Businesses face need to raise funding; Experts see consolidation this year for industry

THE BALTIMORE SUN

For Maryland's booming biotechnology sector, 1999 should be a watershed year as a select number of companies either turn profitable or move experimental drugs and diagnostics into pivotal mid- and late-stage human trials.

"Maryland's biotechnology industry should experience a lot of maturing this year," said Martha J. Connolly, biotechnology industry analyst for the state Department of Business and Economic Development.

But with that maturing will come hurdles, and a key one for some Maryland companies will be raising money for operations in a financing climate that has turned cold for biotechnology nationwide.

Connolly expects that climate to result in some additional consolidations in Maryland's biotechnology industry that mirror the marriage of Gene Logic Inc., a Gaithersburg genomics company, and Oncormed Inc., a financially struggling genetic testing business.

The two joined forces last year to create a powerhouse in a fast-emerging field known as pharmaco-genomics, which attempts to decipher the genetic basis of diseases and help drug companies determine which new compounds might best address those roots.

When it comes to profitability, the Maryland biotechnology company on everyone's radar screen this year is MedImmune Inc. of Gaithersburg.

The reason: Synagis, the company's powerful new vaccine for respiratory syncytial virus, or RSV, has just entered its first "season" of sales. Analysts expect the drug to be a blockbuster, lifting MedImmune into the black and top-tier status in the industry. Analysts estimate the drug for infants could generate $350 million a year in U.S. sales.

MedImmune's success is also a sign that Maryland's vaccine industry is poised for growth, says Connolly.

Another vaccine developer that analysts will watch closely in 1999 is North American Vaccine Inc. of Columbia, which finally won FDA approval last summer for its first product, a childhood vaccine against whooping cough, diphtheria and tetanus.

The company has begun an aggressive marketing campaign for the vaccine, named Certiva, with partner Abbott Laboratories. The market for such "combination" vaccines is a large one -- $300 million a year in the United States alone. Analysts will be watching how much of that market North American lands this year and whether Certiva sales can move the company toward profitability.

EntreMed Inc., the Rockville company attempting to develop a new class of drugs that treat cancer by cutting off a tumor's blood supply, will also be under the microscope in 1999.

Analysts won't be focusing on the company's financial results -- profitability is still years away -- but on whether independent cancer experts can verify test results showing that Endostatin, its leading experimental drug, shrinks tumors in mice.

The National Cancer Institute, which has been working on Endostatin with EntreMed under a government research agreement, said in November that scientists had not been able to produce the marked regression of tumors in mice reported by cancer researcher M. Judah Folkman. EntreMed licensed rights to Endostatin from Folkman and Children's Hospital of Boston.

Despite the NCI's questions, EntreMed says it expects to begin testing the drug in human trials this year. Those results could be the most widely and closely reviewed of any biotechnology product now in the Maryland pipeline.

And there will be plenty to watch. According to MdBio Inc., a Frederick-based nonprofit trade group, more than 25 new medical treatments developed by biotechnology companies with headquarters or research operations in Maryland are in mid- or late-stage human trials. These range from Rockville-based Intracel's experimental vaccine to prevent colon cancer recurrence to tiny Antex Biologics Inc. of Gaithersburg, which is developing a vaccine for preventing an intestinal virus that afflicts millions worldwide.

Others, like Rockville-based GenVec Inc.'s gene therapy for heart disease and Guilford Pharmaceuticals Inc.'s experimental drug to regrow cells damaged by degenerative disorders, are expected to enter clinical trials this year.

While drug development is full of unexpected pitfalls, one niche of Maryland's biotech industry expected to be on a strong growth track in 1999 will be genomics -- the study of genes and their role in regulating the body's complex systems. Maryland is emerging as a hotbed of genetic research and discovery, according to a recent report by MdBio. MdBio and other experts expect significant job growth for Maryland's biotechnology industry, which now employs about 15,000, in the years ahead.

Along with 2-year-old Gene Logic, which employs 100, growing gene research outfits in Maryland include Human Genome Sciences Inc., which will be advancing two experimental gene research-derived drugs in human trials; GenVec Inc., which will be moving a gene treatment for heart disease into human trials; and Celera Genomics Inc., a new $350 million venture in Rockville formed by gene pioneer J. Craig Venter and the Perkin-Elmer Corp., of Norwalk, Conn. There's also the nonprofit Institute for Genomic Research and the National Institutes of Health's Human Genome Project in Bethesda.

Celera, in particular, is expected to to hire as many as 200 this year, not only in traditional life science fields, such as microbiology and genetics, but also in the information science fields, says analyst Connolly. "These companies are hungry for people with computer programming, IT [information technology], and bio-informatics skills," said Connolly. "They are recruiting nationwide and paying top dollar -- $70,000 to $80,000 a year -- for good people."

Pub Date: 01/24/99

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