More than half of the first 20 high-tech applicants at the"teller's window" of the Massachusetts Government Land Bank(MGLB) are biotechnology companies.
The bank rolled out its $50 million loan-guarantee fund thisweek with a mailing to 2,000 prospective borrowers andfinancial deal-makers, including banks and venture capitalists.
Alpha-Beta Technology Inc. of Worcester; Creative BiomoleculesInc., Alkermes Inc. and Focal Inc., all of Cambridge; and GelTexPharmaceuticals Inc., a start-up in Lexington, all appear closestto filing defined loan-guarantee applications, Karl Seidman,deputy director of MGLB, told BioWorld. They range from$300,000 requested by GelTex to the maximum $5 million (theMGLB fund's ceiling) sought by Alpha-Beta's sponsor, theMassachusetts Biotech Research Park Corp. This site incubatoris trying to build the company a $22 million facility.
Creative Biomolecules Inc. is looking to buy a vacant building inthe Boston exurb of Westboro and expand it for office, lab andproduction space. The size of the loan guarantee it will requirehas not been determined.
Focal, Seidman said, "hasn't quite identified the final facility itwill need for lab space, pilot plant and manufacturing. Theamount, which could be up to $3 million, is in discussion thisweek."
Other interested companies include:
-- Bio Photonics, a very early-stage start-up in Cambridge;
-- Bio Shelters of Amherst, which claims a proprietary processfor cultivating fish and may ask for $1 million;
-- East Acres Biologicals Inc. of Southbridge, which raisesanimals from which to extract antibodies;
-- Leukosite of Boston, which has no site yet and needs 20,000square feet to develop pharmaceuticals for treatingautoimmune diseases;
-- Transkaryotic Therapies Inc. of Cambridge, which is lookingfor pilot-plant facilities to house its gene therapy research.
In March, the Massachusetts Legislature set up a $15 millionEmerging Technology Fund in the Land Bank to stimulateprivate manufacturing and R&D facilities in three cutting-edgeindustries: biotechnology, advanced materials and advancedenvironmental technologies. With this $15 million kitty inreserve, the new fund has the leverage to initially guarantee$50 million in private financing.
As its name implies, the Land Bank's basic business isunderwriting real estate transactions. To raise the seed $15million, it pledged the income stream from 34 of its existingreal estate loans for the debt repayment. The Bank of Bostonwill advance the sum in a closing set for early next month.
Borrowers will pay 0.5 percent of the total guarantee at time ofcommitment, plus a 2 percent annual fee on outstandingbackup, for a maximum of 10 years. Equity participation willbe a condition of the guarantee.
Seidman unveiled the future fund late last September at aCoopers & Lybrand roundtable on "Banking in Biotech." He toldthe session that to his knowledge no other state has such afinancial cushion for high-tech emerging industries.
-- David N. Leff Science Editor
(c) 1997 American Health Consultants. All rights reserved.