To buy a building in Panorama City for his printing and digital graphics business Kevin Berg took out loans, sold a motor home and a condominium in Hawaii. He could have operated out of the Lanark Street location as is but decided to make improvements to the interior that cost upward of $200,000. He put in a kitchen, energy efficient lighting and wheelchair accessible ramps, bathrooms and doors. The building had been part of Berg’s long-term goal of income-generating property for his retirement years. “We put every last nickel we had into it,” Berg said. Now the Los Angeles Unified School District wants to take it all away for Valley Region Elementary School No. 13. It’s turning out to be unlucky for Berg and other businesspeople and property owners in the neighborhood. The district plans to displace six buildings in the 14600 block of Lanark Street, one building in the 14600 block of Titus Street, and nine single-family homes along Cedros Avenue. More than that, the displacement further erodes an already shrinking supply of industrial-zoned land in the San Fernando Valley. Berg made the improvements to the 7,000-square-foot building facing Lanark Street. The owner of a print cartridge recycling company rents the rear 6,000-square-foot building. As a franchise, Berg is limited by geography where he can relocate. He is not interested in renting again but is uncertain of what is available to purchase and if he can afford it. Berg spent two years looking before finding the Lanark location. “To find a duplicate opportunity like that is going to be hard,” said Ron Feder, of Lee & Associates, a realty firm working with Berg. Elementary School No. 13 is among the 132 schools proposed by the district in a multi-year plan to have children stay in their neighborhoods rather than being bused elsewhere. Seventy-one schools have already been built, with 60 out of 65 additions completed. The new elementary school will relieve over-crowding at six other elementary schools and one primary center, district officials said. It would be situated on the same street as Panorama High School, which opened in 2006 to take students from three other Valley high schools. The 5.46-acre Lanark-Cedros site was one of two considered by the district. Community meetings took place in February to get input and ideas and the site was announced on March 4. The school board gave its approval three weeks later. Being bounded by streets on three sides gives greater flexibility to placing driveways and service entrances to the sites, said Al Grazioli, the district’s regional development manager for the Valley. In addition, the school will act as a buffer between residents and what remains of the industrial uses on Lanark, Grazioli said. The alternative site at the corner of Titus and Van Nuys Boulevard, where the unoccupied Panorama Tower stands, was not a viable option because it had fewer driveway entrances and would have children walking along a heavily-used street, Grazioli said. Chuck Carmichael won’t disagree with the advantage of keeping school children off Van Nuys Boulevard. For 17 years, Carmichael has been the leasing broker for a U-shaped multi-tenant industrial building at 14666 Titus Street occupying the future school site. The disadvantage to the chosen site, Carmichael told the school district, is that since the mid-1980s there have been few small, multi-tenant buildings, or incubators, built in the city. “They have 30 different businesses scrambling to find space so I can guarantee you they are moving out of the area; to Pacoima, San Fernando, or Santa Clarita,” said Carmichael, a senior vice president in the Encino office of NAI Capital. Nearly a quarter of the tenants may go out of business, Carmichael added. One tenant, H & H; Machining, already moved from Panorama City to Valencia rather than wait for the school district to give notice to vacate the building. The move cost about $50,000, Carmichael said. The district will pay fair market value for the buildings and help with relocation expenses. The next step for Nick Pepe, who restores classic Thunderbird automobiles in the back building at 14649 Lanark Street, remains up in the air. He could buy commercial property in the Valley or perhaps move out of state. What bothers him more than moving is the time he expects to be out of business because the school district won’t compensate for the loss of income, Pepe said. “This was all kind of new to us; this whole thing with them buying and us having to leave,” Pepe said. “We are weighing options.” (Business owners who believe they lost “goodwill” due to relocating can file claims with the school district that are considered on a case by case basis, Grazioli said.) For Berg, who has owned a franchise of Minuteman Printing since 1990, the main concern is whether the district offers to pay what he believes his improved building is worth. He bought the building with his printing business at $1.20 per square foot. The improvements bring it to $1.35 per square foot, Berg said. “I don’t see how we can possibly get back what we put into it from what they are saying,” Berg said.

Pushing to fast-track its takeover of wounded home-loan goliath Countrywide Financial Corp., Bank of America Corp. will promise to help 265,000 troubled borrowers keep their homes over the next two years by refinancing or modifying at least $40 billion in mortgages. Bank of America also plans to double its community development lending, which focuses on affordable housing, small businesses and people in low-income and minority neighborhoods, to $1.5 trillion over 10 years, said Liam E. McGee, the bank’s top consumer and small-business executive. In addition, the Charlotte, N.C.-based bank will donate $2 billion to charity over the coming decade, up 33% from its current level. McGee is to unveil the commitments today while testifying at a Federal Reserve hearing on the bank’s plan to buy Countrywide, the nation’s largest mortgage lender, for $4 billion in stock. The combination would give Bank of America 25% of the U.S. mortgage market. Regulatory approval of the deal is expected, and the bank hopes to win speedy approval and complete the acquisition in July. For the full story visit http://www.latimes.com/business/la-fi-countrywide28apr28,1,6949329.story

In his black v-neck pullover, black slacks and black slip-ons, Robert Ezra dresses the part of an attorney who specializes in the apparel industry. But the industry into which Ezra threw himself as a young, downtown attorney during the 70s bares little in common with today’s fashion and apparel business. There are, of course, advantages to having seen the local apparel design and manufacturing community transform through the past three decades. “We have, I think, a very interesting and unique position,” said Ezra, founding partner of Ezra Bruztkus Gubner, LLP, or EB+G, as the Woodland Hills law firm is also known. “We have been doing this so long and are so experienced in the area that we know all the players and can get things done for our clients based on those relationships.” Like other professional services firms catering to the San Fernando Valley’s apparel industry, EB+G is big on doing much more for clients than its core business of legal representation. In fact, says Ezra, the firm offers “cradle-to-death” service for local designers, manufacturers, and distributors of clothing and textile products. “We solve problems,” he said. “We find solutions that may not be available to others.” By others, Robert Ezra means other lawyers, most of whom, he adds, are not likely to have a background in accounting and banking, in addition to a working knowledge of the local apparel industry. By all accounts, it is an industry that is very unique in terms of the way business is practiced. Take cash flow for instance: The concept of factoring was invented for the apparel industry. In short, factoring firms assume risk on behalf of a company that expects to be paid when an order is filled, usually lending them cash to deliver on that order. “Let’s say you are in the process of filling a large order,” explains Lee Hirsch, president of Continental Business Credit, Inc. in Woodland Hills. “You’ve built your line [of clothing] and you’re going to sell to Target. They give you an order of 100,000 [pieces]. You commit to manufacturing, supplying or importing on that merchandise, but you don’t have the money to pay until you get paid.” Factoring firms such as Hirsch’s get cash into the coffers of apparel firms that need to fulfill orders for their products at the front ends of deals. Generally, whatever profit is built into the deal is also included with the factoring loan, minus the factoring firm’s fee. “If for some reason the customer goes out of business or does not pay, we’ve assumed the risk,” Hirsch said. In addition to apparel, other types of manufacturing and service firms also use factoring companies nowadays. In fact, textile and apparel account for between 30 and 40 percent of Continental Business Credit’s factoring business, with the rest spread across aerospace, metals, hardware, furniture and other industries. “Of our apparel customers, 80 percent are in Southern California, but only about five to 10 percent of that is in the San Fernando Valley,” Hirsch said. That ratio reflects a contraction in the number of companies that once designed and produced everything from shoes and hats to longjohns and evening gowns in the Valley. Robert Ezra says it is important to remember that when there were more local clothing manufacturers, there were also more apparel outlets. He says labels could put together a line of clothing locally and peddle it to the likes of May Company, Robinson’s or The Broadway department stores. Those stores are all gone now, victims of industry consolidation. The Valley’s 21st Century apparel-design and -manufacturing industries have less to fear from industry consolidation than they do from counterfeiting. Providing protection against theft of intellectual property is a big part of what apparel-industry attorneys do for their clients. “The apparel industry is ever-changing because of technology,” says attorney Crystal A. Zarpas, founding partner of Mann & Zarpas, LLP in Sherman Oaks. “There are big counterfeiting issues that come from advances in technology, and they effect not only the Louis Vuittons of the world, but also smaller, more local brands.” Zarpas and partner Lloyd S. Mann provide their clients, about 40 percent of whom are in the local apparel industry and allied businesses, with a host of services the former says constitute the most powerful aspect of intellectual-property protection: preventive action. “I tell clients, ‘register the trademark, file for copyright when it’s appropriate and register it with customs,'” Zarpas said. “It’s like preventive medicine.” Zarpas says there is no way to measure how important it is for entrepreneurs in the apparel industry to have a lawyer that is familiar with their business. Having one who knows the local landscape is that much better. “I always tell prospective clients that I don’t care if they don’t hire me; hire someone who knows their industry,” she said. Zarpas says knowing the practical side of a client’s business is crucial for providing quality legal advice. Apparel and textile companies have their own language, according to her, and she speaks it. For instance, knowing everything that a pattern cutter in the apparel industry does may mean the difference between properly representing a client, or not, she said. “When we established the firm seven years ago, my partner and I didn’t want to do apparel,” Zarpas recalls. “But together we have 25 years of experience working for clients in that industry, and they followed us. Some said they wanted us to continue helping them.” With a total of five attorneys, Mann & Zarpas specializes in serving small companies and startups, with Crystal Zarpas handling transactions and Lloyd Mann directing litigation. The firm has helped spearhead successful efforts to enlist the aid of one-time hotbed of counterfeit apparel, Ebay, in curtailing the crime. “We also work closely with U.S. Customs,” Zarpas said. “Which, by the way, is doing an amazing job at stopping counterfeit items at the ports.” Some other local professional-services firms serving the local fashion trade include Sherman Oaks accounting firm, Grobstein Horwath; Silvers and Bonenfant, of Encino,an accounting firm with 25 years of apparel-industry experience under its belt; Rosenthal and Rosenthal, a New York factoring firm that has reportedly just opened an office in the San Fernando Valley. “The apparel industry in the San Fernando Valley has waned in recent years,” Lee Hirsch of Continental Business Credit said. “But there are still a lot of companies manufacturing for other labels out here.” Hirsch advises his startup clients on ways to avoid pitfalls that have pulled their predecessors asunder. “We’re very focused on trying to facilitate their success,” he said. “We hope they start with a reasonable amount of capital, and we’ll guide them to accounting firms and lawyers who can also help them make good business decisions.” His is a philosophy not unlike that of Robert Ezra’s. Ezra’s firm, EB+G, also works with outside local professional-services firms that have knowledge of the local “rags” business as a way of augmenting its in-house services. EB+G’s in-house services include structuring international lines of credit, navigating complex, apparel industry-specific labor laws, (some of which were vastly strengthened in 1999 with the passage of California’s AB633), as well as bankruptcies. But, says Ezra, some of the best service he has provided clients was rendered when he has able to minimize billing time. That was the case when a client believed the company he previously worked for owed him money. As it turned out, the company’s attorney was a long-time business acquaintance. Instead of generating a lot of paperwork to justify fees, Ezra said, he sat down with opposing counsel and hashed out a settlement. In the San Fernando Valley, it’s a small fashion world after all.

Question: I have learned that there are many differences between California wage and hour laws and the federal wage and hour laws. Am I correct in assuming that so long as we comply with one or the other, we are compliant? Answer: Your question is a common one that I hear regularly, as is your assumption. Unfortunately, your assumption is incorrect. In most cases, California’s employment laws are more burdensome (for employers) than the federal counterparts. For example, effective January 1, 2008, California’s minimum wage was increased to $8.00 per hour. The federal minimum wage is $5.85 per hour until July 24, 2008, at which time it will increase to $6.55 per hour. As a California employer, since California’s minimum wage is higher, and thus more restrictive, you must comply with California’s minimum wage laws for California-based employees. Compliance with the lesser federal minimum wage laws get you nothing. Beyond this minimum wage discrepancy, keep in mind that there are many other significant differences between California and federal labor and employment laws (e.g., overtime rules). California employers must comport with the more restrictive requirement (which 9 out of 10 times will be the California rule). Q: We have commissioned outside sales people throughout the West. They are all W-2 employees. For budget purposes, we are considering asking these sales people to attend our annual sales meeting at our corporate home office here in the Valley on their own nickel. Other than the possible negative hit to morale, is there anything else we should be thinking about? A: Yes; not doing it. Why? Other than the first very good reason (which you have apparently already taken into consideration the certain negative hit to morale), requiring employees to dig into their own pockets to pay for required work-related expenses (e.g., travel and lodging to attend a mandatory out-of-town meeting) violates Section 2802(a) of California’s Labor Code which provides that an employer “shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequences of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.” The same section goes on to state that “necessary expenditures or losses” includes all reasonable costs, including but not limited to, interest and attorney’s fees incurred by the employee enforcing his rights granted by this Section. Though you might consider scaling back on the expenses associated with the meeting by conduct the meeting via teleconference or conference call, as opposed to in-person, or even skipping this year altogether, you should certainly scrap your current plans to force your staff to pay their own way to attend a mandatory meeting. Q: We are a party to a contract that has no term. The relationship is pretty new and it is not going as well as we expected. I assume since there is no specific term, we can terminate the contract immediately if we choose. True? A: Actually, that is not necessarily the case. Generally speaking, courts apply a three-step analysis in determining how long a contractual term runs: first, courts will look for an express term (e.g. ” this agreement shall remain in force for a period of one year from its effective date “); if one is absent (as it appears it is in your case), the court determines whether one can be implied from the nature and circumstances of the contract (the court will look at other provisions in the agreement, and perhaps even the parties’ course and scope of dealing in determining if the parties anticipated that the agreement could be terminated by will or not); if neither an express nor an implied term can be found, the courts will generally construe the contract as terminable at will. Since the answer to your question can’t be answered without first reviewing the agreement itself (e.g., a lawyer would look for other relevant provisions such as if there is a right to cure, if projections speak to multiple years, etc.) and exploring the context of the negotiations and relationship (e.g., if the relationship contemplated a significant up front investment by one party), I would suggest you consult a business lawyer for advice prior to choosing a route you might otherwise regret. This column contains general information and under no circumstances constitutes legal advice. This information is not provided in the context of an attorney-client relationship and nothing herein creates an attorney-client relationship. Readers should not act upon this general information without first seeking professional advice. Ira Rosenblatt is a business and corporate lawyer and a co-founder and Director of Stone, Rosenblatt & Cha, a business law firm in Warner Center. Rosenblatt has earned Martindale-Hubbell’s highest rating (“AV”) for legal ability and ethics and is listed in Martindale-Hubbell’s National Bar Register of Pre-eminent Lawyers. He can be reached at [email protected] .

The 2008 San Fernando Valley Economic Summit will be held May 8 at the Sheraton Universal Hotel. Because the economy is in an entirely different predicament than it was when the summit was held last year, national and regional economic issues will be a primary event focus. “The big thing is what in the heck is going to happen with our economy?” asked Bruce Ackerman, head of the Economic Alliance of the San Fernando Valley, which is co-presenting the event along with California State University, Northridge. “We’ve continued to watch gas prices go up, auto sales go down, and a general softening of the overall market. We’re going to be walking into a setting we haven’t been in for 15 years.” In light of the business community’s economic concerns, Los Angeles Mayor Antonio Villaraigosa will discuss his economic policies and strategies for the city, which will inevitably affect the Valley, Ackerman said. A new feature of the summit this year will be an interactive roundtable discussion between audience members and panelists about the real estate market. But due to, what some view as an impending recession, the main difference between this year’s summit and those held previously will be the direction of the discussion. “The first two years we did this the economy was doing great,” Ackerman said. “Last year, we had some early warning signs. We knew what was happening with Countrywide and the potential for problems in the housing industry, mortgage industry, in particular.” Now that some of the trends predicted are playing out, the challenge is to figure out how to survive the economic downturn, Ackerman asserted. “I think the difference we’ll see this year is more in short-term remedies,” he said. “What’s going on in the next months in terms of real estate, both commercial and residential? Large projects like Westfield are they going to have any kind of an impact?” Another difference between this year’s summit and last year’s is that the economy will be discussed from more of a national perspective. “When everything is good, you can look at the regional perspective,” explained Ackerman of this shift. “When things are slowing down, people want to see how national policies are going to be, so you’re going to see some interesting perspectives from Rich Weiss. It’ll be interesting to see what he says this year versus last year. He’s an economist. He is very enlightening and entertaining. He brings a different perspective.” The summit will also focus on which industries are capable of growing, despite the economic downturn. “What we have is a forecast survey where we surveyed 125 businesses in key industries in the San Fernando Valley, and those key industries were in aerospace, biotech, business services, entertainment, health services, manufacturing and wholesale trade,” said Dan Blake, a CSUN economics professor as well as director of the San Fernando Valley Economic Research Center at CSUN. Blake will present his findings during the summit. Blake said that the aforementioned industries were selected because they have a “multiplier effect,” meaning that, if activity goes up or down in any of them, other industries such as retail, trade, real estate and finance could be affected. “Generally, we found that the economic downturn is affecting Valley business,” Blake said. “They’re feeling the impact both inside and beyond the Valley, and many of them do business beyond the Valley.” Yet, there is optimism among business owners in the Valley, Blake added. The ones surveyed answered questions about their hiring practices if they’re doing more or less as well as whether they would consider leaving the Valley and the advantages and disadvantages of doing so. Blake will also present census data about the San Fernando Valley concerning employment and economic levels of residents here. What he won’t do, according to Ackerman, is make any outright predictions about next year. “Dan is going to review where we are right now and then interpret where we might be going in the short term,” Ackerman said. “He’s not going to full on forecast. He’s going to do more of current summary and an outlook.” For more information about the summit, contact (818) 379-7000. or www.economic alliance.org.

By THOM SENZEE Contributing Reporter According to Wikipedia, biotechnology is technology based on biology, especially when used in agriculture, food science, and medicine. The online open-source encyclopedia of everything also cites the United Nations Convention on Biological Diversity, which defines biotechnology as “any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use.” But the very fact that an article about the definition of biotech warrants inclusion in this special report rightly indicates that there is some ambiguity in terms of the final answer to the question: What is biotech? “I would define biotechnology in the broadest sense as the use of cells, tissues, or micro-organisms (or their parts) to produce a desired product (food, drug, chemical, etc.), or the deliberate manipulation of the characteristics of a living organism to enhance its utility to man,” says John Philo, PhD. Philo is vice president and director of biophysical chemistry at Alliance Protein Laboratories (APL) in Camarillo. He says his definition means the making of wine and cheese and the leavening of bread with yeast could be considered biotechnology. “Starting in the 1970’s biotech increasingly came to mean large-scale commercial methods based on laboratory research techniques such as genetic engineering and cell culture,” Philo said. “The production of drugs by genetic engineering of bacteria or mammalian cells is classic biotech in that context.” Furthermore, he says, today biotech also encompasses gene therapy, individualized production of skin grafts for burn victims and individualized cancer vaccines, as well as the cloning of livestock, and much more. But another local biotech executive-scientist describes his industry more narrowly. In fact, Greg Cauchon, PhD., founder of Designed Polymers, Inc. of Thousand Oaks specifically excludes wine and bread from his biotech menu. “Biotechnology implies to me the manipulation of genetic information to coax living organisms to achieve a human purpose,” Cauchon says. “Describing it this way excludes such ancient and honorable traditions as bread-making and the fermenting of alcoholic beverages.” To Cauchon, however, the term biotechnology encompasses more modern practices such as, “expressing large quantities of proteins through the use of recombinant genetics.” The future definition of biotechnology, or more precisely the inventions that will shape its future definition, is what really matters, says Cauchon, who’s company provides analytic services to biotech firms along the 101 Biotech Corridor and around the world. ” This century is expected to usher in an explosion of exciting new biotech products ranging from medical devices, electronics, and nanotechnology to green-tech and environmental science,” Cauchon says. Wider definitions As Greg Cauchon’s comments indicate, many include more than drugs for treating diseases in their definitions of biotech. Companies like Kythera Biopharmaceuticals, of Westlake Village are already reinventing the still-young biotech industry. Kythera uses microbiology for the purpose of developing aesthetic, (i.e., beauty) products. Kythera’s CEO, Dr. Keith Leonard, says the term biotech can also include references to non-biological products, such as medical devices. In fact, he says, some modern medical devices are more akin to biotechnology than are traditional pharmaceutical drugs. “I think of biotech as very different from pharmaceuticals, which tend to be chemistry-based and very search-based,” Leonard says. “In pharmaceuticals we tend to bang a lot of chemicals against it and see what makes our model move.” Leonard believes biotech is closer to pure science. “It’s more fundamentally science driven. So let’s understand the biology really well and then understand, hopefully in an even more natural way, by mimicking the body’s own proteins or antibodies, perturb a very particular and well-understood pathway to block a disease or create a particular phenotype.” Leonard describes conventional pharmaceuticals as more of a shotgun approach to medical treatment as compared to biotechnology even in comparison to some devices. “Now there are a lot of devices, because of the nature of what they are trying to do, that are incorporating a kind of biotechnology approach, which is starting with the biology first and then understanding very elegantly ‘where can I go in with a piece of equipment instead of a drug,'” But science is not the only definer of biotech today. Money is also shaping what people think of as the biotech industry. Brent Reinke, founder of The Biotech Forum, a regional biotech business and networking group, believes investors looking to make money in biotech are broadening the term with their attentions and dollars. “It’s a lot more difficult to develop a true pharmaceutical-drug development company than a medical device maker,” Reinke says. “And it’s an easier timeline with medical devices. It’s a shorter time frame from creation, to regulatory approval, to liquidity from an investor’s point of view.” And, he says, there are plenty of investors wanting to put their money into biotech. By including medical devices, and, in some cases, even support services such as data management, and laboratory services, in the overall biotech category the door is open wider for growing the biotech industry along the Conejo Valley’s “DNA Highway” along the 101 Corridor. However, like Greg Cauchon, Reinke believes there is a more important question about definition that comes to mind when he hears the word biotech. Reinke is concerned about what characteristics will come to define the 101 Biotech Corridor itself a few years from now, especially with the recent laying off of more than 700 scientists from mega-biotech firm, Amgen. Will it stay a small cluster of biotech companies, or will it grow toward parity with Northern California’s and New England’s sprawling life-sciences (a term Reinke and many others prefer to biotech) industries? “How many places in the world have an Amgen right in their backyards?” Reinke asks rhetorically. “How many times do you have 700 people coming out of Amgen at once; it may never happen again. We’ve got a window of opportunity in the next 12 to 18 months to gain some traction and get some of these companies funded and make the next Amgen happen right here again.” On the other end of the spectrum of definitions for the term biotech is that of Dr. Tsutomu Arakawa (PhD). “Once genes are cloned from cells, they can be purified from the cells or chemically synthesized,” says Arakawa, who is president of APL. “These genes are then transfected into appropriate cells depending on the need, leading to expression of corresponding proteins. “Any study and business arising from the manipulation of the transfected cells or cells expressing the proteins are defined as biotechnology. For example, purified proteins are used as therapeutic proteins. The transfected cells are used for assay to screen drugs,” Arakawa further explains. His definition, while technically in harmony with that of his colleague, stands in stark contrast to the tone of Philo’s definition, who helps run the same company he and Arakawa co-founded. Philo’s description of the field of biotechnology borders on poetic, while Arakawa’s definition would sound purely technical to the average layperson. So where can one turn to for the definition of biotech, and why does it matter? Going back to the United Nations Convention on Biological Diversity reveals that defining biotech could, in theory, effect the very survival of humanity. The Convention on Biological Diversity (CBD) lays out multiple protocols relating to transportation of biologically dangerous materials, preventing bioterrorism, protecting vulnerable socio-economic groups from unethical experimentation and biological pollution, and numerous other so-called biosafety issues. The CBD is an evolving document (sometimes referred to as the Cartagena Protocols, in recognition of the Colombian city where the first CBD conference was held) with a growing number of signatory states, including most of the major powers of Europe, as well as China and India. The U.S. is not currently a signatory of the protocols. But in order for the specific protections of the CBD to be asserted, there must be a clear definition of what is, among other things, biotechnology. As a biotech leader some say the biotech leader Amgen’s mission statement is perhaps the simplest, most altruistic definition of the purpose of biotech: “To serve patients.” Amgen’s definition That is Amgen’s mission statement. The definition of biotech, which the company supplied to the Business Journal is this: “Simply defined, biotechnology is any technology that relies on living organisms or biological systems to make products. By this definition, human beings have been using biotechnology for thousands of years to produce food products, textiles and other necessary items. Several familiar items including yeast-rising bread, yogurt, cheese, wine, beer and vinegar are all produced with the help of cultured microorganisms.” It was the advent of recombinant DNA during the 1970s that first opened the door for gene-based therapies. Recombinant DNA refers to the practice of using genes from one organism to benefit another. Whether one has a broad or narrow definition of biotech, the “etymology” of its science is recombinant DNA. The responses to the question “what is biotech?” given by the scientists and executives interviewed for this article came in a sort of binary manner when compared one from another. Half were narrow definitions, while the other half were broad definitions of biotechnology. Also, half of the answers were highly technical, while the other half was downright philosophical. In the case of one scientist, Designed Polymers’ Cauchon, we were given a technical definition as noted above, as well as some circumspect commentary about biotech’s long-term impact on humanity. “One day our descendants will look back at the latter half of the twentieth century as just the prelude to an enormous revolution in the way we think about ourselves and our world,” Cauchon said. That, he says, is biotech.

By THOM SENZEE, Contributing Reporter The good news for those who want the 101 Biotech Corridor to grow larger, with a richer mix of biopharmaceutical research and development companies as well as device makers and other life-science firms, is that capital is finding its way to the Conejo Valley and surrounding areas. Last year broke records for biotech funding. Venture capital funds invested 53 percent more in 2007 than in 2006 within the Los Angeles area, according to PricewaterhouseCoopers’ MoneyTree Survey. With more than $151 million in various stages of funding, biotech took a greater share of VC money than the region’s front-and-center industry entertainment and media which got almost $122 million. Only the region’s telecom sector received more venture capital than the biotech community. Of course, many startups along the corridor get their launch money from traditional business banks, Small Business Administration (SBA) loans, and personal investment. “There is a lot of activity in that area,” says William Furrell, president of Woodland Hills-based Furrell Financial Services. He helps small companies get start-up capital through all of the conventional, non-VC avenues. “The key is how much money they need to get started,” Furrell said. “They can borrow up to $2 million from the SBA. “Of course, then you’re going to need collateral and probably be putting in some of your own money too.” Furrell says there is no way to overemphasize the importance for biotech and medical-device entrepreneurs to have solid business plans with well-developed projections,as well as good credit and expert knowledge of the field. “That sector is no different than any other, except that it’s very hot at the moment.” He says it is important for all business loan applicants to know in the current environment they are probably not going to get approved by the first bank or lender they visit, and that they should just keep trying until they find the right one who will see the value in their biotech business plan. But for many fledgling ventures there is no substitute for the entrepreneur’s Holy Grail: securing venture capital funding or, perhaps even better, landing an angel investor. Novel ideas In addition to conventional funding sources, the money being invested along the 101 Biotech Corridor comes by means and ideas that are sometimes as novel as the therapies the promising young companies being funded are developing. Samuel D. Colella has been in venture capital since 1984. After 15 years as a partner at a large life sciences-focused VC firm, he formed Versant Ventures with six other partners. “According to the MoneyTree, 2007 was a record year for company formations,” Colella says. “VCs invested $9.5 billion in biotech.” The local portion of that money was divided into 209 deals throughout the county. But, according to Colella the market may have peaked. “I think for 2008 overall conditions will continue to be favorable for the industry,” he said. “We’re not directly impacted by what’s going on in the financial industry on the whole, but we are subject to some of the effects.” That’s why Colella expects this year to end with a leveling off of biotech funding at a more sustainable pace. When Versant opened its doors in 1999, the company shared the healthcare field with only a handful of other investment firms. Today, in Southern California alone, there are literally hundreds. The future of biotech Colella and his partners have seen a rapid evolution of their industry during the past nine years, a period during which the company made major investments along the 101 Biotech Corridor. Colella sees no reason for a bust in biotech and life sciences investment in coming years. “I still see a lot of positive fundamentals,” he says. “The demographics are solid. People are living longer and consuming more healthcare needs drugs and devices. And there are still a significant number of diseases we have no cure for.” The consensus is that, in addition to well established therapeutic sectors, certain diseases, technologies and needs will further drive the region’s biotechnology industry. In no particular order of importance they are: – Age-related illnesses, such as Alzheimer’s, ALS and Parkinson’s – Bio-neurological disabilities, such as autism-spectrum disorders – Stem-cell research – Next-generation micro-medical devices (especially for minimally invasive surgery) – Bio-analytics There are many subcategories of that last one, bio-analytics. One type is WindRose Analytica, a firm in Camarillo that provides biopharmaceutical makers with outsourced quality-control, drug-stability, and clinical-testing solutions. In just three years, WindRose has made a name for itself up and down the corridor for implementing quality-control programs that meet Food and Drug Administration and foreign regulatory requirements for protein-based drug therapies. But another kind of bio-analytics, which may help drive the biotech industry in the Conejo Valley and beyond is related to nanotechnology. Biochips are being studied that will be injected into patients’ bloodstreams and work like microscopic diagnosticians, potentially reading DNA in real time. Biochip technology is a good example of the blurriness of the line between biotech as drug therapies vs. biotech as drug therapies and medical devices. The evolving definition of biotech is examined in another article in this special report. But startups in these newer disciplines of biotech will need capital just as did those in the cancer and renal therapies arena that came before them. Venture capitalists such as Colella and colleague Steve Lazarus of Arch Venture Partners do not see those sectors contracting in the foreseeable future, quite the contrary. “There are going to be a lot of opportunities for startups,” Colella said. “The (Human) Genome project opened up a whole new world of genetics and genomics. At the same, time devices started to boom with the development of balloon angioplasty. Looking forward, we’re excited about devices related to minimally invasive procedures.” Such products, says Colella, have a very bright future from a venture-capital standpoint. For obvious reasons, the relationships among venture capital firms and biotech companies have shaped the landscape of the 101 Biotech Region. Since the time when U.S. Venture Partners and Asset Management Systems saw potential in a little shop called Amgen, the product of those interactions is a local professional culture that is collegial and a residential community that is affluent and close-knit. Dozens of companies, those companies’ employees, and those employees’ families can thank the University of Chicago’s queasiness about turning a profit for enabling them to live “the good life” in the Conejo Valley. “We came to the 101 geography and into the biotech venture industry at kind of an odd angle,” explains Arch Venture Partners co-founder Steve Lazarus. “We were created as a nonprofit affiliate of the University of Chicago, to help find ways to commercialize some of the innovative technology coming out of its partnership with Argon National Laboratories.” That was in 1986 and the Argon National Laboratory had a $600 million budget from the Department of Defense, a third of which was focused on biotechnology research. “The funny thing about faculty types is that they are conflicted by profit-making research, so they spun us out when we became profitable, and we became a regular venture partnership,” Lazarus said. “The first interesting deal we did in your area was Aviron, which was later acquired by Medimmune,” he says. ” Aviron is famous for the aerosol flu vaccine.” Advantages and challenges Now in its seventh fund, the company Lazarus co-founded manages more than $1.5 billion in capital. He credits the 101 Biotech Corridor for some of its investment success, and believes the area still has a lot going for it, but must also face some glaring challenges. “I think one of the biggest advantages you have is that you might be able to recruit a combinatorial chemist to a company because he or she knows there will be other opportunities in the area if something doesn’t work out,” Lazarus says. “Not a lot of other areas can say that.” That, he says, also makes the region attractive to venture capitalists. But Lazarus believes the area’s challenges are concrete and must be dealt with if new funding is to be secured. “The problems that go along with success are infrastructure,” he says. “It has gotten very crowded, and housing is a problem Amgen ran into.” Steven Lazarus was also a member of Amgen’s board of directors for more than a decade. But he believes business and government leaders can meet those challenges if they want investment in life science industries to flourish in the region. Both Versant and Arch are investors in a new type of biotech firm. Kythera is a well-funded start-up in Calabasas focused on bringing biotech-quality R & D; to clinical aesthetics, i.e., youth and beauty pharmaceutical products. Both Versant and Arch have multi-million dollar stakes in the firm, run by former Amgen-Europe head, Keith Leonard. Both venture funds are expecting big things from Kythera. “In five years we should have revenues north of $100 million,” Leonard says. “I don’t know if it will be $100 million or $300 million. Those may seem like tiny numbers compared to someone like Amgen, but that’s a big number for a startup in a short amount of time.” Kythera’s Series-B (second-round) funding came mostly from Arch Venture Partners. Leonard was attracted to Arch because of Lazarus’ reputation for bringing a substantive partnership to funding deals. He says getting capital from companies like Arch and Versant is a good thing, not only for the money, but also because of the relationships they bring to the table. In the case of Arch Venture Partners, those relationships include intimate rapport with university-based research scientists and finesse in working with academic institutions. “The difference between Sam (Colella) and Steve (Lazarus) and the MBA fresh out of Harvard would blow you away,” Leonard says. “They’ve spent decades building relationships that are invaluable.” With 25 employees, Kythera also has funding from Prospect Venture Partners, Wilson-Sonsini-Goodrich and Rosati (a biotech-specialized law firm), and Altitude Life Science Ventures, all of which are located in Northern California. Many funding options Startups along the corridor can look to a growing number of firms wanting to find and fund innovative life-science companies. Locally, the most active firms in 2007 were Redpoint Ventures, Clearstone Venture Partners, Rustic Canyon Partners, Palomar Ventures, Steamboat Ventures, GRP Partners, and Amgen, which now has its own VC funding unit. In addition to those companies, former Amgen CEO, Gordon Binder has a firm in West L.A. called Coastview Capital, which is small but growing. With Binder at the helm, Coastview has a unique perspective and access to people that would be the envy of any venture capitalist. Mega-VC firm Kleiner Perkins Caufield & Byers of Menlo Park is a longtime investor in the 101 Biotech Corridor. KPCB is still “In search of the next big idea,” according to the company’s marketing slogan. Of course, startups have the option that Alan Herman, co-founder of WindRose Analytica, exercised. Self-funding may not be as popular as traditional or venture-capital funding, but, says Herman, it does have advantages. “The advantages are the ownership not diluting it and much more fundamental issues of knowing our industry very well and being able to focus more closely on the client’s needs rather than the partners,” Herman says. The disadvantages he says are obvious. “Aside from the obvious, it also means we can’t always grow as fast as we want in this capital-intensive business,” Herman says. “For every new employee there’s also an investment in state-of-the-art equipment.” Nevertheless, WindRose Analytica has grown from three employees to nine, and Herman expects that number to double in the next 12 months. Regardless of the kind of funding individual or groups of entrepreneurs are interested in, there are resources to help them find a path to launching their brainchild into the world of biotech commerce. One local source is The Biotech Forum, a group founded by local business leaders Brent Reinke, and John Dilts. Reinke is an attorney with the Westlake Village office of Musick, Peeler & Garrett LLP, who also founded a networking and business-development organization known as the Gold Coast Business Forum. Dilts founded Maverick Angels and Dilts Ventures. Maverick Angels is a so-called next-generation investor network based in Agoura Hills, which invests in biotech firms, as does Dilts Ventures. The Biotech Forum hosts monthly “deal line-ups” and “Maverick Angels arenas,” where startups can present their idea to potential funding sources. The group also presents educational forums throughout the year and has a “bootcamp” for entrepreneurs. The Biotech Forum’s URL is http://thebiotechforum.com The Valley Economic Development Center has several programs aimed at helping startup businesses find funding. Visit http://vedc.org for information. Of course, there is always the Small Business Administration (sba.gov), which offers loans from $5,000 to $2 million.

How general aviation airports can get the message out to the public of their benefits to a community is among the topics for discussion next month at an American Association of Airport Executives conference. The association brings its third annual look at issues facing general aviation to the Van Nuys Airport from May 7 to 9. After holding the event in Colorado and Florida in previous years, the association wanted to bring it to the West Coast. As the world’s busiest general aviation airport, Van Nuys was the appropriate site, said Alex Gertsen, director of regulatory affairs for the AAAE. “When we reached out to LAWA (Los Angeles World Airports), without any hesitation they agreed to host,” Gertsen said. The conference kicks off with a private screening of “One Six Right,” a documentary from Chatsworth filmmaker Brian Terwilliger mixing the history of the Valley airfield with the love of flying. Two days of panels, a visit to the Ronald Reagan Presidential Library and Museum, an evening reception, and tours of the Van Nuys Airport will follow. Clay Lacy, one of the original air charter operators at the airport, gives the keynote address on May 8. The business of running an airport gets more complicated every year and the conference lets operators know what common issues face airports, said Selena Birk, manager of Van Nuys. “It is important to share expertise and successes and failures so we can be better at addressing those common issues,” said Birk, who attended last year’s conference in Florida. Birk will make an opening comment on the first day. Diana Sanchez, director of public and community relations, will take part in a panel discussion about how general aviation airports work with the media and community in providing information. Gertsen works with a conference committee to draw up the agenda of industry panels. Some, like the state of general aviation roundtable, are recurring. New this year are the panels on community and public relations. “General aviation airports are underappreciated; a lot of times it is important to emphasize their benefits,” Gertsen said. At Van Nuys, the airport has done public outreach on noise issues and works with the Los Angeles Unified School District to promote aviation and aerospace careers and stress the importance of science and math, Birk said. The conference also includes panels on minimizing the environmental impact of general aviation; best industry practices; and use of technology in general aviation. For more information visit www.GA IssuesConference.com.

Simi Valley Hospital is the latest medical center in the Valley to undergo an overhaul. On May 4, the hospital will have a dedication ceremony and community celebration in honor of its new $75 million Patient Care Tower addition. The hospital, which serves residents of Simi Valley, Moorpark and surrounding areas, is slated to open its new double-wing, four-story tower the second week of May, but the launch ultimately depends on the hospital’s performance on pending state licensure inspections. Construction workers are now putting the finishing touches on the project, the idea for which dates back to 2000. “There’s been significant development in this community,” Simi Valley Hospital Vice President Clif Patten said of the need for a new and improved hospital. “It (the community) has outgrown the facility we have. Our choice was either to lose it or have an up-to-date facility.” The new patient tower will increase the hospital’s total number of beds to 201 from 153 and its total number of rooms to 163 from 72. The tower is on a 146,000-square-foot parcel. Nursing space will be tripled, while total space will be quadrupled, according to Patten. Simi Valley Mayor Paul Miller agreed with his assessment that a new hospital was needed to meet the demands of a growing community. “They’re trying to keep pace, so we’re looking forward to continued improvement,” Miller said. “I think we have needed a facility like that for a long time.” The new tower will have 144 private care rooms, a new cardiac program and gastroenterology laboratory, an eight-bed neonatal intensive care unit and a 24-bed intensive care unit (ICU). The ICU features an elongated nursing station, so nurses can keep an eye on all beds in the unit, Patten said. There are also standalone toilet bowls in ICU rooms, so caregivers don’t have to carry waste through the halls. Additionally, the unit features what are called anti-rooms. Such rooms come with sliding crash doors to prevent the spread of infectious diseases. There is negative pressure in each room, which prevents air from escaping into other areas. Caregivers enter the room through a special side door where they suit up in protective coverings. Women and children In addition to the ICU, an entire floor of the new tower will be reserved solely for women’s and children’s needs. That floor will contain eight labor and delivery and recovery and postpartum rooms, twice the number the existing facility has. “The rooms are larger about a half-dozen people can fit inside of them,” Patten said. “The rooms are set up in the mode of surgical rooms in case there is need for a C-Section. Also, if the baby has any medical difficulties, the ICU is next door.” Businesswoman Elaine Freeman, who serves on the hospital’s strategic planning board and is a past chair of the Simi Valley Chamber of Commerce, is especially pleased about the expanded labor and delivery unit. “I think it’s a very positive impact with the single occupancy rooms and the baby delivery,” she said. “The services will just be increased ‘quantumly.'” Unlike in the existing facility, units in the new tower are clearly demarcated from each other. Now, there will be no overlap between patients and medical staffers from various units, which should cut down on confusion or unnecessary foot traffic. Also helpful in this regard is the new facility’s broader corridors. The alcoves featured in the new tower’s hallways give patients and staffers even more space to navigate. “The intent is to get rid of all the clutter,” Patten said. Another objective was to try to give patients the privacy and comfort they are used to at home. Now that nearly all patient rooms are private, they can have bathrooms to themselves, whereas before there were four patients to one lavatory. The rooms also contain sinks outside of the bathroom. “This enables patients to see caregivers washing their hands before giving care,” Patten explained. Patients may also control light settings and set room thermostats to their liking up to five degrees in either direction. Now that sleeper chairs are in rooms they can enjoy overnight visits from loved ones as well. Rooms also contain flat screen televisions and free wireless Internet. “We’re trying to provide comfort for family members,” Patten said. Easier to maintain To create a homelike ambience, floors in rooms are covered in sheet vinyl, which resembles hardwood. But the vinyl has more than an aesthetic function. Patten said that it is much easier to clean and maintain. “It has a rigidness, a non-slip surface,” Patten said of sheet vinyl. This is a comfort to patients who fear the possibility of slipping on floors. Explained Patten, “Older patients are afraid to walk on a floor that has a grain.” The artwork in rooms also has a dual function to give patients something beautiful to look at and to conceal the control panel of gases that give rooms a cold, clinical feel. Garden areas, viewable from some rooms, will also enable patients to transcend the sort of antiseptic ambience associated with hospitals. While patients will reap many rewards from completion of the new tower, medical staffers also stand to benefit. They can take advantage of improved parking and picnic areas, as well as a cafeteria. Of most significance to staffers, though, is the hospital’s adoption of Project IntelliCare, a $4 million computerized system that provides caregivers with instantaneous patient care information, such as vital sign readings, lab results and X-ray images. “It means a great deal to staff as well as the community,” Simi Valley Hospital Marketing & Communications Director Jeremy L. Brewer said of the medical center’s makeover. The new tower certainly takes the hospital a long way from 1965, when it was first built. The then 32,000 sq. foot, 50-bed hospital cost about $850,000 to build and served about 8,000 residents. “It was a situation of having it brought into the 21st century,” Freeman said of the new tower. “Technology has changed considerably the needs of people in hospital equipment requirements and that sort of thing. It had to be done to keep pace with what is right technologically.” Because the Simi Valley area has experienced rapid growth for years, design concepts for a new and improved medical facility first came into fruition eight years ago, according to Patten. Between 2002 and 2004 more concrete plans were produced. Some of the ideas for expanding and improving the hospital have yet to be realized, though. Next in line for a makeover is the hospital’s lobby. Its replacement, scheduled for completion next year, will be 7,000 sq. feet and sit on the north side of the hospital campus. It will contain a chapel, a piano, artwork and upgraded seating. Its doors will open into a community garden and a new Volunteer Guild gift shop. Construction on the new lobby will begin immediately after the new tower opens. In the next two years, there will be even more building. A cardiac catheterization and vascular lab will sit on garden level of the Patient Care Tower’s south wing, and a 444, 724-sq.-foot medical office will be built on Sycamore Drive, next to the Simi Valley Hospital Aspen Outpatient Center. The building will contain physician offices and provide outpatient services, among others. “I think it’s going to raise the quality of medical care in the community,” Miller said of the hospital’s branching out. “I’m glad the hospital was able to fund it. We’re looking forward to it in the community.” For more information on the Simi Valley Hospital Patient Care Tower Dedication & Ribbon-Cutting, visit the hospital’s Web site: www.simivalleyhospital.com.

Welcome to Valley Biz Seen, a new reader-driven feature. Send us your photographs of Valley business people being feted, awarded, commended or just taking part in interesting regional events. Don’t forget to include the names of the people in the pictures, a brief highlight of the event including when and where the picture was taken and contact information in case we have any questions. Photos should be a minimum resolution of 200 dpi and at least 4″ x 4″ in size.