"Maryland, no doubt, has a very strong biotech cluster that's younger than ours," Abair said. "It's very research-based but probably less balanced with commercialization."

Ablitech is years away from commercialization. Moving the company to Baltimore, its founders believe, will help the company survive.

Coming from Hattiesburg, Mississippi's fourth-largest city, with 50,000 residents, Ablitech was looking for a denser, more urban environment. Malone said he wanted a location near near big-name universities and a good labor market that retains the feel of a tight-knit startup community.

Boston was too big, and the Research Triangle Park near Raleigh, N.C., was too spread out, Malone said.

Baltimore, it turned out, was just right.

Ablitech didn't receive any tax breaks, credits or subsidies to move to Maryland, according to Malone and BioPark officials. But Malone expects to apply for the Maryland Biotechnology Investment Tax Credit when the company becomes eligible.

The tax credit is a popular tool for biotech startups to encourage investors. It gives investors an income tax credit up to 50 percent of their investment — as much as $250,000.

The tax credit wasn't a major reason behind the company's move to Maryland, but it was part of what made the state and Baltimore attractive, Malone said. Other states offer similar tax incentives.

"There were other places that offered incentives, but they didn't have all the pieces we wanted," said Nick Hammond, the Ablitech co-founder who conducted the search with Malone.

Early in its life in Mississippi, the company did receive some government financing, in the form of seed funding. Ablitech was the fruit of a years-long effort at the University of Southern Mississippi and the University of Mississippi to jump-start high-technology companies with a combination of school, state and federal funding.

While Mississippi lost one of its own most promising biotech startups, Ablitech's move may yet pay off for that state. If Ablitech brings to market what it's working on — a way to turn off cancer cells and stop their replication — several local investors, the University of Southern Mississippi's research foundation and a state-based seed fund, which own minority stakes in the company, could reap a financial benefit.

That's what the University of Southern Mississippi was hoping for when it hired Malone from his job with a French oil conglomerate in Philadelphia to launch an entrepreneurship program in the sciences. Malone had graduated from the school with a doctorate in polymer science.

In Hattiesburg, Malone brought together the university's polymer science expertise with the University of Mississippi's medicinal chemistry department. The Mississippi Legislature pumped money into the push to create early-stage biotech companies.

One of the first startups to emerge was Ablitech, led by two graduate students. They had won a business plan competition and developed their first product, a biodegradable stent that lab tests showed might not be rejected in a human body.

But larger competitors had their own versions, and the Ablitech stent was too late to the market, Malone said.

So Malone and the student scientists behind Ablitech —Hammond and Lisa Kemp — shifted to a new technology that turned off disease cells, such as cancer, in early lab tests.

Called Versadel, the technology stopped the growth of cancer cells in human serum, the company said. But the company needs millions more in funding to conduct animal trials.

Ablitech had raised $750,000 from private and university investors in Mississippi, in addition to the state and federal grants it received. As Congress cut back on federal earmarks, Ablitech's federal funding tied to appropriations eroded, Malone said.

But the company received another federal lifeline, winning a $2 million grant from the Department of Defense.

Under that grant, Ablitech is working with scientists at the Army's Telemedicine & Advance Technology Research Center at Fort Detrick in Maryland to develop a way to stop the human bone growth in soldiers who have lost limbs. Even after surgery, amputees' bones continue to grow and often require more surgeries and further amputation, Hammond said.

"Currently there's no treatment for it," he said.

Ablitech's move to Maryland puts it closer to Fort Detrick and other federal agencies.

Making the move was hard, Malone and Hammond said, but rational.

Their small company is seen as a trailblazer on the campuses of Southern Miss and Mississippi. It has won business awards and received media attention. Other student entrepreneurs are emerging to launch their own medical and science-based businesses.

Moving "was exceptionally tough for me because I spent eight years helping the state and university create the physical and human infrastructure to foster the growth of tech companies," Malone said. "So I had a large personal stake in seeing it work."

But Baltimore, he said, "this is the place for opportunity."

gus.sentementes@baltsun.com

twitter.com/gussent

  • Text BUSINESS to 70701 to get Baltimore Sun Business text alerts