Hopes this warms some hearts in biotech land.
By Terence Chea
Thursday, June 28, 2001; Page E01
washingtonpost.com
Mark Herzog never thought raising money would be so easy.
The Virginia Biotechnology Association's executive director is preparing for the group's annual conference in Alexandria, and Washington area law firms are tripping over themselves to sponsor the October event.
"We were very quickly deluged with interest. One law firm told us money is no object," says Herzog, who has already been approached by multiple firms that want to be the event's top sponsor. "It seems law firms are especially aggressive in making these connections right now."
And it's not just the lawyers. In the aftermath of the area's high-tech boom, the region's accountants, headhunters, consultants and other professionals are all rushing to offer their services to local biotechnology companies. And they're doing everything they can to stand out from the crowd and grab new clients.
They're sponsoring conferences, hosting seminars and symposiums, joining industry associations, launching new services, and walking the halls of start-ups to shake hands with that scientist-entrepreneur who just might have discovered the next blockbuster drug.
As dreams of instant Internet riches turn to dust, service providers are looking for the next big thing. The collapse of dot-com and telecom ventures hasn't just burned entrepreneurs, investors and newly laid-off employees. It has also left armies of lawyers, accountants and consultants scrambling to find new work.
Only time will tell whether the biotech industry can live up to the latest hype. But nonetheless, an increasing number of tech-oriented service companies believe biotechnology is the sector with the brightest economic future, and they don't want to miss the ride up.
"The level of interest from all these folks is just amazing," says Jerry Coughter, director of biotechnology and medical applications at the Center for Innovative Technology in Herndon. "Companies are looking around and asking, 'Which sectors are growing?' And many have decided that biotechnology is the sector that's growing."
Many say it's a sign that the biotechnology industry has finally come of age. After years of costly research and development, some biotech firms are generating not only revenues but also profits. The federal government is increasing funding for biomedical research. And as tens of millions of baby boomers get older, investors anticipate a vast market for new medicines.
"It's recognition that this sector is growing and will continue to expand substantially," says Leslie Platt, who heads Ernst & Young's Health Sciences Research Compliance Group in McLean and co-chairs the Northern Virginia Technology Council's BioMedTech committee.
Many area firms are launching new biotech services or expanding existing practices. Over the past year, for example, Ernst & Young has nearly doubled the size of its life sciences tax and auditing team to 25 consultants in the Washington-Baltimore area, where it serves seven public companies and 20 private firms.
"We've identified this area as one of the major markets in the country," says Rene Salas, senior manager of the group's Mid-Atlantic division, who was transferred from San Antonio last year.
Local law offices and venture capital firms are hiring outside professionals from more established biotech clusters such as San Francisco and Boston to launch new biotech practices. In February, Heller, Ehrman, White & McAuliffe LLP hired Leslie E. Davis, a well-known lawyer who worked with biotech companies in the Boston area, to head a new office focused on companies in Montgomery County.
An Arlington company called Biotech Accelerator Inc. was formed earlier this year to help biotech start-ups secure venture capital and an array of business services, said founder Douglas Dieter.
"A big part of what we'll be doing is recruiting very early-stage companies and providing them with the wherewithal to take the next step," says Dieter, who previously founded BioMedical Sciences Group, a Baltimore company that researches biotech investments.
The growing interest in life sciences can be also gleaned from the swelling ranks of biotech industry organizations. For example, Herzog says the Virginia Biotechnology Association's membership has increased from 96 to 150 since he joined last August. More than half of the new members are service providers, he says.
The mailboxes of local biotech executives are getting stuffed with invitations to biotech seminars and symposiums hosted by area law firms eager to showcase their expertise and connections. This month, Venable Attorneys-at-Law and Patent Boggs LLP of Washington and San Francisco-based Orrick, Herrington & Suttcliffe LLP all held bioscience forums in Maryland.
"You do these kinds of things to expose yourself to a large number of prospective clients in a setting that allows you to give them some value as well as introductions," says Stuart Pape, managing partner at Patton Boggs.
Service providers want to establish relationships with these companies while they're young, in the belief that most firms choose their providers early on. Many missed out on doing business with Maryland's first generation of biotech companies, some of which have grown from scrappy start-ups to well-funded public firms. They don't want to get left behind by the next boom.
To meet the region's next biotech stars, recruiter Doug Norton regularly shows up at local events, such as the Maryland Bioscience Alliance's monthly breakfast roundtables, and drops by incubators such as the Maryland Technology Development Center in Rockville.
"It wasn't too long ago when Human Genome Sciences and MedImmune were just faces in the crowd," says Norton, an executive recruiting consultant at Korn/Ferry International, referring to two of Maryland's most successful biotech companies. "My job is to get to know these companies when they're young and struggling so that when they do become a MedImmune, we can do their work, too."
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