Biotech & Health

BioHealth Priority Campus: What the New Zoning Law Means for Biotechs in Montgomery County

MBS Staff
Councilmember Friedson speaks at United Therapeutics urban headquarters campus in downtown Silver Spring.

Councilmember Friedson speaks at United Therapeutics urban headquarters campus in downtown Silver Spring.

Montgomery County leaders gathered Wednesday at the headquarters of the largest biotech in the Washington, D.C. area to hold a press conference championing an improved regulatory process focused on luring large investments from biotech companies.

At the urban campus of United Therapeutics (NASDAQ: UTHR) in downtown Silver Spring, councilmembers Andrew Friedson, Hans Riemer and Tom Hucker as well as business leaders from around Montgomery County celebrated the unanimous approval of Zoning Text Amendment 21-09, better known as the BioHealth Priority Campus zoning amendment.

Friedson initiated the BioHealth Priority Campus zoning measure to keep the momentum going on the County’s biotech industry growth that has accelerated in the last couple of years.

According to some reports Maryland is ranked in the top five biotech regions in the country — with a strong cluster in Baltimore and Montgomery County the epicenter in the D.C. area — but there’s stiff competition from hubs such as several in Massachusetts and California, racing to fill office space and lure headquarters.

Riemer, Chair of the Planning, Housing Economic Development Committee lives in the area with his family, including his mother-in-law in the residential building across the street from the United Therapeutics headquarters.

Riemer said Montgomery County has put in place an array of initiatives specifically trying to figure out how to leverage the NIH (National Institutes Of Health) and FDA (Food and Drug Administration) headquarters campuses within the County.

“These are our Harvard, our MIT, our, you know, Caltech. We may not have those kinds of universities here, but we have that kind of research. We need to figure out how to leverage that and we have to support entrepreneurs who are creating inventions in those labs.”

The County maintained a satellite campus of Johns Hopkins University in North Rockville, but it was announced before the County’s accelerated growth in 2019 that the University would end much of the learning and research operations there.

The university's medical arm has since moved forward with the development of the Belward Farm which is less than a mile west of its former teaching location. Plans were approved to build a 126,200 square foot medical office and surgery center there.

6,857 jobs were lost in Montgomery County between July and December, while northern Virginia and Washington, D.C. were gaining jobs, according to Hucker.

Although Montgomery County’s biotech industry hasn’t reached tier one status, it can still lay claim to some bragging rights. 

Thomas Kaufman, senior director of corporate real estate at United Therapeutics attended the press conference and told the story of how the company’s headquarters site changed from an underutilized County-owned parking lot to a world-class campus today.

“This area was not a beautifully landscaped plaza with the crescent building behind it. It was an underutilized surface parking lot owned by Montgomery County. It looks like what it is today only because of the shared vision and a partnership that Montgomery County had with United Therapeutics. And through that shared vision and partnership this underutilized asset,” Kaufman said.

“This old surface parking lot has grown into a world class campus, one that we're all extremely proud of. And that partnership has fielded hundreds of jobs, all of which pay a living wage at least $75,000 per year, bring 10s of millions of dollars of tax revenue into the coffers of Montgomery County and most importantly, it's saved and sustained thousands of lives.”

United Therapeutics is one of the most profitable biotech’s in the world and the largest measured by market capitalization with a headquarters in the Washington, D.C. area. It focuses on pulmonary lung treatments and is on the verge of solving one most pressing matter plaguing the medical industry, the organ donor problem.

United Therapeutics urban headquarters campus in downtown Silver Spring. Copyright Montgomery Business Scene

Image: United Therapeutics urban headquarters campus in downtown Silver Spring.

It recently made medical history by transplanting a manufactured and genetically modified pig heart into a patient at the University of Maryland Medical Center in Baltimore. The measure was taken to manufacture the heart due to the high rate of rejection by conventional means. More than a month after the surgery, the patient has reached a milestone with their new heart and is in good condition.

While United Therapeutics’ main headquarters is in Silver Spring, it’s co-located with a site in the Research Triangle Park in North Carolina, another growing biotech hub that competes with Montgomery County.

Subsequently, it could come down to a choice between the two locations for an expansion that will encompass cutting-edge technology involving organ manufacturing and 3D organ printing.

And with over $3.5 billion in cash and cash equivalents in its coffers — the company led by Chairperson and CEO Martine Rothblatt — certainly has its choice of selection sites to make a strong investment, including those in Silver Spring where it built the world's largest net zero, environmentally friendly campus according to several reports.

Nevertheless, the United Therapeutics campus in Silver Spring is a shining example of what the Montgomery County government is hoping to see more of.

That withstanding, the BioHealth Priority Campus zoning measure is designated to help tip the scale in Montgomery County’s favor when it comes to biotech infrastructure and real estate development.

BioHealth facilities, which are 150,000 square feet or larger, or existing BioHealth facilities expanding by 50,000 square feet or more will cut their application submittal to approval time from 600 days to 160 days or from 18 months to less than six months. A 75 percent reduction according to Friedson. It would also remove sketch and preliminary plans from the planning process.

United Therapeutics has already filed plans with the Montgomery County Planning Department for a 65,000 square foot expansion. On site, demolition of several structures has already taken place, and the new facility would qualify for the new zoning measure and add to the 400,000 plus square foot campus.

Exactly what the zoning measure is trying to incite happened in January when Horizons Therapeutics signed one the biggest private leases in the D.C. area. The newcomer to the region leased an entire 200,000 square foot building in North Rockville.

Modifications to previously approved plans quickly passed through to planning board approval. The lease kicked off construction of the building leaving only two office buildings left at the Alexandria Center at Traville Gateway, which is owned by Alexandria Real Estate Equities, Inc.

Other biotechs are already showing eagerness to get plans approved as soon as possible. Gaithersburg-based Novavax (NASDAQ: NVAX) made national headlines in 2020 at the start of the COVID-19 pandemic. It received a huge cash injection from the Bill and Melinda Gates foundation backed CEPI and joined a handful of companies (including big pharma) as part of Operation Warp Speed.

Novavax received over $2 billion in investment from different groups to develop a COVID-19 vaccine using its proprietary system. Fast-forward two years later, and the company that was on the verge of collapse and worth little more than $100 million is now worth over $6 billion today. Furthermore, it’s won approvals from around the world for its protein-based COVID-19 vaccine, the first of its kind in many countries.

Despite the company's stock performance of late, revenues in 2022 could cross over $6 billion. Demand could outstrip supply and the company needs additional space. That’s why last year it filed for and won approval from the City of Gaithersburg for a campus expansion that would encompass close to 600,000 square feet at build-out. The company led by CEO Stanley C. Erck is also has several treatments in its development pipe-line, including an influenza vaccine and a COVID-Flu combo vaccine.

The Baltimore-Washington, D.C. biotech region held 11,952,556 square feet of lab/R&D space with a vacancy rate of 1.9 percent, according to a 2021 report by CBRE. The areas in the report included Montgomery and Frederick Counties and the Baltimore region.

Ben Wu, President and CEO of the Montgomery County Economic Development Corporation (MCEDC) said there is an immediate need of an additional two million square feet of laboratory space in the County to meet demand.

“Montgomery County’s life sciences industry is considered one of our ‘opportunity to win’ industry sectors, and even with our recent considerable life sciences growth that we've had in success, it's really imperative that we continue to maintain the industry as an economic development priority. Otherwise, we risk squandering our leadership, and also decelerating our efforts to continue increasing private investment.”

Friedson noted that Montgomery County cannot rest on its laurels if it is going to compete regionally or nationally. “Biohealth companies have choices, a lot of choices as to where they locate, we need to put out the welcome mat and send the message that if you want to invest in Montgomery County, we want to make it as easy as possible for you to take root here, for you to invest here, and for you to innovate.”

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