When MedImmune Inc. agreed to be purchased by AstraZeneca PLC over the weekend, the state was served notice that it will essentially lose its flagship biotech - the one officials have relied on for years as a selling tool to draw similar businesses.
The Gaithersburg company's profits and high-profile products (FluMist and blockbuster treatment Synagis for babies) have led governors to herald it as an industry leader, mayors to praise the jobs it provides and economic development leaders to tout MedImmune as the example all biotechs should follow.
Even though MedImmune and its 1,700 employees will remain in Maryland, the company will become a division of AstraZeneca if the $15.6 billion deal gets shareholder approval as expected later this year.
While Maryland lays claim to the National Institutes of Health and the U.S. Food and Drug Administration, none among its 300-plus biotechs offer the kind of success story that MedImmune achieved. That makes it tough to brag among the growing army of biotech competition out there. States like California, home to biotech grandfather Genentech Inc., and Massachusetts, where big-name Genzyme Corp. lives, have long led the way when it comes to biotech leaders.
Indeed, many states now claim biotechnology as a key industry. Dozens of states have assembled teams to attract biotech companies along with the high-paying professional jobs and the lower-paying laboratory and manufacturing work they bring.
In Maryland, two city biotechnology-focused business parks are under development, state funds have been committed to stem cell research and Gov. Martin O'Malley just created a Life Sciences Advisory Board to come up with a "strategic plan" to grow the industry.
"Our state officials have generally, as far as I can recall, always been remarkably supportive of this industry," said Wayne T. Hockmeyer, MedImmune's founder and chairman. "It's something that was always a unifying theme - it didn't matter what party they belonged to - they've always been remarkably supportive."
Larry Mahan, the bioscience director at the state's Department of Business and Economic Development, said Maryland has a lot going for it with its breadth of companies, but he acknowledged that having a clear flagship makes a difference.
"A flagship definitely helps," he said, ticking off a list of criteria: revenue generation, number of employees, depth of drug development pipelines.
O'Malley's spokesman Rick Abbruzzese was reluctant to pick the next flagship, saying only that there were a "a number of biotech companies in Maryland" that could fit the bill based on their profiles, profits and potentials.
A look at the likely front runners based on interviews with people in - or focused on - the industry is summarized in the accompanying box.
tricia.bishop@baltsun.com
Biotech Contenders
The state has a breadth in its biotechnology companies and several possibilities to become the leader. See the pros and cons of the following companies on page 6D *2006 fiscal year ended June 30
Digene Corp.
Description
Develops, manufactures and markets genetic tests focused on infectious diseases, particularly human papillomavirus, or HPV, a sexually transmitted disease that can cause cervical cancer.
Founded
1987
Ticker
DIGE
Headquarters
Gaithersburg
Chief executive
Daryl J. Faulkner
2006 revenue*
$153 million
2006 profit
$8.4 million
Employees
490 as of June 30
INDUSTRY SNAPSHOT
Digene Corp.
Marketed products
HPV Test (screens for 13 types of high--risk HPV associated with cervical cancer), Rapid Capture System (allows for fast lab screening of test results), and various other detectors of infectious diseases.
Developing products
New versions of its lab technology platforms and customizing its HPV test for use in developing countries.
Flagship pros
HPV has been a major newsmaker lately as companies develop new treatments to ward it off and Digene has the only test on the market to look for particularly dangerous strains in women. The company has launched an ambitious marketing campaign, earned an annual profit and opened its doors to state officials when they want a biotech background.
Flagship cons
The company's pipeline of follow-up acts is somewhat thin, with the focus on selling more of the current products. And some analysts say an HPV test could become obsolete once HPV vaccines are in full use, making Digene's future unclear. * 2006 fiscal year ended June 30
Human Genome Sciences Inc.
Description
Biotech developing drugs from gene data
Founded
1992
Ticker
HGSI
Headquarters
Rockville
Chief executive
H. Thomas Watkins
2006 revenue
$25.8 million
2006 loss
$251.2 million
Employees
770
Marketed products
none
Key developing products
Albuferon (hepatitis C), LymphoStat-B (lupus), ABthrax (anthrax)
Flagship pros
The company advertises itself as the first official genomics business and rode that wave through 2000, when investors were pouring money into the biotechnology sector based on the hype surrounding the mapping of the human genome, or genetic code. The connection has given HGS a high profile. Its employees have also spun out new businesses. Gov. Martin O'Malley recently toured the company's offices to tout his new Life Sciences Advisory Board.
Flagship cons
After 15 years in business, HGS doesn't have a product on the market, though officials say it's in the home stretch. The company has been criticized in the past by analysts for excessive spending.
Osiris Therapeutics Inc.
Description
Adult stem cell company developing drugs from donated bone marrow to treat inflammatory, orthopedic and cardiovascular disorders.
Founded
Predecessor company organized in Ohio in 1992, moved to Baltimore in 1995. Incorporated in its current form in 2002.
Ticker
OSIR
Headquarters
Columbia, with offices in Baltimore
Chief executive
C. Randal Mills
2006 revenue
$9.5 million
2006 loss
$45 million
Employees
113 (73 full-time and 40 contract employees)
Marketed products
Osteocel, a stem cell hybrid therapy that regenerates bone
Key developing products
Prochymal (inflammatory diseases); Chondragen (knee cartilage regeneration); Provacel (heart tissue repair)
Flagship pros
Stem cells are a hot area in biotechnology right now, drawing the attention of legislators, business people and ethicists, and Osiris is among the closest to bringing a pure stem cell product to market, made with non-controversial adult stem cells instead of embryonic cells. That makes it an easy company for investors and politicians, such as former Gov. Robert L. Ehrlich Jr., to embrace.
Flagship cons
The company has had a rough decade, running through a half-dozen chief executives before Mills took over and, like many biotechs, it's still in the spending-more-than-it's-earning stage. Adult stem cells have also been called inferior to embryonic cells, which get most of the attention these days.
United Therapeutics Corp.
Description
Biotech developing drugs for cardiovascular, cancer and infectious diseases.
Founded
1996
Ticker
UTHR
Headquarters
Silver Spring
Chief executive
Martine Rothblatt
2006 revenue
$159.6 million
2006 profit
$74 million
Employees
285
Marketed products
Remodulin (pulmonary arterial hypertension); Arginine Formulations (oral dietary supplement to improve vascular function); CardioPAL and Decipher Recorders (arrhythmias and ischemic heart disease)
Key developing products
OvaRex (ovarian cancer); Viveta (pulmonary arterial hypertension); UT-15C (pulmonary arterial hypertension)
Flagship pros
It's a profitable biotech company with income rivaling MedImmune's and has a sympathetic story behind it: Chief Executive Officer Martine Rothblatt founded the company and its main drug, Remodulin, to help treat her daughter's rare and deadly lung disease. Rothblatt is a former satellite communications executive, a published author and she has a J.D., M.B.A. and a Ph.D.
Flagship cons
Though the company is doing well financially, it still manages to fly somewhat below the radar.
Martek Biosciences Corp.
Description
Nutritional supplement maker focusing on health-promoting omega fatty acid additives for infant formula and other food products.
Founded
1985
Ticker
MATK
Headquarters
Columbia
Chief executive
Steve Dubin
2006 revenue*
$270.7 million
2006 profit
$15.1 million
Employees
506
Marketed products
life'sDHA (a vegetarian source of docosahexaenoic acid, or DHA, added to infant formulas, products for pregnant and nursing women, foods and beverages); Neuromins (DHA dietary supplement); Martek's ARA (long-chain polyunsaturated omega-6 fatty acid produced from fungus and added to infant formula); and a host of fluorescent products used to detect proteins and nucleic acid
Key developing products
The focus has been on bettering the manufacturing processes for its nutritional oils and developing less expensive and more stable DHA products for use in the food and beverage market
Flagship pros
Martek makes a profit and has deals with some significant companies, including Kellogg's and a division of Coca-Cola. It also has numerous studies showing DHA improves eye and brain health, so much so that a non-Martek version of the substance helped save a West Virginia miner's life after an explosion at the Sago mine in 2006.
Flagship cons
Nutritional supplements just aren't as exciting as cancer treatments. * Martek said yesterday that it plans to restate its income to this approximate figure after changing the way it accounts for asset depreciation.
[Sources:Companies, SEC filings, Sun research]