the University of Maryland's BioPark in Baltimore. The state will officially accept applications July 1 for the Biotechnology Investment Incentive Tax Credit - which allows for a 50 percent tax break, up to $250,000, per investor in a company.

Life Technologies Inc., a supplier of biological products to biotech companies, reported a 32 percent increase in earnings to $3.78 million in the period that ended Sept. 30 from $2.8 million for the same period in 1991.The Gaithersburg company also reported revenues of $49.4 million for the third quarter compared with $41.1 million for the year before.Three months ended 9/30/92......... . . ....Revenue........... Net................ Share'92.. ......... 49,461,000........ 3,780,000......

In a sign the local biotech industry might be maturing, a Baltimore company has agreed to manufacture small quantities of an anti-cancer drug for a Virginia company.Collaborations have been rare among local biotech companies, but Cel-Sci Corp., a publicly traded biotech company in Alexandria, signed a deal with Chesapeake Biological Laboratories yesterday."There is starting to be enough of a critical mass here to support some collaborations," said Geert Kersten, Cel-Sci chief operating officer.

WASHINGTON -- Desperate for vaccines and medicines to ward off such deadly threats as anthrax, Ebola, smallpox and avian flu, Congress wants to give drug companies a new incentive: cash up front. President Bush signed legislation yesterday that creates a somewhat controversial bureaucracy that would give tax dollars to private companies and universities to develop vaccines and treatments. Scientists would contract with the federal government to take on manmade terrorist threats and naturally occurring pandemics, as well as chemical and radiological threats.