$1.1 billion Martek sale measures success of UMD-Mtech 'grads'

The latest success of Martek Biosciences, a rising-star among Maryland biotechs, began more than a decade ago in a plain, brick building on the University of Maryland campus. With a good idea and early-stage nurturing from the university's Maryland Technology Enterprise Institute (Mtech), the company has been able to grow into a major international business.

On December 21, a Dutch firm acquired Martek for $1.1 billion <http://www.mtech.umd.edu/news/news_story.php?id=5408> - the latest in a string of successes for Mtech alums. It's the second Mtech 'graduate' company to sell for more than $1 billion in the past three years. Digene Corporation, which also made extensive use of Mtech's innovative array of venture-building and biotechnology support, sold for $1.6 billion in 2007.

"The success of Martek and other Mtech graduates illuminates the path to economic growth and job creation for the state," said University of Maryland President Wallace D. Loh. "Nurturing and supporting innovators early on is a smart investment. The university's concentration of technological, business and economic expertise can make the critical difference for Maryland entrepreneurs and innovators seeking to turn a bright idea into a thriving business that can benefit many."

Martek made its mark by developing a process for producing DHA from microbial algae. It says its sustainable, vegetarian DHA is now widely used in products such as infant formula - in 99 percent of formula sold in the U.S. The company acknowledges Mtech's vital role in the company's success.

In 1985, Martek entered Mtech's Technology Advancement Program (TAP) incubator. Then, with funding from Mtech's Maryland Industrial Partnerships program, Martek turned to the university's Bioprocess Scale-Up Facility to see if its process could be commercialized.

"When I came to Mtech years ago, we had developed this fermentable algae," explains Henry "Pete" Linsert, former chairman and CEO of Martek. "We were getting into the next stage where we said 'will this stuff actually scale-up?' If it doesn't, we thought, if the economics aren't good, if it doesn't make pure products, if the organism doesn't grow, well - we're sunk. We didn't have the equipment. We didn't have the people. Mtech said let's see if we can make this work. And it did!...It all started here. It all came from this facility."

Martek had nearly a half billion dollars in net sales last year, and employed 600 people at five principal locations in Maryland. The company says it plans to maintain its Maryland facilities and workforce following the sale.

"Mtech's programs are a great example of why Maryland is a leader in technology innovation," says Governor Martin O'Malley. "The State of Maryland is committed to providing support for the entrepreneurship ecosystem that makes this kind of continued, sustainable success possible."

Successes by other Mtech graduates include:

  • Incubator graduate Paice LLC licensed 23 of its patents to Toyota (used in hybrid cars such as the Prius) and Ford during summer 2010.
  • Powerize.com was bought by Hoover for $30 million in 2000; NovaScreen Biosciences was purchased by Caliper Life Sciences for $30 million in 2005.
  • Cytonix and DataStream Content Solutions, were acquired in the past two years for undisclosed sums by Life Technologies and Dolan Co., respectively.
  • Current incubator firms have gotten $23.8 million in contracts, grants and investment since 2008.
  • MedImmune, Hughes Network Systems and Black & Decker are among the 468 companies using Mtech's MIPS program to develop major products generating more than $21.6 billion in revenue.
  • Hinman CEOs, an Mtech undergrad entrepreneurship program, produced two Inc. 500 companies: Squarespace and Lurn.

Mtech has built an innovative and comprehensive entrepreneurship "ecosystem" - a full array of programs and services to teach, encourage, support and accelerate innovation. These have served as national models and been widely adopted.

Mtech is part of a larger, comprehensive network <http://www.onestopshop.umd.edu/> of University of Maryland initiatives supporting innovation and entrepreneurship, including the Office of Technology Commercialization, Dingman Center for Entrepreneurship, Maryland International Incubator, M-Square Research Park and the Maryland Small Business Development Center.

In 2010, the University of Maryland innovation network expanded to add the new Institute for Bioscience and Biotechnology Research, a bigger bioprocess facility and the Maryland Proof of Concept Alliance.

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