Monday, January 01, 2007


Crop of Biotech Companies Is Large but Green

Monday, January 1, 2007; Page D02

Like e-commerce in the late 1990s, biotechnology is a hot industry today, and everyone seems to want a piece of it. Prince William County touts its George Mason University life sciences campus as a biotech magnet. Loudoun County pins similar hopes on its Howard Hughes Medical Institute in Ashburn.

The strongest growth continues to be in Maryland, particularly Montgomery County, which leads the region in number of biosciences companies. According to a survey by trade group MdBio, the number of biotech companies in the state increased by 67 percent, to 365, in the past eight years.

A separate report by Ernst & Young ranks Maryland fourth in the nation for its number of biotech companies, behind California, Massachusetts and North Carolina.

"We are living in a time of rapid economic change, and a lot of the focus is on getting the industry of tomorrow and the jobs of tomorrow," said Gautam Jaggi, editor of the Ernst & Young report. "Biotech is getting a lot of attention because of this."

A closer look at the reports, however, shows that while Maryland's biotechnology sector has grown consistently over the past several years -- the state report describes it as having reached a "critical mass" -- it is still in the formative stages.

More than one-third of the Maryland biotech companies listed by MdBio have fewer than 10 employees, the report says. The overwhelming majority have failed to make a profit, and about half have revenue of less than $500,000 a year.

Ernst & Young did not count most of the companies included in the MdBio report, limiting its list to more mature companies with some venture capital financing that are well in the process of creating a product or have one on the market already. Ernst & Young listed almost five times as many biotech companies in California as it did in Maryland.

Biotechnology experts note that Maryland's biotech industry is maturing. In 2006, there were a few initial public offerings by local biotech companies, including Avalon Pharmaceuticals and Vanda Pharmaceuticals.
"Clearly biosciences is an important driver in the state and region and there are lots of opportunities for growth," said C. Robert Eaton, president of MdBio.
-- Cecilia Kang

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