A Corridor Biotech "Cluster"? It Could Happen

By Mark R. Smith



Most observers consider the Baltimore-Washington corridor a business-friendly address, home to a healthy mix of government agencies, nonprofit businesses and private industry. However, while the biotech industry is an important sector, it doesn't represent a major industry in the corridor - though most of the state's activity in that field is based in and around it.

The breakdown of companies and their locations statewide is eye-opening: a whopping 60% of Maryland's biotech firms are based in nearby Montgomery County, with 8% each in Baltimore City, Baltimore, Frederick and Howard counties. The remaining 8% are scattered throughout the region.

The good news today is that the biotech industry is "thriving," according to Robert Eaton, president of MdBio in Frederick, who pointed out his organization's latest report lists 293 bioscience firms operating in the state, with the median-sized company consisting of 14 employees. And while the corridor market is viewed by some biotechies as a slightly out-of-the-way locale, others predict it will become a pocket of growth.



Slow, Steady Growth

Exactly when is hard to say, due to the nature of the business. "This is not the type of industry that grows rapidly," Eaton said. "It tends to have longer, sustained growth, and the last couple of years have been difficult for companies searching for funding."

Even though Howard County only houses 8% of Maryland's biotech business, many more firms can claim at least some involvement in the industry. "We have about 200 companies that fall under the standard biotech Standard Industry Classification codes," explained Dick Story, CEO of the Howard County Economic Development Authority. "They range from the more visible companies," such as Martek, Metamorphix and Microcosm, "to those less visible which are out there to better humanity."

He called biotech a growth industry for the county, given its powerful economic development engines in those neighboring jurisdictions, because Howard County bridges the National Institutes of Health, the Food & Drug Administration and the National Institute of Standards and Technology, "plus a few dozen federal labs that have to do with research dollars and approvals [all in Montgomery County]. Then you look to Baltimore, home of the University of Maryland Medical System, The Johns Hopkins University and The Johns Hopkins University Hospital" (one of the largest recipients of NIH grants).

Story added that biotech's growth has been accelerated in the corridor due to bioterrorism research and development. "Many companies are expanding activities and new companies are starting to participate in homeland security projects, which is another engine for activity and investment."

Howard County is also nicely positioned to receive growth due to livability factors such as open space, good schools and low crime. Those observations were seconded by Ellen Hemmerly, executive director of the UMBC Research Park Corporation, who illustrated how some companies are starting to seek space in the corridor. "We have 11 bioscience companies in our incubator and emerging technology facility, including InVitro Technologies, which is the sixth largest biotech company in the Baltimore area," she stated, also noting a new lease with Cognate Therapeutics, "which had been looking in Greater Baltimore and Montgomery County, but decided to locate here."



Reaching Out

While the biotech development engines and highly skilled workforce in Montgomery County are a tough combination to beat, congestion there is always a concern as well. "The easier access around Howard County and Baltimore has become a good selling point, as has access to BWI Airport," Hemmerly continued. "And we have the wet lab space, combined with a wealth of medical research operations in the Baltimore area. Companies are very attracted to that. The strength at this end of the corridor includes the vast amount of medical research done at institutions like UMBC, Hopkins medical campus and the University of Maryland Baltimore, that have the potential to be commercialized."

UMBC already boasts a 165,000-square-foot technology center (the former Martin Marietta building) and has a separate 60,000-square-foot building between Route 195 and its loop road, with another of like size slated for completion in the summer of 2004, just the second of five planned for the site. There are also two other major biotech parks in the planning stages: one at UMB in West Baltimore, and a second the city is developing on the Hopkins medical campus on the east side.

As is the case in Baltimore, the cost of facilities in Howard County are substantially less, said Judy Britz, president and CEO of Cylex in Columbia, who also cited the easier traffic flow and proximity to BWI. "I think it's a business-friendly environment for life sciences and tax credits are in place, so the county has done what it can to support local business initiatives."

Ed Sybert, director of the Technology Advancement Program at the University of Maryland College Park, commented on the development of that existing nucleus of biotech business in the corridor. "The real estate community has developed well over 100,000 square feet of wet lab space in Howard County, and there are a number of companies there," he stated. "Why the biotech industry isn't as prominent there as it is in the Route 270 corridor, I don't know. But it is certainly on the map."



Taking A Risk?

He also offered the opinion that part of the reason for the pattern of biotech growth in Maryland is workforce. "Montgomery County beats Howard County simply by numbers. Biotech industry workers are already living there and want to stay close to home if a job is available," Sybert said. "They'll only drive to Columbia if they can't find a career path close to home. Otherwise, why would they want to drive an hour to work every day?"

Noting that his department is initiating a workforce training program at UMCP, he also commented that another reason for the disparity could be because "commercial real estate developers are not risk takers and believe biotech tenants will insist that such space be custom designed." However, Sybert did point to one company that he feels has a different outlook on the market, Scheer Partners in Rockville.

"In Montgomery County, there are a couple of clusters," observed Patricia Larrabee, Scheer executive director of Biotech Services. "They aren't clustered in Howard, but I think they will be in time. Columbia being in the middle of both areas should eventually mean more biotech companies would recognize that Howard County makes sense as a business location. It's also noteworthy that the Technology Development Corporation (TEDCO) of Maryland is initiating programs to connect entrepreneurs to government agencies, one of which is NSA."

Though Scheer hasn't mentioned any plans to build in Howard County to date, Larrabee hardly shut the door on the matter. "That's not to say we won't," she said. "We view the risk for funding investment dollars in facilities as an industry risk, not a single tenant risk."