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From EntreMed To Financing Biotech Dreams

By Ellen McCarthy
Thursday, August 5, 2004; Page E01

John W. Holaday, the former biotech executive, looks a little out of place as he peers out from behind a bank teller's desk. There should be old-fashioned glass windows between the money handlers and the customers, he decides while knocking on the cherry wood frame. As he steps into the bank's steel-encased vault, a look of reverence washes over his face.

This is not just any bank to Holaday. It's the one he has spent the past year working to establish with partner John P. "Jack" Hollerbach. The crown molding has yet to be installed, the pneumatic tube from the deposit box outside to the office isn't quite up to speed, and the branch is filled with unpacked boxes instead of customers. But within weeks Holaday expects to be the proud chairman of a fully operational community bank in Rockville.

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It seems an odd career move for the man known primarily for his work fostering the development of experimental protein-based cancer treatments at EntreMed Inc., the Gaithersburg biotechnology firm he founded in 1992. But to hear Holaday talk, his life's work led to the formation of Harvest Bank of Maryland, among the wet labs and centrifuges of Maryland's biotech industry.

"What fascinated me was how to take concepts from bench to bedside," Holaday said, leaning deeply back in his chair in the confident manner of one who has completed the conception-to-delivery process before. "If we think of ourselves as a community along the 270 corridor . . . there is an amazing gathering of professionals here. But a lot of these people, like me, often have no training in finance," he said.

What most of those people do know, he added, is that their businesses need financing in order to survive. Harvest Bank aims to help them get that financing while providing a range of conventional bank services to employers and employees.

Holaday, 59, retired from EntreMed in early 2003. He had seen the company through an initial public offering, a bubble that pushed its stock to above $98 a share in 1998 and then the threat of running out of cash when early drug trials produced disappointing results. Several months after Holaday's early retirement, he met Hollerbach, a longtime banker, at a meeting of the Washington Dinner Club, an organization of angel investors led by John May.

Holaday and Hollerbach, 51, established an immediate rapport and began to talk about combining their strengths. Hollerbach, whose career included stints at Citibank, Maryland National, Bank of Baltimore, and Cardinal Bank, spent two weeks creating a business plan for a start-up bank that would target the state's life sciences and technology professionals. The document was two inches thick and contained strategies for five years of growth.

By December, the two incorporated the Bank for Biotech Investment Group, a holding company for Harvest Bank. Hollerbach, who likes to compare his partnership with Holaday to the complementary combination of chocolate and peanut butter, says Harvest's targeted vision is what differentiates it from his previous banking ventures.

Harvest will cater to biotechnology firms, medical practices, government contractors and information technology companies. The goal, Holaday and Hollerbach contend, is to become something similar to the old post offices of the Wild West, serving as both a community nerve center and a place of business. In addition to the usual commercial and retail banking services, the founders want Harvest to trade in introductions -- connecting customers with venture capitalists, lawyers and accountants.

"They will come and bank with us because they know us, because we're part of the community," said Hollerbach, now Harvest's president and chief executive.

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