ATLANTA — Maryland's Life Science Advisory Board, a 15-member panel created by Gov. Martin O'Malley, on Thursday issued its long-awaited strategic plan for growing the state's biopharma industry — a 17-point program whose "one-stop shop" centerpiece has already been launched, and whose recommendations include more spending on some programs than state lawmakers have allowed in recent years.
Weeks before handing out copies of BioMaryland 2020: A Strategic Plan for the Life Sciences in Maryland from the Maryland pavilion of the BIO 2009 International Convention held here, state officials had already implemented the 28-page report's first recommendation by creating the Maryland Biotechnology Center. The center is a state agency established "to coordinate and, in certain instances, consolidate Maryland support for the continued growth and success of the bioscience and biotechnology industry in the state," according to the report.
Lawrence Mahan, the biotech center's executive director and a longtime state economic development official, told BioRegion News that the agency has begun operating with 12 staffers and two locations — its central offices at the World Trade Center building at 401 East Pratt St. in Baltimore, as reported earlier this month [BRN, May 8] and an office at 9700 Great Seneca Highway in Shady Grove within biotech-rich, suburban Montgomery County. Some staff will rotate between the offices, while others will be permanently based at one or the other location.
Unlike the North Carolina Biotechnology Center, upon which it was loosely based, the Maryland biotech center will remain part of another agency — the state Department of Business and Economic Development — though both states' bio centers depend on funds from their respective states. O'Malley and Maryland legislative leaders have agreed to spend $4.7 million in DBED funding for the personnel and programs comprising the biotech center's first full year in operation, down from the $6 million originally envisioned for FY 2010.
Business Strategies, Not Business Plans
Besides wrapping up basic logistics — "furniture is moving into offices, and some offices are getting constructed" — Mahan said the Maryland Biotechnology Center has identified its first area of action, which is the report's second recommendation — establishing the BioEntrepreneur Resource Program. The program will be designed to link entrepreneurs to investors and other sources of capital, as well as to share knowledge about core areas of the life sciences, business skills, and service providers, all tailored to the needs of life-sci companies seeking to commercialize technologies.
"My goal is to not have people develop business plans. I want them to develop business strategies, successful business strategies," Mahan said in an interview from the Maryland pavilion. "You'd be able to come in as a new company. We'd want to mentor you on the business side, and we'd say, 'What is it that you want to do? First of all, do you know who else is doing it besides you? Or, who's got the best research programs in the United States for what you need? Who's got the intellectual property? What's your funding? Who's funding your kind of product? That's usually very unaffordable to most people writing their first business plan."
The bioentrepreneur program wil also offer life-sci business owners help with finding employees and developing their skills, as well as assistance with obtaining state and local permits — the latter an effort to address a constant source of business concern in Maryland, given the home-rule power of counties as well as municipalities over planning and zoning decisions.
Developing that program will be relatively easier than carrying out several other recommendations of the report, which call for increased state spending in areas where legislators have already drawn the fiscal line as the state has struggled the past 18 months with budget shortfalls due to lagging tax collections blamed on the weak economy. They include:
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• Expanding the Maryland Biotechnology Investment Incentive Tax Credit, budgeted at $6 million in the fiscal year set to start July 1, to $24 million by FY 2020.
• Making permanent and expanding the state's R&D Tax Credit by raising the cap by $3 million, and targeting the additional amounts to life-sci companies with 50 or fewer employees.
• Expanding technology transfer and proof-of-concept efforts by the Maryland Technology Development Corp., better known by its acronym TEDCO, to $5 million per year. TEDCO should spend another $1.5 million for new personnel and $2 million to fund and monitor new patents, the report also advised.
• Increasing the state's Maryland Venture Fund to $9 million, the 2001 funding level, "as quickly as feasible," then by unspecified increments to $24 million by 2020.
• Expanding the state's nanobiotechnology initiative to $5 million from the current $2.4 million.
• Growing the state's annual budget for funding stem cell research to $20 million from the $15.4 million available in FY 2010.
The stem cell funding increase would reverse a set of three spending cuts over the past 13 months tht have brought the program down from $24 million in the fiscal year ending June 30, 2008, to $19 million, then down to $18 million, then up by $400,000, then down $3 million to the $15.4 million planed for fiscal year 2010, under the state's latest spending plan agreed to by O'Malley and lawmakers back in April.
Despite that recent history, O'Malley offered two arguments at BIO 2009 for promoting Maryland as a state friendly to stem cell research. One was the statistic that his state had spent more than $50 million on stem cell research over the past three years, a figure he cited in each of his two convention appearances on Wednesday.
"I guess there are two ways to look at it. One way is to say we've cut it. Another way is to say that in these difficult times, we've actually managed to maintain it," O'Malley said, answering a BRN question at a press briefing devoted to the stem cell summit. "I'm very proud at what our state has done over a three-year period, and I would stack us up on a per capita basis. If you do compare us to other states, you'd see that Maryland is actually fighting above our weight class."
O'Malley's second argument was Baltimore's hosting of the 2009 World Stem Cell Summit, set for Sept. 21-23 in the Baltimore Convention Center, expected to draw more than 1,200 attendees as well as spotlight the state life-sci industry's regenerative medicine segment. O'Malley will be among at least two governors set to participate in a "US Governor's Perspectives" panel at the summit; the other is Wisconsin Gov. Jim Doyle.
Stem Cell Company's $6M Expansion
The state's stem cell segment will be enhanced as South Korea-based stem cell RNL Biostar expands its US presence with its upcoming opening next month of a $6 million stem cell R&D and manufacturing facility within Montgomery County. RNL will move from the Maryland Technology Development Center incubator in Rockville, Md., to the Montgomery County-run Germantown (Md.) Innovation Center. The company will grow its workforce from the current four employees to 50 over five years, and its space from its current 800-square-foot laboratory to 10,000 square feet of labs immediately and to 20,000 square feet of labs in the new facility over five years, company executive Donna Lee told BRN.
RNL is in second phase tests for its stem-cell-based treatments, designed to fight Buerger’s Disease and osteoarthritis. Most of the jobs will be cell manufacturing technician positions that pay an average annual salary of $50,000.
Lee told BRN that after searching several East Coast and West Coast locations, RNL opted to expand in Montgomery County because of its sizeable biotech presence: More than 350 companies, plus 19 federal research and regulatory agencies, all employing about 60,000 public and private sector life sciences professionals. The county boasts that it has the nation's highest concentration of PhDs.
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Yet even Montgomery County, she added, had relatively few sites for stem cell companies, which require different equipment and cell-expansion or "culturing" facilities than can be found in traditional wet labs. "Surprisingly, the incubator space was the most state of the art," she said. "We need GMP standards. We've got to have clean room standards because we're going to be using these cells in patients."
A former DBED employee, Lee said RNL has been showered with support by the state and Montgomery County, whose County Executive Isiah (Ike) Leggett met with RNL representatives during a trade trip to South Korea last year. "I really feel like we have an entire cheerleading squad helping us with everything, from hiring people, to finding the best location, anything and all that we need to really help us grow."
The biotech tax credit will remain budgeted at $6 million annually in FY 2010 despite an effort by Maryland's House of Delegates to chop funding for the program to $4 million [BRN, March 30].
The report outlines four priorities for Maryland's life sciences effort:
• Ensure the sustained growth and competitiveness of the state's bio industry.
• Support the creation and growth of innovative bioscience companies by ensuring access to capital.
• Position Maryland for global leadership in cutting-edge areas of bioscience research and emerging and growth markets.
• Advance efforts to generate bioscience talent and develop a life sciences workforce.
The report's BioMaryland name — shared with the Maryland pavilion at this year's BIO convention — will become the brand name for the state's life-sci effort going forward, under the report's third recommendation. The report envisions "an experienced professional marketing/public relations firm" creating a campaign for BioMaryland, which would include a network of on-call volunteers called "BioMaryland Partners," and a "Leader to Leader" program to boost ties between CEOs of existing biobusinesses in the state and heads of companies considering Maryland.
Unlike O'Malley's initial package of life-sci proposals, termed BIO 2020 and announced at the BIO 2008 convention in San Diego [BRN, June 23, 2008], the BioMaryland recommendations do not prescribe year-by-year incremental increases in the program between now and 2020. The state's budget squeeze forced O'Malley to bypass the doubling of funding for the program in FY 2010 to $12 million as called for under BIO 2020, and forced the state to skip specified spending hikes in other existing programs singled out for expansion by that initiative.
However, according to O'Malley, BioMaryland will require the same $1.3 billion through 2020 that was envisioned under a revised version of BIO 2020; the initial cost estimate was $1.1 billion. Both figures purposely were set to exceed the $1 billion over 10 years now being implemented by Massachusetts through its Life Sciences Act of 2008, signed into law by Gov. Deval Patrick.
Addressing Longtime Shortcomings
In addition to growing existing economic incentives, the report recommended creating new programs intended to fix longtime shortcomings of Maryland's life-sci effort — from access to early-stage capital, to commercialization of technologies developed in the state's public and private universities. To address the latter, the report recommended establishing an unspecified number of Maryland Bioscience Commercialization Institutes.
The institutes "could be implemented in phased fashion, but would ultimately encompass laboratory facilities and research staff, access to academic and commercial clients, thus constituting a bridge between academic and commercial partners," both universities and federal research agencies, according to the report.
Under the costliest proposal, BioMaryland 2020 calls for establishing a Maryland Life Sciences Venture Capital Trust with an initial $10 million "seed investment" from the state. The trust would grow to at least $100 million in total funds for investment, with the money coming from the state Retirement and Pension System as well as private venture funds.
The report also advises Maryland to launch a $5 million Maryland Bioscience Product Development Loan Fund capable of awarding long-term working capital loans of up to $500,000 to eligible bioscience companies in later stages of developing their products and introducing them to the market.
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BioMaryland 2020 also calls for creating a third fund; the new Maryland Bioscience Workforce Skill Development Fund would award grants of up to $100,000 to train teachers and craft new curricula so that students would emerge from state schools with stronger life-sci skills. A career technical education program, Project Lead the Way, would be extended to every high school in Maryland.
Other recommendations of BioMaryland 2020, for which no cost projections were included:
• Expand the current Maryland Industrial Partnership Program beyond the state-funded University System of Maryland, to include all public and private universities in the state.
• Promote collaborations between federal research labs as well as businesses and academic institutions through small but unspecified "seed" funds to open joint facilities and enable shared use of equipment.
• Expand capital spending on new academic life-sci facilities for public community colleges, colleges, and universities.
• Help subsidize tenant costs of fitting out space for labs through existing economic development programs, such as the Maryland Economic Development Assistance Authority and the Maryland Industrial Development Financing Authority.
• Develop a new Maryland Bioscience Talent Bridge program to transition academic professionals into life-sci business careers, and make existing entrepreneurial programs more available to today's bioscience students.
H. Thomas Watkins, the advisory board's chairman, told BRN that the work of the Life Science Advisory Board is not finished despite publication of the report. "There's a lot of working with bioscience individuals throughout the state, and communicating this that we expect to do. There are metrics of things we want to accomplish. We look forward to assisting the governor in any way we can to move this all forward."
Watkins, a Maryland life-sci leader apart from the panel as the president and CEO of Human Genome Sciences of Rockville, Md., said in an interview that optimism has not been dashed by the difficulty of maintaining state funding for existing life-sci programs.
"With all of the economic challenges that the state of Maryland and other states have had, I'm very pleased that we were able to make the progress we did in the funding this year. [BioMaryland 2020] is a 10-year plan, and there are many steps to realize this plan. But we're very excited by the establishment of the Maryland Biotech Center, and the maintenance of the funding for the biotech tax credit. Those were important priorities in this year's budget," Watkins said. "We'd always like to have more money, certainly. But those two initiatives, which were in our view the most important to start right away, are moving forward."