- The Washington Times - Monday, April 30, 2001

BioReliance Corp. says its first quarter revenues grew 15 percent to $15.3 million from $13.3 million a year ago, marking the highest quarterly revenue in the 54-year history of the company.
Net income more than doubled to $390,000 (5 cents per diluted share) from $190,000 (2 cents). Diluted shares reflect the value of options, warrants and other securities convertible into common stock.
BioReliance, based in Rockville, is a contract research organization that provides testing, developing and manufacturing services for biomedical products. Its clients are government agencies and biotechnology and pharmaceutical companies.
"We had continuous strength in the rate of new orders and in sales in the United States and Europe," says Capers McDonald, president and chief executive of the company.
Founded in 1947, BioReliance went public in the summer of 1997. Since then, its shares have remained at a price near its initial public offering of $15.
The stock closed at $13 Friday on Nasdaq.
"They help develop and test for different biological agents that might be used potentially against the U.S. government or the U.S. population," says John Smith, a partner at Deerfield Management, a New York health care hedge fund that owns about 300,000 shares of BioReliance.
About 10 percent of the company's revenues last year came from government contracts. The rest derived from commercial deals, in which BioReliance makes the products biotech and pharmaceutical companies need to do clinical trials on potential drugs.
"They built a large bio-manufacturing plant [in Rockville last year] and we became excited about their opportunity to manufacture a smallpox vaccine," Mr. Smith says. "They are just beginning, but that could be quite substantial."
The deadly smallpox was eradicated in the 1970s, but since then, reports have come out that former Soviet states weaponized the disease, by keeping it live and reproducing it for use in bombs and guns. The U.S. government also fears other nations have hoarded the disease as well.
BioReliance's vaccine is based on older vaccines, but it works faster. Under a deal with the Department of Defense which Mr. McDonald estimates is worth about $100 million the company will be making the vaccine for the military. It would be used by units going into areas potentially infected with smallpox.
Another contract is with the Centers for Disease Control and Prevention, which last year decided to create a 40 million- dose stockpile of the vaccine. It would be used in case of a bio-terrorism incident where Americans are exposed to smallpox.
In December, BioReliance was also awarded a $6 million contract by the U.S. National Institute of Allergy and Infectious Diseases for the development and production of viral vectors, which will be used in testing of gene therapies for infectious diseases.
"These are three very sizable contracts for a company of our size and that gives us confidence that we are on the right track," Mr. McDonald says.
BioReliance is an appealing investment because of its potential market, says Robert E. Hall, senior vice president of Brown Capital Management, a Baltimore investment adviser whose clients own over a million shares of BioReliance.


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