Thrive Earlier Detection Corp., a startup company based on early cancer testing technology developed at the Johns Hopkins University, was snatched up three years ago and is now planning to move out of Baltimore.
Another startup spun from the same revered Hopkins team called Haystack Oncology was bought last year by New Jersey-based giant Quest Diagnostics but plans to stay long term in the city.
There are dollars and jobs on the line with both, not to mention the dose of prestige from homegrown companies transforming patient care. So what does a city need to tip the scales in favor of more Haystacks and fewer Thrives?
“We certainly want to grow them all here,” said Ulyana Desiderio, the Maryland Department of Commerce’s senior director of the Office of Strategic Industries and Entrepreneurship. “But let’s start with the fact that we’re pumping out these wonderful companies.”
There is agreement among industry, academic and government experts and observers that Baltimore is pretty good at the scientific discovery part and getting better at standing up real-life companies. What comes next is a work in progress affected by a mix of variables, some of which are more difficult to control.
First, the good: Hopkins and the University of Maryland are research juggernauts, the region is close to federal resources and there are a disproportionate number of highly trained scientists in the pipeline.
Desiderio also points to a stable of assistance that includes tax breaks aimed specifically at biotech investors and startups, business incubators to help steer young companies and bioparks adding needed lab space.
The city and region is more affordable for workers than other metro areas popular with biotech companies such as San Francisco and Boston.
Biotech companies also have a presence outside of Baltimore in Maryland, particularly in the Washington suburb’s I-270 corridor. That includes one of the state’s largest biotech companies with 3,500 employees, AstraZeneca, which got a foothold in 2007 when it bought vaccine maker MedImmune. AstraZeneca announced Tuesday that it would build another $300 million facility nearby to manufacture special cells needed for a new kind of cancer treatment. Opening in 2026, it’s expected to employ 150 workers.
All told, statewide there are some 3,600 life science and related companies and nonprofits. Most are small but they add up to about 50,000 direct jobs and generate billions of dollars in economic activity annually, commerce data shows. Baltimore is home to 363 of them, and about 50 focus on diagnostic and therapeutic technologies.
Further growing life science companies in Baltimore, however, has its challenges, the experts and observers say.
It’s incredibly expensive to fund development and clinical trials of products like the “liquid biopsy” cancer tests developed by Thrive and Haystack. The goal is often to be acquired by a larger company with the financial and technical wherewithal to get through the process.
But sometimes companies shelve good technology to focus on other endeavors and sometimes, like in Thrive’s case, they consolidate operations. Over time, many have clustered in the same places, including Cambridge, Massachusetts, or the San Francisco Bay Area of California, where there is an abundance of lab space, experienced labor and suppliers.
In a statement, Exact Sciences, which acquired Thrive, said it would close its 58-person Baltimore lab and office by March 31 and the work would transition to Cambridge, Massachusetts, and Madison, Wisconsin. The company, known for its product Cologuard, an at-home screening test for colon cancer, said the shift would allow the company to meet evolving demand “where we already have established operations and flexibility for growth.”
For Baltimore, the goal is to foster such a cluster of established operations here, said Matt Tremblay, CEO of Blackbird Laboratories, a nonprofit recently formed with a $100 million investment from the foundation run by the family of Baltimore Ravens owner Steve Bisciotti to shepherd promising therapies from local university labs into viable startup companies.
“We have to create a pull into Baltimore to keep companies here as they grow,” he said.
“We have to build the ecosystem, the lab space, quality of life in more parts of the city, the talent pool,” he said. “I think we’ve identified all these issues. The hard part is solving them and on a timeline we can observe.”
In the case of Haystack, founded in 2021 and bought last year by Quest, the nationwide diagnostics company already operated in Baltimore.
Dan Edelstein, Haystack’s CEO, said the company signed a long-term lease in City Garage, part of the Baltimore Peninsula development in South Baltimore. It’s building a 20,000-square-foot lab space expected to be ready in the spring.
Edelstein said the company has benefited from remaining near the scientific minds behind the company’s technology. They work in a lab led by Dr. Bert Vogelstein, a Hopkins professor of oncology and cancer researcher behind many innovations.
“We started Haystack here because there were people here with a specialized knowledge of the testing we do, and you can’t find folks elsewhere as good,” he said. “Quest had labs here, so it made sense that they’d value the team in Baltimore. Some other companies may have a different vantage point.”
Persuading more life science companies to locate or stay long term may be tough, said Evgeny Kagan, assistant professor of operations management and business analytics at Johns Hopkins Carey Business School.
He cited those established clusters in other cities, which will maintain their advantage with lab space, labor and suppliers. They also have well-known reputations as biotech centers and are places people want to live.
Others pointed to taxes, incentives and even more in-the-weeds considerations specific to life sciences. Diagnostic companies like Haystack and Thrive will ultimately be paid to run blood tests in their labs, and reimbursements vary by state from one of the biggest payers, Medicare, the federal health program for seniors and some people with disabilities.
Thrive, Kagan noted, was bought in early 2021 during something of a coronavirus pandemic biotech bubble. A lot of money flowed particularly into diagnostics and therapeutics. Exact’s up to $2.15 billion expenditure was a whole lot more than Quest’s $450 million purchase price for Haystack, and the company may be looking to the consolidation for significant savings. (It’s not you, Baltimore.)
Kagan also said unlike other tech industries, biotech workers are largely expected to work in a lab in person. Baltimore and the state may have an easier go developing an industry related to artificial intelligence. On that front, Hopkins is currently building a new AI center that will hire hundreds of academics and hundreds more staff to develop capabilities that can be spun into startups that are more likely to stay around because all one needs “is a good Wi-Fi connection,” Kagan said.
The Greater Baltimore Committee also sees that potential. It helped pitch the region for a federal designation as a tech hub, allowing officials to compete for millions in funding to spur investment in emerging technologies, both AI and biotech-related.
In the meantime, plenty of officials are disappointed Thrive is leaving town but say it’s not all negative. It launched with whiz-bang technology developed here, stayed and grew for more than three years and sold for a big sum. Patients everywhere will be beneficiaries of advanced blood-based cancer screening.
Kagan said other researchers will take note that Baltimore is a good landing spot to do such life-saving work. That will lure highly skilled individuals, spur investment in institutions and lead to more local startups.
“Think of that message.” Kagan said. “Maybe Baltimore doesn’t need all parts of the value chain.”