Novavax $1.6B vaccine contract could be start of something big
Earlier this month, Operation Warp Speed, the federal interagency initiative to develop a COVID-19 vaccine, awarded a record $1.6 billion grant to a Maryland-based company, Novavax, to develop and manufacture their potential coronavirus vaccine. That the company received more money than competing firms like Johnson & Johnson and AstraZeneca was widely viewed as a sign that government experts like their chances, perhaps based on the company’s past experience with two similar viruses that cause severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS). Wall Street likes its prospects, too. The company’s stock which was trading for less than $5 a share one year ago on the NASDAQ exchange is now hovering around the $100 mark. Not too shabby for a 33-year-old company headquartered in Gaithersburg, a suburban enclave that did not even become incorporated as a city until 1968.
But it was also not too shocking. The company uses a different type of vaccine technology than what has been employed in the past. Perhaps it will prove to be the answer to the pandemic; perhaps it won’t. But the cutting-edge work is not just about developing a vaccine for this one virus as disastrous as it’s been. Nor is Novavax the only Maryland company operating in the biotechnology arena or in technology or the health and life science fields. What should not be lost in the celebration of this one company’s success and the hope for a vaccine that might put the coronavirus behind us is the economic opportunity offered by these knowledge-based enterprises and how this state should be doing everything possible to nurture and sustain these businesses.
Just as certain states have unique opportunities to make wine because the climate is perfect for growing grapes or perhaps furniture building because of abundant hardwood forests, Maryland has much to offer biotech companies with the presence of the National Institutes of Health in Bethesda as well as Johns Hopkins and the University of Maryland and the growth of biotech infrastructure including “parks” in West Baltimore and near the Hopkins campus and the state’s proximity to D.C. generally. There are an estimated 500 biotech firms among an overall 2,700 life science companies in Maryland with employment growing from 33,000 jobs a decade ago to 40,000 today. Some see the field increasingly centered on the Mid-Atlantic from Wilmington, Delaware, to northern Virginia — a so-called “BioCapital” surpassing any biotech corridor outside California.
And that raises some important questions: Are we training our young people for jobs in this field? Are we retraining workers in industries that lack such growth potential for biotech jobs? Is the state doing enough to support the families of biotech workers, an educated workforce that likely puts a premium on quality public schools for their own kids. (That surely puts a different perspective on the Kirwan Commission-led efforts to upgrade K-12 education in this state; don’t do it for the kids, do it for the economy). In a knowledge-based enterprise, education is the key. Business leaders across Maryland understand this, but sometimes it’s difficult to tell whether some in public office see this as clearly.
Two years ago, Maryland put forth a dramatic effort to compete with other sites across the country to land Amazon’s “second” headquarters. The state’s rejected proposal was valued in the neighborhood of $8.5 billion. Would the state and local governments do as much to support Novavax and its peers? That’s surely something to mull beyond any short-term regret for not picking up Novavax stock at $4.25. Are we missing the next big thing because it’s right under our noses? Some have been trumpeting the opportunities of biotech for years but this may be the latest sign that what was merely “potential” is now turning into reality. That’s exciting but it’s daunting, too.
Maryland is often cited as having one of the most well-educated work forces in the nation with not only a high percentage with college degrees but a lot with advanced degrees. That is what makes fertile soil for growing the next big knowledge-based industry. But it’s not always clear that this asset is valued when it’s time to choose whether to trim state spending on higher education as happened earlier this month or a veto Kirwan K-12 reforms as happened earlier this year. When the general public is more intrigued by decades-old monuments and early American history than it is by the prospect of high-paying jobs in the future, perhaps they are missing a profoundly important investment opportunity.