Merger boosts voice of tech groups

Friday, Feb. 10, 2006

The recast Tech Council of Maryland will likely be playing on a broader national stage and be allowed to raise its voice in Annapolis and on Capitol Hill anytime it likes.

The new council has emerged from a long-anticipated merger, announced Tuesday, of the previous Tech Council, based in Rockville, and MdBio Inc. of Frederick. Both were statewide groups promoting technology.

The merged entity has 16 employees and dozens of volunteers, according to a press release. It has two divisions: advanced technology and biotechnology. The biotechnology division will be called MdBio. The advanced technology division will be known as the Tech Alliance.

The new Tech Council has a 501(c)(6) nonprofit tax status, which allows it to conduct lobbying and more advocacy in the legislature than the old group could do; both the old Tech Council and the old MdBio had 501(c)(3) tax status. A newly formed MdBio Foundation will retain 501(c)(3) status to continue MdBio’s educational and charity work.

Since 2003, merger talks between the organizations have been ‘‘on-again, off-again,” according to James Leslie, chairman of MdBio’s Board of Directors and senior vice president of search firm Kincannon and Reed of Vienna, Va. Leslie said merger talks broke down in 2004 over ‘‘retaining sufficient autonomy for MdBio.”

In recent weeks, however the phrase ‘‘unity and empower,” suggested by MdBio board member Rachel K. King, CEO of GlycoMimetics Inc., caught on in MdBio board discussions. Maryland could gain, board members realized, by eliminating ‘‘confusion in people’s minds as to who speaks for the state,” Leslie said.

The merger ‘‘will be a nice, fresh breath of air,” said Kenneth Carter, CEO and president of Avalon Pharmaceuticals Inc. in Germantown, especially on the national stage. Carter serves on the Biotech Merging Company Board of the national trade group, the Biotechnology Industry Organization of Washington, D.C.

Carter said that in his three years on that board, there was sometimes concern that Maryland had two different technology advocate organizations ‘‘that were not always able to work in consort.” Now the merged group will be able to more effectively advocate for enhancing education institutions and Maryland’s technology workforce, he said.

Aris Melissaratos, secretary of Maryland’s Department of Business and Economic Development, said merging the two groups will be synergistic and create a more effective ‘‘voice in Annapolis” by clarifying positions and using its money well in lobbying, under its new 501(c)(6) status. Although the Internal Revenue Service allows 501(c)(6) organizations to form political action committees that could help elect business- or technology-friendly candidates, Tech Council officials said there are no plans to form a PAC.

Julie Coons, president of the old Tech Council, will be CEO of the new group and serve on the boards of both the Tech Alliance and MdBio divisions. The combined resources, she said, will give the new Tech Council ‘‘tremendous efficiencies for all our members.” The Tech Council had more than 600 members at the time of the merger; MdBio didn’t operate as a membership organization.

‘‘We will continue to be all the things we were before — business networking, advancing educational programs and advancing technology,” Coons said.

Robert Eaton, president of the old MdBio, will be president of the MdBio division, as well as president of the renamed MdBio Foundation.

The nonprofit MdBio, dedicated since 1997 to advancing the commercial development of Maryland’s bioscience industry, announced in May 2005 that it would restructure itself as a biotech trade group. MdBio offered to buy the membership of the Tech Council’s life science companies for $500,000, but the council refused, said Eaton.

Eaton said he is pleased with the merger. He said it took 10 months of discussions to address all the views and opinions of all the board members of the two groups, a total of 59 members.

‘‘I think it is important that the trade association part of the organization will continue to operate traditionally as they do,” Eaton said, adding that the MdBio Foundation board is scheduled to meet today to develop its agenda.

Melissaratos said the two groups did not agree previously on details of a merger because of ‘‘personalities, the difficulties inherent in defining roles.”

‘‘This will be a good arrangement; I am very pleased,” Melissaratos said. ‘‘Now, they can go to the next level in terms of growing our high-tech companies and advocating.”

The merger ‘‘demonstrates the commitment of the Maryland technology community to collaborate on issues of interest to both information technology and biotechnology⁄life sciences companies,” John Nyland, chairman of the Tech Council and an executive at IBM Global Services in Bethesda, said in a statement.

‘‘On the biotech side, we had a fragmented approach,” Nyland said, adding that state officials had been putting pressure on the groups to merge.

Douglas A. Doerfler, president and CEO of MaxCyte Inc. in Rockville, welcomes the merger.

‘‘I won’t say they have not always been aligned, but sometimes there has not been a single voice for coordinating legislative agendas and local and national capital investment,” said Doerfler, who is on the Tech Council board and whose company has received funding from MdBio.

He said he was first encouraged when the two groups worked together in September to co-sponsor the 2005 Mid-Atlantic Bio technology investment conference in Washington, which brought together technology interests of Maryland, Virginia and the District.

‘‘It showed what a single voice can do,” Doerfler said. ‘‘A number of larger biotech and venture capital firms attended.”

Both Nyland and Melissaratos said there was no significance to the timing of the merger.

But coincidentally, several bills are pending in the General Assembly on high-profile technology issues, such as stem cell funding, biotech tax credits, and research and development tax credits for investments in manufacturing and technology. Also, BIO is putting the final touches on its annual international biotech conference for about 20,000 participants, to be held in Chicago in April.

When asked ‘‘why now?” for the merger, several biotech CEOs told The Gazette that the lines defining biotechnology are becoming blurred as it blends more and more into all fields of sciences and culture.

‘‘As technology advances, the boundaries between different disciplines of technology are blurring — such as what we are seeing with the use of nanotechnology and information technologies in health care delivery,” Edward M. Rudnic, vice chairman for biotechnology for the Tech Council and president and CEO of Advancis Pharmaceutical Corp. of Germantown, said in a statement.

‘‘It’s a logical technology progression, and it makes perfect sense to mirror that convergence by combining TCM and MdBio,” Rudnic said.

Nyland said there have been no discussions about changing the Tech Council’s sliding-scale membership dues or sponsorship prices. TCM memberships, according to the organization’s Web site, run from $6,000 annually for companies with more than 1,000 employees to as little as $300 annually for those with one employee. Event sponsorships vary widely in prices. For example, sponsors for the annual tech awards dinner pay from $2,500 to $12,000.

MdBio sells ad space in publications and Web space ranging from $500 to $5,000 per ad and also sells packages of six to 12 weeks’ worth of multiple ads and other sponsorships from $5,000 to $18,000, according to MdBio’s Web site.