Human Genome Sciences Inc. hired a drug company executive as its first president and chief operating officer yesterday and handed him one of the biotechnology company's most baffling puzzles -- how to turn important genetic discoveries into profitable products.
The new president is Melvin D. Booth, 50, an accountant and executive who worked for 20 years for Palo Alto, Calif.-based Syntex Corp., most recently as president of Syntex Laboratories Inc. He also has been president of Syntex Pharmaceuticals Pacific, president of Syntex Canada and president of Syntex Dental Products Inc.
At Rockville-based HGS, which has 175 employees, he will work under William A. Haseltine, the company's founder, chairman and chief executive officer.
"Mr. Booth's strong background and experience in strategic planning, pharmaceutical sales and marketing will help the company achieve its strategic goals," especially "maximizing the commercial opportunities of our leading technology in genomic research," Mr. Haseltine said in announcing the appointment.
In a separate development, Reliance Financial Services Corp. reported to the Securities and Exchange Commission yesterday that its Reliance Insurance Co. has raised its stake in HGS to 7.2 percent of the company's stock by buying 175,000 shares at $16.42 to $23.38 a share between June 13 and July 13.
HGS was formed in 1992 to mine the discoveries of Dr. Craig Venter, a former National Institutes of Health scientist, through its close relationship with the Institute for Genomic Research, a Gaithersburg-based nonprofit corporation that is funded through HGS and headed by Dr. Venter.
"HGS is clearly working on something that is very important and is a leader in its field, but I'm watching to see if anyone can find a way to create financial value out of these important genetic discoveries by creating some form of drugs, diagnostic materials or service businesses, which are the usual ways to make profits in the health services industry," said A. Paul Boni, an analyst for New York-based Mehta and Isaly.
The ability of companies like HGS to solve that puzzle is critical to a drive in which Maryland has invested hundreds of millions of dollars to become a national center of the biotechnology industry.
That drive is based on the idea that, while Maryland has long been a fertile research center where celebrated medical and drug inventions have taken shape, it rarely has been the place where those developments have turned into manufacturing jobs.
How much manufacturing Maryland will see from HGS' discoveries remains to be seen. The company has formed alliances with British drug giant Smith Kline Beecham PLC and Japan's Takeda Chemical Industries Ltd. to exploit some of its most promising discoveries.
"Bill Haseltine is without peer in his science, and Mel Booth's experience in building drug companies and his talent for seeing and supplying markets will make him the perfect complement to Bill's science," said John Archer, executive director for health care services in the San Francisco office of Russell Reynolds Associates, the headhunter who brought the two together.
Mr. Booth, a certified public accountant, has a bachelor's degree in accounting from Northwest Missouri State University.
"My background is in building businesses, and this is a chance to work with a company that is moving forward with a very broad and exciting technology," Mr. Booth said yesterday.