Henry "Pete" Linsert has to smile whenever he sees gardeners and homeowners trying to eradicate pond scum and algae from bird baths and back-yard ponds.

"We're a contrary company," said Linsert, chairman of Martek Corp., a five-year-old biotechnology firm based in Columbia, Md. "Millions of dollars are spent on killing algae, and we're trying to grow it."

There are 70,000 species of algae and Martek is trying to grow and identify uses for as many of them as possible. The company already sells special proteins and sugars for use in scientific experiments. Food dyes seem a promising category, as do potential medical drugs, and even additives for baby formula.

Different varieties of algae -- most of it looks like green glop -- cover the walls of each enormous glass aquarium in the company's central production area. Long fluorescent light tubes and bubbling gasses provide the photosynthetic algae with the energy and nutrients they need to grow. One 130-liter tank can produce $120,000 a month in special proteins and sugars, Linsert said.

Casually dressed laboratory workers drift in and out of Martek's 15,000-square-foot office on their own schedules. "When you grow things, you have to come in at odd hours to tend them," Linsert said.

Richard Radmer, Martek's founder and chief scientist, got involved with algae 20 years ago while studying photosynthesis as a post-doctoral fellow at Martin Marietta Corp. The National Aeronautics and Space Administration had hired the defense contractor to create a life-support system based on the microplants.

The algae were supposed to convert light from the stars and carbon dioxide (a byproduct of human breathing) into protein for food and oxygen for breath.

"We were growing algae and sending protein to MIT {the Massachusetts Institute of Technology}, where they made it into lasagna and cookies and things," Radmer said.

The research group's focus shifted to earthbound products in the mid-1980s and Radmer led an exodus of eight scientists in 1985 to form their own company. Five years and a major office expansion later, Martek has 30 employees, including six with PhDs.

Linsert, one of only three non-scientists in the company, joined Martek about 2 1/2 years ago at a crucial stage in its growth. The scientists left Martin Marietta with technological methods, but no products, and it took them several years to get themselves poised for potential commercial success.

John Mahar, executive vice president of Elf Technologies, said he turned down Martek when they first came looking for investors about three years ago. Mahar changed his mind a year later and put up $1 million.

"When we first looked at them, they were more focused on technological development," he said. "{Later} they had a clearer idea of how they would turn it into a business."

Now Martek has sales of more than $1 million a year and hopes to double that in 1991.

Their chief products include Celtone, a special chemical that scientists use to nurture bacteria and other cells. Experimenters can then run the labeled bacteria and cells through nuclear magnetic-resonance (NMR) equipment and watch them interact with other chemicals.

Such NMR efforts are crucial to the search for cures for cancer and AIDS, because they allow doctors to watch how prospective drugs work, and then modify the parts that don't.

Martek has no significant competitors in the field of algae-growing, but several other companies make growth environments, and many scientists are accustomed to creating their own, researchers said.

"We've concocted our own growth media ... but it's more cost-effective the way they do it," said Martek client Stephen W. Fesik, who heads NMR research at Abbott Laboratories in Illinois. Previously, Abbott asked graduate students to grow the labeled cells, but now the students can be freed up for for other work.

There is money for growth at Martek. A May financing effort brought in $2.75 million, twice what the company initially had sought, with the help of the Salomon Brothers and Hambrecht & Quist investment firms. And Martek is branching into other kinds of algae products.

One corner of the lab is devoted to fermenting algae housed in enormous steel drums, which uses sugar for energy. Linsert said the Martek scientists eventually hope to find a species of fermenting algae to replace their light-driven creatures because the fermenters grow more quickly.

In the middle of the lab is a special climate-controlled room full of the company's newest experiments. Brightly colored algae in every conceivable hue -- bright orange, fluorescent pink, deep blue -- grow in big glass jugs.

Linsert said he is most excited by the company's work with docosahexaenoic acid (DHA), a fatty acid found in human breast milk and certain kinds of microalgae, but not in infant formula. Recent experiments have indicated that DHA may be crucial to brain and eye development, and some scientists have advocated adding the oil to formula.

DHA has a long way to go before the Food and Drug Administration will approve it, but Martek has signed research contracts with several formula companies to supply them with the fatty acid for testing.

"Whether this is going to improve college board scores 20 years from now, we don't know," Linsert said.