After years of failing to attract a big pharmaceutical presence to the state - and losing the competition for a Novartis AG plant to North Carolina last summer - it's time for Maryland economic developers to shift gears in biotechnology, according to a study being released online today.
The Economic Alliance of Greater Baltimore spent the past six months compiling data and interviewing company representatives to create the Biosciences Report, a 40-page assessment of the local industry and its growth potential (available at www.greaterbaltimore.org).
It's the first in a series of such reports the Economic Alliance is preparing to help better understand - and boost - trades, including information technology, defense and government contracting. And while the organization plans to use the documents as marketing tools, it won't shy away from defining the region's limitations, if the initial report is any indicator.
Today's report acknowledges Maryland's highly educated population and strong base of research universities and institutions. But it also says Maryland has a confusing mix of state and local bio-related, economic development organizations whose purposes aren't clear.
The report also highlights how state leaders and others don't really understand how the biotechnology market grows. And it argues that business and other leaders would do better to focus on growing companies already here instead of trying to lure new ones.
Bioscience, which embraces a range of sub-industries from drugmakers to medical device developers, got to be the No. 1 report topic less because the state claims it as a key industry, which it does, said Brad S. McDearman, executive vice president of the alliance, but more because it's among the most misunderstood.
Getting a handle on the industry is becoming increasingly important, with two Baltimore-based biotechnology business parks in development and recent losses of major companies to mergers and acquisitions. Just this year, three state biotechs have been bought - including profitable industry players such as Gaithersburg's MedImmune Inc., best known for making FluMist, and Digene Corp., whose test for a cancer-causing virus is beginning to take off.
Bioscience competition from other states also is expanding.
Nearly all states are targeting the industry as a so-called growth sector, but for the most part, they can't agree on a definition of "bio," according to the report. Also, many economic development officials here and elsewhere don't have up-to-date - or accurate - information, nor much understanding of how the market grows.
"This is a new, emerging industry, and it's constantly changing, and I think because of its nature there is just some inherent confusion that exists," said Donald C. Fry, president of the Greater Baltimore Committee, an organization of industry and civic leaders working to strengthen the state's business climate.
The Economic Alliance promotes the region to businesses and investors.
Maryland is home to the National Institutes of Health, the U.S. Food and Drug Administration, dozens of federal labs and more than 370 biotech businesses, which by most counts puts it among the top five regions for the industry. But economic and business leaders want to do better.
Still, many of them may harbor outmoded ideas that big drug companies are the key to success and snagging corporations from other biotech hotbeds is the way to go, according to the alliance.
Turns out that none of the above is necessarily true, according to the report, which cost about $75,000 in employee time to create.
For many years, states, including Maryland, have spent a good portion of their bioscience business efforts trying to land manufacturing facilities or headquarters of big pharmaceutical companies. But few of those companies are creating new divisions at new sites.
Instead, they're snapping up existing companies - such as Gaithersburg's BioVeris Corp., which was bought by Roche Holding Ltd. - for growth in their businesses. Because of that, the region should turn its attention to companies already here and those that could be, such as spinoff businesses created from university technology, the report suggests.
"I think the ideas and the energy that catalyze the growth of new companies stem organically from the region, and from a development standpoint, I tend to fall in line with those folks who feel that investing in companies who are growing in the area is a good return on the capital, versus trying to lure in companies from the outside," said Timothy E. Askew, chief executive of Baltimore's CSA Medical Inc., which creates technology that helps doctors spray liquid nitrogen onto precancerous and cancerous lesions on the body.
CSA got its start after it licensed technology from a doctor at the National Naval Medical Center in Bethesda.
The alliance report also found, among other things, that:
Biotech businesses want the state to step up its financial commitment to the industry. Maryland has committed money for stem cell research and offers smaller business grants, loans and investments through the state's Department of Business and Economic Development and Technology Development Corp.
Most businesses aren't going to leave one biotech hotbed, like Boston, to come to another biotech cluster, like Baltimore. To grab businesses, Maryland should look to those companies stranded in cities without much of a bioscience base - like Cleveland. That's where Baltimore's adult stem cell company Osiris Therapeutics Inc. moved from.
Maryland needs to stop competing with areas in Pennsylvania, Massachusetts and New Jersey and instead promote the entire region as an East Coast biotechnology corridor to rival California's on the West Coast.
James L. Hughes, vice president of research and development at the University of Maryland, Baltimore, is overseeing development of the university's BioPark, a 10-acre, 10-building business venture under construction on the city's west side. He said he has used the regional-collaboration portions of the report, taken from a draft he saw earlier, to market the area to businesspeople in Japan.
"There's kind of a balkanization of the East Coast. In a lot of people's minds, it doesn't have the same impact that California has," said Hughes, who relied on the report to show connections between the Baltimore/Washington area up through Boston.
"Companies [already] think of it as a great big region, and they're working with sources of funding and partners all up and down the East Coast. What really has lagged behind is more the economic development focus," Hughes said.
"Each state and local jurisdiction in many cases have their own [competitive focus], and this [report] helps give impetus to breaking some of that down," Hughes said. "But that's going to be tough - to truly partner with other states in a really meaningful way is going to be difficult."