Two biotechs are leaving Maryland: Celsion, which is developing cancer treatments, and Vanda Pharmaceuticals, which focuses on schizophrenia and sleep disorders, executives said this week.

Celsion plans to leave Columbia for Lawrenceville, N.J., by the end of September, while Vanda of Rockville expects to set up shop in Washington, D.C., by April 1.

Celsion’s move is contingent on receiving a jobs creation incentive grant from New Jersey. But the primary driving factor is access to a greater pool of employee talent and financial markets, said Jeffrey Church, the company’s senior vice president for corporate business strategy and investor relations.

Lawrenceville is between New York City and Philadelphia, near Trenton and Princeton, N.J.

“That corridor has a lot of big pharmaceutical companies, such as Merck and Johnson & Johnson, that attract a lot of talent,” Church said. “This area does not really have that kind of concentration of large pharmaceutical companies.”

Celsion has received a patent for ThermoDox, a heat-activated drug it is testing to treat liver cancer and breast cancer, and needs the kind of top-quality employees that the large biopharmaceutical companies recruit, he said. Being close to financial markets will also help attract more investors, Church said.

It’s always a disappointment to hear of companies leaving the state, said Judith Britz, executive director of the Maryland Biotechnology Center. But she said that Maryland’s biotech work force is highly qualified.

“We have one of the highest concentrations of employees with Ph.D.s in the world,” she said.

Educational institutions such as Montgomery College and other training programs are producing students at all levels with highly developed biotech skills, she said.

Celsion has completed several multimillion-dollar financing rounds lately, including one of $18.4 million that the company announced last week. The 18-employee company, founded in 1982, reported a net loss of $18.8 million last year, following a loss of $16.0 million in 2009. For the 2011 first quarter, its loss narrowed to $3.5 million from $6.1 million a year earlier.

Its liver cancer treatment is in a phase 3 clinical trial, and the company expects to apply for marketing approval from the U.S. Food and Drug Administration this year, according to its website.

The New Jersey grant will reduce state payroll taxes as milestones such as job creation are reached, Church said. While it is a “nice incentive,” company executives “were not waving white flags” in front of Maryland and New Jersey trying to get better deals from them, he said.

The 66-month lease that Celsion executives signed calls for the company to move into 10,870 square feet in Lawrenceville by Sept. 30.

Celsion has research, license or commercialization agreements with the National Institutes of Health, Duke University Medical Center, the University of Hong Kong, the Cleveland Clinic and others.

Meanwhile, Vanda signed an 11-year lease for 21,400 square feet for new headquarters at 2200 Pennsylvania Ave. Northwest, according to a filing on Wednesday with the U.S. Securities and Exchange Commission. The annual rent will be $1.63 million, with an abatement in the first 12 months. The landlord, Square 54 Office Owner, will provide Vanda with an allowance of about $1.87 million for construction to Vanda’s specifications.

Vanda expects to pay an early termination fee when it leaves its Rockville headquarters, which has about 27,000 square feet of office and laboratory space. That lease expires in 2016. In its most recent annual report, the company said its management “believes that the leased facility is suitable and adequate to meet the company’s anticipated needs.”

A Vanda spokeswoman did not return a phone message seeking comment.

The company reported a profit of $7.2 million last year, versus a net loss of $35.9 million in 2009, as revenues rose to $35.7 million from $4.5 million. It finished 2010 with $213.1 million in assets, including $155.5 million in cash and equivalents. As of Dec. 31, the company had 28 full-time employees, including 19 involved in research and development, according to its annual report.

In 2009, Vanda signed a development and commercialization agreement with Novartis for Vanda’s iloperidone, which is marketed as Fanapt for treating adult schizophrenia. Under the deal, Vanda received an upfront payment of $200 million and could receive milestone payments totaling $265 million, plus sales royalties.

Vanda also recently reported that the European Medicines Agency has accepted its application to market iloperidone in Europe.

"The submission in the European Union is an important milestone towards advancing the iloperidone franchise," Mihael H. Polymeropoulos, president and CEO, said in a statement. “This continues our efforts to expand the availability of Fanapt to markets outside the U.S. and Canada."

Under their 2009 deal, Novartis has exclusive rights for developing and commercializing iloperidone in the U.S. and Canada, while Vanda retained rights to commercialize iloperidone oral and long-acting injectable formulations elsewhere.

In other Maryland bioscience industry news:

MedImmune has starting shipping FluMist, its nasal influenza vaccine, in preparation for the 2011-12 flu season.

The Gaithersburg biologics division of AstraZeneca said it expects to distribute as much as 16 million doses of the trivalent vaccine to private health care practices, public health departments, school-based vaccination programs, military bases and others.

The vaccine is approved for people ages 2 to 49 years old.

MedImmune is one of six companies that produce and distribute influenza vaccine in the U.S.

Every year, the flu causes more than 200,000 hospitalizations in the U.S., according to the Centers for Disease Control and Prevention.

MedImmune also reported that the Food and Drug Administration has filed its supplemental biologics license application for a quadrivalent, or four-strain, version of FluMist, which it submitted early in the second quarter of this year.

Currently licensed seasonal influenza vaccines are trivalent, containing three strains (two strains of type A influenza [A/H1N1 and A/H3N2] and one B lineage strain). But as influenza B strains from two different lineages have circulated in recent years (B/Yamagata and B/Victoria) the quadrivalent vaccine contains four strains: A/H1N1, A/H3N2, and B strains from both of the B lineages.

The quadrivalent vaccine is designed to offer protection against a broader range of influenza B strains than trivalent vaccines.

Typically, seasonal flu vaccines have contained three strains recommended by the FDA's Vaccines and Related Biological Products Advisory Committee, based on expectations for the coming season.

"According to the Centers for Disease Control and Prevention, since the 2001-02 season, influenza B viruses from both lineages have co-circulated during most influenza seasons in the USA, and it has been difficult to accurately predict the correct lineage to include in the seasonal vaccine," Robert Belshe, director of the Center for Vaccine Development at St. Louis University, said in a company statement. "In fact, in the United States, in a recent 10-year interval of influenza seasons, the predominant circulating influenza B lineage was different in five seasons from the one selected for inclusion in the vaccine."

Filip Dubovsky, MedImmune's vice president of clinical development said the decision to include a fourth form of the disease could prove vital.

"We believe that the inclusion of an additional B strain in an annual influenza vaccine could provide a direct health benefit to individual vaccine recipients in the event that the correct B lineage either is not selected for inclusion in a trivalent vaccine, or if both lineages co-circulate," he said.

Sigma-Tau Pharmaceuticals of Gaithersburg will pay as much as $16 million, plus sales royalties, to Soligenix of Princeton, N.J., for developing and commercializing orBec, its candidate for treating acute gastrointestinal graft-versus-host disease, in Europe.

Under their expanded agreement, Sigma-Tau has made a $5 million upfront payment to Soligenix. It also will pay as much as $11 million in milestone payments, plus a 40 percent royalty on net sales. Sigma-Tau, a subsidiary of Sigma-Tau Group of Rome, will pay commercialization expenses in Europe, according to a joint statement.

The treatment is in a phase 3 clinical trial that will enroll about 165 patients to confirm previous phase 2 and phase 3 studies. It is intended to reduce the need for systemic immunosuppressive drugs to treat the disease. OrBec has orphan drug designations in the U.S. and Europe.

Graft-versus-host disease is a potentially fatal disease that is common among immune-compromised cancer patients who receive allogeneic stem cell or bone marrow transplants. In the disease, donor cells attack the patient's body

A Rockville biotech is among nine U.S. companies that are teaming up with Israeli partners on projects that will receive a total of $8.1 million from the Israel-U.S. Binational Industrial R&D Foundation.

Ariadne is working with BioMarCare of Jerusalem to develop a companion diagnostic test for metastatic colorectal cancer, according to a foundation statement.

The projects also will access private funding, boosting the total value $24 million.

Canon U.S. Life Sciences of Rockville, a subsidiary of Canon U.S.A., has joined the University of Maryland, College Park, in launching a new research project to develop a highly automated system to rapidly diagnose infectious diseases.

The research team is led by Hiroshi Inoue, senior fellow with Canon U.S. Life Sciences, and William Bentley, chairman of the Fischell Department of Bioengineering in the university's A. James Clark School of Engineering.

“The establishment of our relationship with Canon U.S. Life Sciences represents a major industrial collaboration for the University and the Fischell Department of Bioengineering,” Bentley said in a statement. “Leveraging our combined research capabilities is intended to advance the commercial portfolio of Canon U.S. Life Sciences while also assisting the university in its mission to create innovative knowledge and educational opportunities for its students.”

Medifocus reported that it has launched its first two clinical study sites to begin its pivotal phase 3 study of its treatment for large breast cancers.

The sites are at the University of Oklahoma Breast Institute in Oklahoma City and the Comprehensive Breast Center of Coral Springs, Fla., according to a company statement.

The trial is designed to assess the safety and improvement in efficacy, as measured by more tumor shrinkage, using the Columbia company’s focused microwave heat energy in combination with neo-adjuvant chemotherapy, over chemotherapy alone, on large breast cancer tumors.

Profectus Biosciences of Baltimore, which is developing vaccines for HIV, raised $6.8 million from a single investor in a mixed offering, according to a regulatory filing.

Neuralstem has received from the Russian Federation a patent that covers transplanting human neural stem cells to treat neurodegenerative conditions, according to a statement from the Rockville biotech.

Those conditions include amyotrophic lateral sclerosis, spinal cord injuries, traumatic brain injury, multiple sclerosis, cerebral palsy, epilepsy and Huntington's disease. Neuralstem is sponsoring the first trial approved by the Food and Drug Administration to treat amyotrophic lateral sclerosis with its spinal cord stem cells and has applied to the FDA to being a stem cell trial in chronic spinal cord injury.

"It is our goal to have the broadest worldwide patent coverage for our core technology," CEO Richard Garr said in the statement. "The granting of this patent is another important step in that direction."

Rockville nonprofit Aeras has formed a partnership with the China National Biotech Group of Beijing to develop tuberculosis vaccines in China and potentially elsewhere.

Tuberculosis is a major public health priority in China, where there are more than 1 million new cases annually, according to a joint statement.

The organizations plan to work on preclinical development, process development and manufacturing, and clinical development in tuberculosis and possibly other diseases.

"Aeras is excited to expand our relationship” with the Chinese group, said James Connolly, president and CEO of Aeras, in the statement. "The synergy created by bringing together [the Chinese group’s] considerable infrastructure and manufacturing expertise with Aeras' promising TB vaccine pipeline, as well as our clinical and technical expertise, will significantly enhance the likelihood of a new TB vaccine being developed quickly and efficiently."

The World Health Organization reported 9.4 million new and relapse cases of tuberculosis in 2009, with 1.7 million deaths.

RegeneRx Biopharmaceuticals of Rockville said it expects to begin enrolling the first subjects next month in a phase 2 clinical trial of its RGN-259 eye drops in 72 patients with dry eye syndrome.

Preliminary data from the 30-day trial is expected to be available in October.

“We have received Institutional Review Board approval for the trial, completed manufacturing of RGN-259 and placebo, and are currently preparing for enrollment of the first patients,” said J.J. Finkelstein, RegeneRx’s president and CEO.

“This is a very important clinical trial for RegeneRx that is based on a body of human and preclinical data that suggest RGN-259 could have beneficial effects in treating dry eye,” Finkelstein said in a statement. “Everyone at RegeneRx, as well as those associated with the project, are encouraged about the prospects for RGN-259 to improve the signs and symptoms associated with dry eye syndrome, a condition with limited treatment options.”

The candidate is based on RegeneRx’s novel therapeutic peptide, thymosin beta 4, which it also is developing for tissue and organ protection, repair and regeneration.

kshay@gazette.net