Biotech companies see promise in state initiative

Executives praise O’Malley proposal to expand current investment program to $1.1B

‘‘It’s been a great program for us and a number of other biotechnology companies I know of,” Zug said. ‘‘It has mitigated some of the risk of investing in biotechs and helped gain a greater pool of investors.”

Sequella, whose lead drug candidate, SQ109, targets tuberculosis and is in Phase I clinical trials, has raised more than $2 million from investors directly through the credit program over the past two years, he said. ‘‘We leveraged the capital we raised through the program to raise additional capital,” Zug said.

The comprehensive nature of the Bio 2020 Initiative was the right approach to help Maryland gain ground against the few states that are ahead in the industry, Zug said. The plan also calls for forming the Maryland Biotechnology Center, expanding the business incubator program, and increased funding for stem-cell research, nanotechnology, venture and other programs.

‘‘Sequella may not benefit from all parts of the program,” Zug said. ‘‘We don’t work on stem cell research, but that attracts more scientists and helps the overall industry.”

Stem cell research, which O’Malley wants the state to continue funding with at least $20 million annually, has had a substantial impact on research at Johns Hopkins University in Maryland, said Stephen Desiderio, a professor of molecular biology and genetics and director of the Institute for Basic Biomedical Sciences at Hopkins.

Up to legislature

It’s now up to the legislature to follow through on the plan, said Steve Bende, president and CEO of Rockville early-stage biotech Bacilligen, which is developing products to treat cancer and infectious diseases. He was a member of three working groups that made recommendations to the Maryland Life Sciences Advisory Board. O’Malley’s initiative is based on early recommendations from that panel, which started working on a statewide biotech strategic plan last fall and plans to issue a more detailed report this year.

‘‘This is a good time for the governor to be showing that Maryland is stepping up and moving up to the big leagues,” Bende said.

John Holaday, former CEO of Rockville biotech EntreMed and now managing director and CEO of QRxPharma, a biopharmaceutical company based in Australia that has a Maryland office, agrees. Some other states have put more effort into helping their biotech industry, but this plan will put Maryland alongside those states, he said.

A report released late last year by Sage Policy Group, a Baltimore economic and policy research consulting firm, says Maryland’s biotech industry ‘‘may already be number one in terms of the size of its broadly defined bioscience sector.” That report combined state and federal government facilities, such as the National Institutes of Health in Bethesda, along with university research institutes and private biotech companies.

Maryland’s bioscience sector generates some $29.2 billion in annual economic output and $11.2 billion in wage income, according to the Sage report. The average job supported directly by the state’s life science industry pays $108,000.

A report by Ernst & Young that reviewed significantly sized companies last year ranked Maryland fourth behind California, Massachusetts and North Carolina.

Maryland is poised to be a leader in bioscience, said Donald Fry, president and CEO of the Greater Baltimore Committee.

‘‘There is a significant industry presence in the state, [and] no other state can match our medical research capacity,” Fry said in a statement. ‘‘Our proximity to federal agencies is unique, and our population is highly educated. Gov. O’Malley’s vision for bioscience and the corresponding commitment of state resources can propel us as a top-tier state in this very competitive industry.”

O’Malley’s initiative is a ‘‘good first step toward growing all technology sectors to position Maryland as a global center for scientific discovery and innovation,” said Georgette W. ‘‘Gigi” Godwin, president and CEO of the Montgomery County Chamber of Commerce.

Other specific aspects of the plan include pumping $60 million into Maryland’s technology incubators over the next decade to leverage more private and federal investment and grow those programs by 50 percent. The Maryland Venture Fund, which provides challenge grants to startups and equity investments in more established companies, would increase by some $152 million by 2019.

The state Department of Business and Economic Development would also enter into a public-private partnership that could leverage as much as $100 million to build and renovate life sciences facilities throughout Maryland. More biotechnology parks are in the works in the state, including at Montgomery College’s Germantown campus.

Staff Writer Steve Monroe contributed to this report.