Biotech

Cashing in on the superheated market for biotechnology stocks, PE Corp.'s Celera Genomics Group said yesterday that it has sold 3.8 million shares in a $225-a- share secondary offering. The Rockville gene-mapping firm raised $820 million after expenses and fees. When Celera announced plans for the secondary offering a month ago, it proposed marketing 1.6 million shares. With the stock selling then for $202 a share, that would have yielded about $320 million. Celera helped trigger the biotech run-up when its president, J. Craig Venter, announced in January that it had completed 90 percent of a map of human genes, and expects to finish the project in the summer.

MedImmune Inc. has injected another $100 million into its 2 1/2 -year-old corporate-venture fund, a pioneer in the nascent biotech sector that has invested $85 million of its original seed money. Gaithersburg-based MedImmune started its MedImmune Ventures Inc. subsidiary in July 2002 with an initial investment of $100 million and has invested in a dozen businesses, including two based in Germany. The parent company announced the second $100 million investment yesterday. "MedImmune Ventures has been successful .... in providing us with a window into new and innovative products and technologies being developed by exciting young biotech companies," Wayne T. Hockmeyer, the venture unit's president and chairman and former chief executive officer of the parent company, said in a statement.

When it comes to biotechnology startups, venture capitalists typically cash out when the new company goes public. Buying that newly issued stock, however, can be risky for investors. "Usually, VCs make three to five times their money, and the public sees their money going down the drain," said Alan G. Walton, senior general partner at Oxford Bioscience Partners in Westport, Conn. Nowadays, stocks sold in initial public offerings might not be so risky for the public, Walton noted. That is because the market value of newly public biotech companies is so low that it is the venture capitalists who lose money on the IPO. The difficulty of taking companies public, especially at values they find attractive, has become a lament of biotech venture capitalists, and it is forcing changes in their strategies.

To many attending last week's meeting on plans for a biotech park north of the Johns Hopkins medical campus, what was most striking was the residents' reaction. The mostly measured response - an apparent indication that serious action is needed if the decayed area is to be revitalized - has given rise to cautious hope that the city's preliminary plan could gain broad community acceptance. "People didn't go away angry, they went away talking," state Del. Hattie N. Harrison, a Baltimore Democrat and a supporter of the project, said after a two-hour meeting at an East Baltimore elementary school.

A top executive at the Gaithersburg drugmaker MedImmune Inc. has left - the latest change for a company some view as a prime takeover target. In a filing yesterday with the Securities and Exchange Commission, the company said it had agreed to terminate without cause the employment of Armando Anido, executive vice president for sales and marketing. Anido did not return a phone call to his home. "Armando plans to spend more time with his family and to pursue other opportunities," MedImmune spokeswoman Jamie P. Lacey said.

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.

When a judge ruled this summer that Advancis Pharmaceutical Corp. had to change its name because it was too similar to another company's, it was a significant setback. But it offered a chance for the Germantown drugmaker to do better. "One of the things that is important to us is to have our own unique identity here, and this gives us an opportunity to do that," said Edward M. Rudnic, Advancis' chief executive. "There's an opportunity to make us a little more unique." While biotech and pharmaceutical companies have come up with some creative titles for their drugs, they typically pick business names that make them sound like one of the pack.

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.

From a makeshift stage on a vacant lot in the heart of East Baltimore, officials stressed two themes yesterday at a celebratory announcement of key agreements to make a proposed biotech park a reality. One was the promise of the project - which could create 8,000 jobs and hundreds of units of new and rehabilitated housing - to transform the disintegrated area around the Johns Hopkins medical complex into a vibrant community that is an asset to the entire city. The other was the difficulty in forging agreements on the makeup of a board to oversee the park's development, to fairly compensate residents who will have to be relocated and to ensure that the mostly poor, black community benefits from the project.

Billionaire investor Carl C. Icahn has bought 2.8 million shares of MedImmune Inc. stock, a 1.2 percent stake that's large enough to fuel speculation that Maryland's largest biotech company is headed for a shake-up. New York investment group Matrix Asset Advisors, which owns about 1.7 million shares of MedImmune, or about 0.7 percent of the company, has been pushing for the Gaithersburg-based company to be sold. In a letter sent to MedImmune's board of directors Tuesday - the third of its kind - Matrix President David A. Katz said he was concerned shareholders were suffering "because of management's inability to deliver on its guidance and proffered expectations."