Mississippi biotech startup moves to Baltimore
Firm saw survival at stake for its cancer-stopping technology
(Left to right) Nick Hammond, chief technology officer; Ken Malone, CEO; and Srinivas Rapireddy, research scientist, talk in Ablitech Inc.'s new lab. (Kim Hairston, Baltimore Sun / February 15, 2012)
Ablitech Inc.'s funding was slowly drying up, and it couldn't find new sources in Mississippi. If the company stayed, it would wither away. The only option left for Ablitech, they decided, was for the fledgling company to move.
"We called our shareholders together and said, 'Look, if we stay here, we're going to die,'" Malone recalled recently.
For months, Malone and one of the firm's co-founders scoured the East Coast, from North Carolina to Boston, for a new home. They chose Baltimore.
Ablitech's choice this year was a modest win for the still-growing University of Maryland BioPark on the west side of downtown, where about 500 people work. The company brings only a handful of jobs, and its cancer-stopping technology is years — and millions of dollars — away from animal and human trials, let alone commercialization.
Ablitech's short history — it began in 2006 — shows how states and universities have used federal and state funds to help launch small biotech companies and encourage private investment. But as these startups grow, they sometimes need to move to other parts of the country, to be near investors, major customers and industry peers.
Ablitech's choice shows that startup companies outside the region are noticing the young Baltimore research park, officials there said. Ablitech moved there from farther away in the United States than any other tenant, BioPark officials say.
The BioPark, which opened in 2005, now has 20 small companies spread among two buildings. The University of Maryland's long-term development plan for the research park includes several more buildings on the campus.
The park hopes to continue to attract small companies such as Ablitech as they grow. James L. Hughes, the BioPark's vice president and chief of enterprise and economic development, said the university has been striving to build a research park with its own system of services, talent, and office and lab space.
"Six years ago, we would've just given them office space and our university connections," said Hughes. "Now, it's all that, plus the 20 other companies we have here."
The state has a long-term development plan for the biotech industry, anchored in Baltimore by the University of Maryland and the Johns Hopkins University. Three years ago, Gov. Martin O'Malley unveiled a plan to spend $1.3 billion to fuel the industry through 2020.
But for now, the BioPark — together with a similar Hopkins effort in East Baltimore — is smaller than the biotech clusters in Boston and California. The two Baltimore parks, however, complement a larger cluster of more established biotechnology companies in Montgomery County, state officials said.
Many small biotechs rely heavily on federal research dollars to fund their early growth, but they also need outside investment to propel them.
Venture capital investment, which had flagged during the recession, is on the rebound. Nationally, investment in biotech has expanded significantly since the mid-1990s. In 1995, nationwide investment totaled $747 million. Last year, biotech companies attracted $4.7 billion in venture capital — up from $3.9 billion in 2010, according to the National Venture Capital Association
A lot of that capital and growth has been concentrated in places such as Boston and San Diego, which have decades-long records of scientific research and commercialization.
Maryland has tried to keep pace and, by some benchmarks, is doing well in science and technology. The Milken Institute's State Science and Technology Index, which ranks states' capacity to turn science and technology resources into industries and jobs, ranked Maryland No. 2 in 2010, behind only Massachusetts.
Mississippi, where Ablitech started, ranked 48th.
Peter Abair, director of economic development and global affairs at MassBio, a biotech trade association in Massachusetts, said he routinely talks to small biotech startup companies that want to move to Boston from other states where the industry is less developed.
These companies typically seek to be closer to potential investors, customers and the large talent pool connected to the major universities in eastern Massachusetts, he said.