Subject: [NEXTEL-1] Firms Tap New Market for Homeland Security

From: [email-masked]
Date: Fri, 16 May 2003 06:32:09 -0400

Thales Communications in Clarksburg has entered the homeland security industry with
portable radios
that allow police, fire and other protective service agencies to talk to one another. "We
had been more in the military arena with our previous products that specialize in portable
radio equipment, and now here's an opportunity for us to make this product that will meet
the demand for government agencies," said Stephen Nichols, public safety manager at
Thales. The $2,500 radio sets have been sold to various government agencies, including the
Bureau of Land Management and the U.S. Fish and Wildlife Service.

Andrew Bostock, left, an account manager at Thales Communications in Clarksburg, details
the company's portable radios, like the one below. They allow police, fire and other
public safety agencies to talk to one another.
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Firms Tap New Market for Homeland Security

Companies Working To Develop Products For U.S. Government

By Dana Hedgpeth
Washington Post Staff Writer
Thursday, May 8, 2003; Page GZ25

When Jonathan Cohen founded his small biotech
company in Rockville three years ago, it didn't
have a department of homeland security. The
company focused on its product to detect and
monitor tumors.

That product is still two years from market. But in
the interim, the company is marketing a $20
BioCheck Powder Screening Kit to detect
whether bioterrorism agents, such as anthrax or
ricin toxins, exist in an area.

Like dozens of other companies in Montgomery
County and the region, 20/20 Gene Systems has
found a potentially lucrative market that emerged in
the wake of the 2001 terrorist attacks and
war-related worries of the past year and a half.
The products themselves include tests for
hazardous materials, vaccines and software that
tracks information.

"The federal government is expanding, and when
they expand, the local tech community and the
professional service community have to provide
them with services because they don't have those
in-house services," said Henry Bernstein, assistant
director of Montgomery's Department of
Economic Development. "If companies are
positioned right, they're going to benefit.

"We have companies that either by way of design
or retooling are moving into the area of homeland
security," Bernstein said. "We have the right mix --
with the National Institutes of Health and others
here. Companies are close to the federal
government, and the brain trust to do these
projects is here."

Thales Communications in Clarksburg has entered the homeland security industry with
portable radios
that allow police, fire and other protective service agencies to talk to one another. "We
had been more in the military arena with our previous products that specialize in portable
radio equipment, and now here's an opportunity for us to make this product that will meet
the demand for government agencies," said Stephen Nichols, public safety manager at
Thales.
The $2,500 radio sets have been sold to various government agencies, including the Bureau
of Land Management and the U.S. Fish and Wildlife Service.

The testing kit that 20/20 is selling will "rule out 90 percent of the stuff that makes
people call 911," said Cohen, a former patent lawyer and volunteer firefighter.

"We designed it at the height of the  anthrax incidents in 2001. The idea for our product
was that overwhelmingly the calls for a strange substance resulted in being a powder that
was cornstarch, sugar from powdered doughnuts or drywall dust."
But selling products -- even related to bioterrorism and the war in Iraq -- has not been
easy. Cohen's 20/20 had $50,000 in revenue last year, but it's losing money. Venture
capital is scarce; the $2 million that Cohen has raised came from angel investors as well
as government grants.

"The war on terrorism has created a lot of need to get products out the door," Cohen said.
Igen International in Gaithersburg, which typically makes tests that pharmaceutical
companies use for drug discovery, has reached more deals with government agencies that
have bought their systems that detect biological weapons, such as anthrax and botulinum
toxin. It has other deals with the Food and Drug Administration, the Centers for Disease
Control and Prevention and the Department of Agriculture to test products suspected to be
contaminated.

Igen executives have said they sold about $5 million worth of biodefense products (out of
$42 million in total revenue) in the last year, up from $1 million a year earlier.

Other companies also are doing work related to the war in Iraq and homeland security.
Rockville-based Digicon makes a software package the military uses to track personal
information for its personnel.
DynPort Vaccine Co. in Frederick won a contract with Department of Defense to make
smallpox vaccine stockpiles for the federal government. BioReliance, another Rockville
biotech firm, is a subcontractor on that deal, according to economic development
officials.

Giant defense contractors, such as Bethesda-based Lockheed Martin, so far have been able
to leverage their experience in defense contracting into the new field of homeland
security. A contract that started out as a Coast Guard modernization effort has become a
key component in homeland defense, said James A.  Wrightson, vice president of strategic
development. Lockheed's Gaithersburg-based Mission Systems Group is among the divisions
working on software, hardware and training for aviation security, and port and border
security, he said. Lockheed also has worked on satellite imagery used to track threats,
fingerprint identification systems for the FBI, chemical-biological detection sensors and
myriad other developments.

"We've tried to take a corporation-wide approach -- what are the larger, broader
solutions," Wrightson said. "It's our belief that this is a long-term effort and, although
budgets will rise and fall, the budget for homeland security issues will rise over time."
At Tetracore Inc. in Gaithersburg, William Nelson said he has watched the frenzy of
companies going after work in the bioterrorism field. He turned a kit that detects
biological agents into a commercial product after he left the Navy and starting Tetracore
in 1998. He now has about 800 companies and hazmat teams that use his product, he said,
and it has been widely used in testing for anthrax in the Washington area.

The test, he said, works much like a home pregnancy test. "The home pregnancy test looks
for hormones in your urine, and this looks for bacteria or toxins that are physically out
there," Nelson said. "If there was powder in a letter you got, within 10 to 15 minutes you
would have an answer."

But Nelson is cautious about how long the business opportunity will last.

"There's a thought that people want to protect every building and put cameras in every
Metro stop," he said. The market for homeland security "will last, but it can't last at
the current levels."

"It's like defense spending. It has its ups and downs," Nelson said. "You get an order for
an aircraft carrier and it may be a while before you get another one."

http://www.washingtonpost.com/wp-dyn/articles/A22780-2003May6.html