A business plan for biotech park


CAMBRIDGE, Mass. - Building the proposed east-side biotechnology park may prove to be a watershed event in Baltimore's economic history.

Biotech companies have the potential to generate high-quality jobs and create a strong local capital base. Further, they often graduate managers who go on to found successive companies, amplifying the benefit.

Alarmingly, though, those involved with the project have articulated a Field of Dreams philosophy: "If you build it, they will come." They believe that once the real estate is developed, biotech companies will flock to East Baltimore in order to bask in the Johns Hopkins' intellectual glow. This is a dangerously naive presumption.

In fact, in this age of e-mail, faxes and overnight shipping, proximity to an academic medical center is of relatively minor importance to a biotech company.

Even companies in their early stages often have multiple collaborations with distant institutions. Further, many companies are accustomed to conducting clinical trials at institutions remote from their own operating sites.

In reality, biotech clusters around academic centers typically blossom from the centers' own intellectual property as scientists start up companies based on their work. This has not happened in Baltimore to the same extent that it has in other capitals of biomedical research.

Indeed, although Hopkins alone has more than 500 active licensing agreements, Baltimore City serves as headquarters for fewer than 10 bona fide biotech companies - companies developing proprietary therapeutic, diagnostic or drug discovery technologies. Adjacent counties host only a handful more.

Thus, Baltimore's biomedical research institutions are exporting a disproportionate amount of their intellectual capital from the region.

In contrast, Maryland's Washington suburbs host dozens of companies spun off from the National Institutes of Health in Bethesda and other federal installations.

Since the dearth of local spinoffs probably results from a number of entrenched factors, including aspects of institutional culture that preserve academic excellence, the proposed biotech park's developers should compensate for these factors rather than dissect them.

For example, an enterprise board composed of experienced biotech executives could screen technologies developed at local institutions, identify those that could provide the nuclei for independent companies and recruit entrepreneurs with appropriate backgrounds to organize and manage these companies.

Mayor Martin O'Malley has taken a step in this direction by appointing Jacques R. Rubin, the founder of a company that provides biotech manufacturing services, to the board of East Baltimore Development Inc. (EBDI).

But it also will be critical to involve people who have driven the development of proprietary products, which are likely to provide the basis for most spinoffs.

Given the rudimentary state of Baltimore's biotech industry, EBDI may have to import the initial group from other regions.

In addition, it is crucial that an enterprise board's identity be circumscribed from that of the main EBDI board so it can focus on business development rather than real estate development.

In order for this approach to succeed, local research institutions must also agree to facilitate the formation of start-up companies. For example, it would be helpful for the enterprise board to have a right of first refusal to technologies developed at these institutions.

The political stakes in this development gambit are as high as the economic ones.

If the park fails to foster a vibrant biotech industry, voters may view the project, in retrospect, as a ploy to "clear-cut" the area for Hopkins' benefit. This will particularly be a risk if empty space accrues and Hopkins occupies most of it by default.

If the city and its partners install the leadership infrastructure necessary for a 21st century economic base, though, everyone, from politicians to residents in communities throughout the region, may find renewed life.

Dr. Andrew H. Segal, formerly of Baltimore, is president of a biotech company in Cambridge, Mass.

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