MedImmune Senior Vice President Bing Yao will become chief executive of Viela Bio, which will also base its operations in Gaithersburg. Under the terms of the investment deal, MedImmune would be the largest minority shareholder in the new firm.
“We are very excited because we absolutely believe in this [Maryland biotechnology] ecosystem, we have a strong pipeline, and this is a very entrepreneurial way for us to bring this medicine to patients,” MedImmune President Bahija Jallal said.
Viela will inherit the right to develop six drug candidates from MedImmune’s portfolio, drugs that target diseases such as neuromyelitis optica, a rare condition that affects the optical nerve and spinal cord. All are in the early stages of development, meaning it could take years of research and hundreds of millions of dollars before they are approved for sale.
For Montgomery, the deal promises to open up dozens of specialized pharmaceuticals jobs as teams of scientists push the drugs through the Food and Drug Administration review process. Viela has committed to creating 100 positions in the area over the next three to five years, a target that was negotiated as a condition of a $750,000 grant from the county. That funding came on top of a $2 million conditional loan from the state’s Department of Commerce, all of it meant to help the young firm offset real estate and start-up costs.
The foreign investment was a welcome sign for county leaders, who have looked to biotechnology as a source of new employment and economic growth.
“Chinese money is going to be flowing in,” said Montgomery County Council member Roger Berliner (D-District 1), who was involved in negotiations with the company.
He said Montgomery was competing with another Maryland jurisdiction to keep the firm in Gaithersburg, though he declined to name the jurisdiction.
Viela “could one day be a $1 billion company and we definitely wanted to keep it here,” he said.
Montgomery’s biotechnology industry has been eager to celebrate a win. There is a local leadership gap after the Maryland Technology Council, a common convening point for the regional business community, disbanded and merged with another trade association last year.
It has been a rocky road for some of the state’s standout firms.
Rockville-based vaccine maker Novavax turned heads in 2015 when it attracted an $89 million Gates Foundation grant to develop a drug to immunize newborns against a harmful flu variant, but faltered the next year when it received disappointing results in a key test of a separate drug. The firm had to lay off a large chunk of its workforce as a result.
Novavax’s experience is not unique among smaller biotech firms, whose fortunes can swing wildly in response to test results and decisions made by panels of experts at the FDA.
Successful trial results can lock investors into years of steady profits in a market where competition is limited. Disappointing results can divert a company’s plans by years or doom it entirely.
MedImmune has been somewhat insulated from those fears because it is owned by AstraZeneca, the U.K.-based pharmaceuticals giant that made just over $22 billion last year.
Now, the new company’s leaders will effectively be striking out on their own; testing their fates under a new ownership group. MedImmune will still wield significant control over company decisions by virtue of its position as the largest minority shareholder. But adding private equity to the mix could affect future strategic decisions.
Yao, the Viela chief, said his team closely vetted its investment partners ahead of the deal.
“We have been very picky,” Yao said. “We had the strict criteria that investors need to be committed to the long term.”