Biotech

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.

A plan to build a sprawling $800 million biotechnology park adjacent to Johns Hopkins Hospital has some East Baltimore residents worried that they will not be able to afford to buy new homes in the area despite the roughly $150,000 they will receive for homes that will be demolished to make way for offices, shops and residences. East Baltimore Development Inc., a nonprofit organization created by the city to manage the project, has promised to come up with money from an equity fund and specially tailored mortgage loans to help residents buy new houses, which are expected to have a starting price of $250,000.

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.

Dutch company Qiagen NV likely agreed to buy Gaithersburg's Digene Corp. over the weekend in a $1.6 billion deal for one main reason: to get its hands on the local company's HPV Test, which detects a cancer-causing virus. The acquisition puts Qiagen at the forefront of what analysts are calling one of the hottest areas in biotechnology. Known as molecular diagnostics, it is a relatively new discipline that uses genetic and protein information to better diagnose infectious diseases and cancer or predispositions toward them.

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.

The idea, born as leaders at Goodwill Industries of the Chesapeake brainstormed ways to expand training programs, was simplicity itself: Let's go where we're really needed. Translating inspiration into action has proved trickier than anyone expected. It's not that Goodwill couldn't figure out where to go. It quickly settled on ZIP code 21223, a high-crime, low-employment swath of Southwest Baltimore that's largely south of U.S. 40. It's not that Goodwill couldn't decide what to do. The nonprofit resolved to bring a fairly modest number of jobs that would serve as a training ground for local youths, who could then move on to other employment.

When MedImmune Inc. agreed to be purchased by AstraZeneca PLC over the weekend, the state was served notice that it will essentially lose its flagship biotech - the one officials have relied on for years as a selling tool to draw similar businesses. The Gaithersburg company's profits and high-profile products (FluMist and blockbuster treatment Synagis for babies) have led governors to herald it as an industry leader, mayors to praise the jobs it provides and economic development leaders to tout MedImmune as the example all biotechs should follow.

MedImmune is the only Maryland biotechnology company to develop a blockbuster drug, establishing itself among the upper tier of the industry. It also spread around its money and influence to help other Maryland companies get started. Through its venture capital arm, MedImmune Ventures Inc., the company has invested $152 million in 16 companies, three of which are in Maryland. A fourth company, Micromet Inc., is moving its U.S. headquarters to Bethesda this week from Carlsbad, Calif., because of its close relationship with MedImmune.

London's AstraZeneca PLC said yesterday that it will pay $15.6 billion in cash to acquire FluMist developer MedImmune Inc. in a deal that highlights how far the pharmaceutical industry is willing to go to shore up its future by tapping into biotechnology. The $58-per-share price tag is the highest paid for a Maryland-based company. And it's significantly more than most investors had predicted when MedImmune, whose headquarters is in Gaithersburg, announced this month that it was considering a sale.

Until recently, Amgen Inc. was still considered one of the biggest success stories of the fast-growing biotechnology industry. Now, some analysts are comparing it to a lumbering, stumbling pharmaceutical giant that leans too heavily on an aging product portfolio. A series of setbacks, some unexpected and some perhaps self-inflicted, pose the greatest challenge in the company's previously charmed 27-year history. And some crucial events in coming weeks could make clearer whether the company has simply hit a stretch of "choppy water" - as its chief executive contends - or, as some analysts say, the company's best days may be behind it. "The barrage of bad news that's come out on Amgen in the past 60 days is absolutely unprecedented in the biotech sector," said Mark Schoenebaum, a biotechnology stock analyst at Bear Stearns.