2009 file photo Hitesh Batra works in a laboratory at United Therapeutics of Silver Spring, one of Maryland's more successful bioscience companies.

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2009 file photo Hitesh Batra works in a laboratory at United Therapeutics of Silver Spring, one of Maryland's more successful bioscience companies.

 

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Related story: Maryland relies on strategy of organic growth for its bio-cluster

A decade ago, Maryland's chief competition in the bioscience industry came from the coasts: New York, New Jersey and Massachusetts on the East and California on the West.

Since then, a crop of emerging biotech clusters has started to make its mark, hailing from the Midwest and farther south into Texas and Florida.

As these new competitors seek their place in the market, Maryland's state officials and business executives hope to maintain and expand its biotech presence through a strategy of organic growth.

“We're attempting to drive our startups and small businesses to the next level of maturity to become venture capital-ready,” said Judith Britz, executive director of the Maryland Biotechnology Center, an arm of the state's Department of Business and Economic Development.

Suburban Maryland, combined with Washington, D.C., ranked fifth among the nation's nine established life sciences clusters in a report issued by real estate consulting firm Jones Lang LaSalle of Chicago. Boston, Mass. ranked No. 1.

The report ranked the clusters on the following criteria: high-tech research and hospital/medical employment; science and engineering graduate students; National Institutes of Health funding; venture capital funding; percentage of gross domestic product devoted to research and development; and academic and research institute facilities.

While Britz lamented the report's lack of focus on the Baltimore region's bioscience sector, she said such reports are useful for looking at the state's competition and figuring out how to “stay ahead of the game.”

The report also listed seven emerging clusters, in Atlanta, Chicago, Denver, Florida, Houston, Indianapolis and Minneapolis.

But labelling these emerging clusters as Maryland's new competition might not be so cut and dried, because biotechs tend to weigh many factors when deciding where to locate, said Jerry Parrott, spokesman for Human Genome Sciences, one of Maryland's biotech giants in Rockville. Parrott also is senior adviser to the Maryland Life Sciences Advisory Board, whose chairman, H. Thomas Watkins, is CEO of Human Genome Sciences.

Core competencies

“It's amazing how many states are getting involved in the biotech space,” Parrott said. “It's really important that a state first take a look at its core competencies and build from that. We have wonderful assets here in Maryland.”

About half of the state's 500-plus bioscience companies focus on therapeutics, with one-quarter focusing on research and the rest concentrating primarily on stem cells, nanotechnology and other products, Parrott said.

“When you have a base like that, heavily used to research and development, it tends to be a younger industry. That's a phenomenal place to be sitting,” he said, speaking to Maryland's potential.

Biotechs typically spend 10 to 15 years and an average of $1.3 billion getting their products to market, Parrott said. “It takes longer to get there, but when you do get there, it's an enormous potential for growth.”

Human Genome Sciences recently started realizing that potential with the U.S. Food and Drug Administration's approval in March of its lupus treatment, Benlysta. Watkins has said its sales could reach billions of dollars.

Growing a cluster

The Jones Lang LaSalle report lauded Maryland's maturing industry as “ripe for acquisition by major pharmaceutical companies.” In fact, on Thursday, Amgen of California agreed to acquire Micromet of Rockville for $1.16 billion.

The report also emphasized that the state has the necessary space and property to accommodate organic growth.

The key to a biotech cluster's success is the success of the businesses within it, said Douglas A. Doerfler, vice chairman of the Tech Council of Maryland and CEO of MaxCyte in Gaithersburg.

“When a business is successful, the entire area's ecosystem is stronger,” he said. “To get this success, you need to make sure you've got the right people and the right environment, which Maryland does well at. You also need the right capital, and that's something that's getting better for us.”

“There's no secret sauce for establishing a biotech cluster,” said Fritz Bittenbender, vice president of alliance development and state government relations for the international Biotechnology Industry Organization, which Watkins also chairs this year.

Each cluster typically requires basic research at universities and colleges, a company presence that interacts with academic research, access to government funding and access to venture capital, he said.

“It's easier to attract talent where you have a concentrated cluster. Also, when venture capitalists visit, they can look at groups of companies at a time,” he said.

Ensuring continued growth involves establishing a spirit of entrepreneurship, continuing to attract talent and developing supportive public policy to foster growth, Bittenbender said.

Referring to a “continuum of bioscience,” Bittenbender said the strongest clusters balance research with emerging businesses, established businesses and nearby global pharmaceutical companies.

“The continuum feeds itself and becomes a fantastic economic development engine,” he said, adding that this is why so many states want to jump into the biotech mix.

Consistency of support

“One of the things businesses look at is the consistency of support,” said Norris Tolson, president and CEO of the North Carolina Biotechnology Center.

Maryland modeled its own biotechnology center off North Carolina's after Gov. Martin O'Malley (D) visited North Carolina three years ago.

“We're happy to steal good ideas,” Britz said. “We aspire to be the North Carolina center's size.”

North Carolina's biotech cluster in Raleigh and Durham, which includes its Research Triangle Park and pharmaceutical giant GlaxoSmithKline, was ranked ninth in the new report. The state has 535 biotechs and invests $100 million annually in the industry, Tolson said.

North Carolina capitalizes on its success as a vaccine developer, with a strong manufacturing base, he said.

“We put a lot of emphasis into growing homegrown businesses,” Tolson said.

Looking to France and Asia

Maryland's growth strategy also includes pursuing the international market.

Britz's center already has entered into memorandums of understanding with foreign clusters, such as one in France that focuses on cancer research and the National Cancer Institute in Bethesda. She said the center is looking into business-to-business meetings, ways to export biotech products to France and the potential for attracting French businesses to the massive U.S. medical market. To this end, the state also is exploring regulatory programs to prepare foreign biotechs for doing business in the state.

Maryland's landing of a $40 million Chinese company's contract to build a 443,000-square-foot facility in Rockville could also bear more fruit should that company, the Tasly Group, gain FDA approval for its herbal medicine treatment, Britz said. The contract resulted from O'Malley's trade mission to China last year.

Approval for herbal treatments could also encourage approval for the traditional Indian Ayurvedic treatments that are being researched at Jubilant Life Sciences in Salisbury. The Indian pharmaceutical company announced plans to invest $20 million into expanding the facility after O'Malley's trade mission to India last year.

Programs such as the state's InvestMaryland plan to pump $70 million in venture capital into high-tech startups and its biotechnology investment tax credit are essential to tapping the capital the industry needs to thrive, Parrott said.

“For a state with limited resources in terms of population, we've done pretty well,” he said.

He also emphasized the state's need to encourage technology transfers from federal and academic laboratories, saying Maryland has done a good job of fostering communication in this area.

“We can always be doing more,” Parrott said.

lrobbins@gazette.net