Biotech executives want tax laws revised
If the state wants to attract new biotechnology companies and keep the ones it has, say biotech company chief executives, it better take a hard look at its tax laws.
The CEOs are arguing that they should get the same exemption for laboratory equipment that other companies get for manufacturing equipment. Hans Mueller cites his own company, Nova Pharmaceutical (now Scios Nova), as an example. For the past three years, Nova has paid about $340,000 a year in personal property tax on its laboratory equipment. In comparison, he says, General Motors pays no tax on its manufacturing equipment.
"For a company that is basically in research, that is a lot of money," he says. "This is counterproductive. . . . If you tax the companies on their most vital tool, then they are not going to locate here."
While the state tax code exempts manufacturing from the personal property tax, local jurisdictions can give a business a tax credit for research and development, according to Dean Kitchen, of the state's assessment and taxation department. The personal property tax is set at the same rate as the real estate tax.
Biotech executives say that Maryland's tax code was written to attract traditional manufacturing businesses but is now penalizing a sector seen as a future economic powerhouse.
The Greater Baltimore Committee and the Montgomery High Tech Council have formed a committee to study the current law and propose legislation for the Maryland General Assembly to consider next session.
Ronald A.J. Wilson, partner in charge of high technology at the Baltimore office of KPMG Peat Marwick, said the group will compare Maryland's tax structure to that of eight other states that have a core of biotechnology or high-tech businesses, including Massachusetts, North Carolina, California and New Jersey.
Massachusetts has a lot more exemptions across the board than Maryland, he said. "I think we are getting a reputation as a bad tax area," he said.
The committee, Mr. Wilson said, will try to convince the legislature that some measures need to be changed to make the state competitive.
UB business school starts new program
The University of Baltimore's Merrick School of Business has just announced it is setting up a program to help mine the wealth of technical expertise in Maryland's 70 federal laboratories.
MBA students at the school will be put into groups of three or four and matched with inventors in the laboratories. For three semesters, a group will work with an inventor to determine whether there is a market for the new technology. If there is potential, then the team will help get the technology licensed and possibly help found a new company.
2 named to board of Columbus center
The Christopher Columbus Center of Marine Research and Exploration, which has to raise $17 million from the private sector to complete its $160 million center in the Inner Harbor by 1994, wants to increase the number of private business people on its board of directors.
The board is expected to double in size, to 22, by the end of the year. Two new appointments include Freeman Hrabowski, interim president of the University of Maryland Baltimore County, and Robert Keller, executive director of the Greater Baltimore Committee. The board manages the non-profit center, which will house a marine research facility and marine archaeology center. Adheron Inc. of College Park says it has licensed a collection of marine bacteria and enzymes from the University of Maryland and formed a subsidiary, Marizyme.
The company's president, David Manyak, said the rights to a set of enzymes that have the capacity to survive in extreme temperatures may have the most potential in the near future. These enzymes, for instance, might be valuable for industrial uses, such as additives in laundry detergents, or to help in the process of tanning leather.
Oppenheimer reopens Global Bio-Tech Fund
The Oppenheimer Management Corp. has reopened its Global Bio-Tech Fund to new investors.
Oppenheimer closed the fund last year when the market for biotechnology stocks became increasingly speculative. But the company believes a market correction makes it a better opportunity for investors.
In 1991, the Global Biotech Fund's total return was 121.1 percent, making it the best performing mutual fund in the nation, according to Lipper Analytical Services. To date this year, the Oppenheimer fund is down 34.61 percent; the only other exclusively biotech mutual fund, Fidelity Select Biotech, was down 21.53 percent, according to Morningstar Mutual Fund, which tracks fund performance.
The $129.6 million Oppenheimer fund has invested in several Maryland biotech companies, including Univax Biologics Inc. and Genetic Therapy.