Scott Silverstein
Senior Vice President Kidder Mathews
Scott Silverstein is a Senior Vice President with Kidder Mathews. He has over 38 years of experience specializing in commercial office leasing and investment sales. Scott was honored twice on the Valley 200 list by the San Fernando Valley Business Journal as one of the 200 most influential people in the Valley. He is a well-respected and sought-after authority in the region. Scott was selected to sit on the committee to create the Warner Center 2035 Specific Plan, one of the largest planned residential and business communities in the western United States. Scott’s background includes a broad spectrum of representation, providing clients with comprehensive, in-depth market intelligence to support marketing and negotiating strategies.
For decades, the hope of local bioscience industry leaders and elected officials has been that Los Angeles County would develop into a major bioscience cluster capable of attracting the billions of dollars in venture capital that the rival Bay Area and San Diego claim.
It’s now happening, but not quite as expected or hoped. Instead of developing into one megacluster that carries significant clout, the region has seen the emergence of four to six widely scattered “microclusters,” each spurred by one or more institutions that serve as a localized driving force.
The four established microclusters include:
• The 101 Biotech Corridor that has sprouted around Thousand
Oaks-based Amgen Inc.;
• The Santa Clarita Valley, which was the preferred location for the late serial biomedical entrepreneur Alfred Mann to place his companies and eventually a foundation that’s now called HuMannity;
• Westwood/Santa Monica on the Westside, with UCLA as its driving force; and
• The San Gabriel Valley, between Caltech in Pasadena and City of Hope in Duarte.
Two more microclusters are trying to emerge: one around Cal State Los Angeles and its new bioscience incubator just east of downtown Los Angeles, and the other in the South Bay around the Lundquist Institute/Harbor UCLA Medical Center. But so far, these two areas lack the critical mass of significant companies to qualify as clusters.
“Industry clusters, especially in bioscience, tend to develop organically,” said Walid Sabbagh, the new chief executive of the Westwood-based Southern California Biomedical Council, which both tracks and acts as a resource for the region’s bioscience industry. Sabbagh took over last year after the death of longtime chief executive Ahmed Enany.
Overall, according to a report published last year by the biomedical council and Teconomy Partners, the bioscience industry accounted for nearly 50,000 jobs in Los Angeles County in 2022, while the six-county region making up Southern California (excluding San Diego) had nearly 123,000 jobs at more than 5,400 business establishments. The average wage of bioscience jobs in the six-county region in 2022 was about $114,000, 60% above the overall private sector.
Hubs: Los Angeles County’s bioscience microclusters are centered around pivotal companies and educational insititutions. (Map c/o Southern California Biomedical Council)
The same report also looked at venture capital funding for both Los Angeles County and the six-county region (again excluding San Diego). From the start of 2019 through the third quarter of last year, the county drew about $5.4 billion in venture capital funds, about 55% of the regionwide total of $9.8 billion. Nationwide during that period, the sector attracted more than $250 billion in venture capital investment.
Sabbagh said four ingredients are generally needed to create a cluster: a driving institution such as a research university or institute; a mechanism for researchers to exit those institutions and start their own companies; the ability to pull in seed money or venture capital; and facilities for startups to use, including wet labs and animal-testing centers.
Once a cluster gets going, there needs to be a continual supply of talent and research funds – generally supplied by the driving-force institution – and venture capital to enable the companies to bring their therapies or medical technologies to market.
Often, it takes two or three bioscience company success stories in one of these geographic areas for venture capital firms to sit up and take notice, according to Brent Reinke, partner in the corporate securities group at Newport Beach-based law firm Stradling Yocca Carlson & Rauth. Reinke, who was instrumental in the creation of the 101 Bioscience Corridor, said that in the case of that cluster it was the success of a company called Kythera Biopharmaceuticals that prompted venture capital interest in other nearby companies. (Dublin, Ireland-based based Allergan bought Kythera in 2015 for $2.1 billion, providing a lucrative exit for venture capital and other investment firms.)
Likewise, the 2017 sale of Santa Monica-based Kite Pharma to Foster City-based Gilead Sciences Inc. for nearly $12 billion drew subsequent attention to the Westwood/Santa Monica area by venture capital firms.
This complicated interplay of foundational factors is a major reason why the region has so far been resistant to attempts from above to force the creation of one megacluster that would encompass all of these microclusters. In the early 2000s, industry leaders and local elected officials – particularly at the county level – attempted to create a single countywide cluster, but the effort eventually fizzled.
“Trying to impose the creation of a major cluster through a master plan just hasn’t proven very effective,” Sabbagh said.
Gavin Newsom, the governor of California.
But one recent development could change this – or at the very least make the Westwood/Santa Monica cluster the dominant one. Last month, Gov. Gavin Newsom announced $200 million in state funding to help establish the California Center for Immunology at the now defunct Westside Pavilion shopping mall in Westwood; the center will be run by UCLA, which purchased the mall for $700 million. The physical research center is projected to be completed in mid-2027, with recruitment of researchers and staff expected to take another couple of years beyond that.
“If this immunology center takes hold, within a decade you could see that area turn into a really major bioscience cluster of national significance,” said Dan Gober, the new executive director of the Los Angeles chapter of San Diego-based trade group Biocom.
In his role as the new executive director of the Los Angeles chapter of statewide industry resource and advocacy group Biocom California, Dan Gober’s goal is to provide a boost to the region’s bioscience industry and its local microclusters.
Gober came on board Biocom’s Los Angeles chapter late last year, replacing Stephanie Hsiesh, who left to helm a new initiative, Grow L.A. Bio, which is sponsored by the Los Angeles County Economic Development Corp., Biocom, Bioscience LA and the LARTA institute.
Prior to joining Biocom, Gober was himself involved in several companies that dealt with the region’s bioscience startups, most recently with Corval, a Boston-based platform that provides commercialization resources for bioscience companies. Earlier in his career, Gober spent 17 years as a pharmaceutical sales rep for Southern California and then statewide for what eventually became pharma giant AstraZeneca, which is based in Cambridge in the United Kingdom.
Gober sat down with the Business Journal to discuss the region’s bioscience microclusters, what can be done to boost them and a recent Biocom success in helping pass industry-friendly regulations in Pasadena.
How and why did bioscience microclusters develop in the Los Angeles region?
These microclusters more or less developed independently and organically out of certain key research centers. These centers are spread out geographically around the region, from Thousand Oaks to Pasadena to the South Bay.
Dan Gober, the executive director of Biocom Los Angeles, with Casey O’Neil, the organization’s policy and workforce development manager, in Biocom’s Sherman Oaks office.
What are these research centers and what has been their role?
For the most part, they are research universities that attract research dollars, including UCLA, City of Hope, Caltech, USC, and the Lundquist Institute down in the South Bay. Most of these research centers have incubators specifically designed to help researchers with therapeutic technologies to launch and grow companies. I’m thinking especially of the Magnify incubator at UCLA.
Amgen is a bit different, though.
Yes, Amgen scientists over the years broke off from the company to form their own companies nearby and that’s how the 101 Biotech Corridor got started.
Why has it been so difficult to turn these microclusters into one giant megacluster to rival the Bay Area, San Diego or Boston?
The Los Angeles region isn’t a compact area like La Jolla or the South Bay region of San Francisco or Cambridge in the Boston area. Also, because of these distances and the time it takes to travel between them, it’s difficult to go to and from meetings within different clusters, so there has been relatively limited interaction between the microclusters.
Has Biocom tried to change this and bring these microclusters closer together – maybe even create a megacluster?
We have held forums that bring bioscience industry leaders together, including one last fall that drew CEOs from more than 80 companies spread throughout all the microclusters. It was great, for example, to see Basil Dahiyat (the chief executive of Xencor Inc. in Pasadena) get to know and work closely with Frank Watanabe (the chief executive of Arcutis Biotherapeutics Inc. in Westlake Village).
But Biocom’s aim is not to create a megacluster; it’s to boost the companies within each of these microclusters and build resources for all the bioscience companies within the region.
Why has the Los Angeles region lagged considerably behind the Bay Area, San Diego and Boston in attracting venture capital dollars?
VCs have to have a belief that bioscience companies can grow here. They are only now just starting to come around. Ten years ago, the typical conversation between local startups and VCs was, ‘We love your technology and see that you are ready to spin out of the Magnify incubator at UCLA, but now that you’re ready to grow you really need to locate in Silicon Valley or Boston.’
Dan Gober, the executive director of Biocom Los Angeles.
Is this view changing?
The VCs are changing their attitude now because they are seeing more success stories of companies growing here. Look at Capsida in Thousand Oaks (which debuted three years ago with $140 million in venture capital), or Kite Pharma in Santa Monica (which was sold to Foster City-based Gilead Sciences in 2017 for nearly $12 billion) or Protomer Technologies in Pasadena (which was acquired in 2021 by Eli Lilly and Co. for upwards of $1 billion).
Another factor has been the establishment of Westlake Village Biopartners, a homegrown VC company (in 2018). That has shown other VCs that you can thrive by making investments in the Los Angeles bioscience marketplace.
We’ve had a major development in the Westside microcluster in recent weeks with the announcement of the California Immunology and Immunology Center, run by UCLA at the former Westside Pavilion. How do you expect this to impact the microcluster picture here?
Well of course it will boost the profile of the that Westside microcluster. But this immunology center has the potential to do a whole lot more. Right now, our local research centers are good at spawning companies that then can grow in the region. But this center can attract people from outside the region to come here. If you are in the immunotherapy space, once this center is up and running, then no matter where you are in this country – be it Boston or Texas – you will have to reckon with whether you need to have a presence in Los Angeles.
And can this benefit other microclusters besides the Westside area immediately around UCLA?
Yes, and that’s where an organization like Biocom can come in. We can reach out to companies in the immunotherapy space that are considering establishing a presence here and help direct them to affordable space and facilities in any of our microclusters.
You’ve been involved for several years with helping bioscience companies grow. How did that come about?
I can trace it back to the time I spent as a regional pharmaceutical sales rep in the late 1980s for what became AstraZeneca. I focused on the users of their pharmaceutical products, and that included research institutions such as UCLA and City of Hope.
More recently, I worked for companies such as Health Strategies Groupand Corval, that worked with emerging life science companies. At Corval especially, my role was getting to know emerging life science companies throughout California.
That’s where I first got exposure to the microclusters developing here in the Los Angeles region and first ran into the question about why Los Angeles isn’t considered in the same ranks as the Bay Area, Boston and San Diego.
What is your main goal at Biocom?
Biocom reached out to me last year with the goal of helping to bring L.A. into the same ranks as these other major metro areas when it comes to life science companies.
Any other goals?
Within that larger goal, I have two other goals: getting the microclusters to coexist and support each other more and making the local governments in the region more hospitable to life science companies.
On the first goal, I’m trying to lead an effort for more cross-pollination of ideas, more networking and especially more face time for local startups with VC firms. On that second goal, we’ve just scored a major success in Pasadena.
What happened in Pasadena?
We just got a major package of regulatory reforms passed in Pasadena that should make it considerably easier for life science companies to locate and remain there.
About a year ago, the city manager in Pasadena pulled together life science company reps and asked one question: ‘What can we do to make life easier for you here in Pasadena?’
The response from the industry: The city should make building permit regulations more flexible, particularly when it comes to ceiling heights, ventilation, onsite equipment permitting, waste disposal regulations and onsite parking. This working group brought a package of regulatory changes to the Pasadena City Council and the council passed this at the end of last year.
Business taxes have long been a major gripe of businesses across the board. Did this package of reforms include any changes on that front?
No. We focused on the regulatory changes.
Does getting this set of regulatory reforms passed in Pasadena carry any significance for the bioscience industry beyond that city?
Yes. This was one of the first places where we saw the rubber meet the road and actually made some changes.
We now have an example of a city in Los Angeles County that has made these changes and that can be used as a template for other cities, including the city of Los Angeles and the county.
Also, by making the permitting rules more flexible, it should be easier to site wet lab and other facilities vital to the industry in Pasadena. There’s a shortage of common wet lab space that startups can use to develop their therapies. (Wet labs allow researchers to safely experiment with liquids as they develop their drugs.)
Any other goals that you have for Biocom?
Yes. Growing the roster of our member companies is a key goal. We need to show them the value we can bring to make an impact, both in government policy and in making resources available. On the government policy, we have just shown what we can do in Pasadena.
Project: A commissary is slated to open on this property in Sylmar by the end of the year. (Photo by David Sprague)
Nonprofit groups and city officials are working to make it easier for sidewalk vendors and food truck operators to comply with Los Angeles County Department of Public Health regulations.
In one recent example, Initiating Change in Our Neighborhoods Community Development Corp., better known as Icon CDC, has provided a loan to help construct a commissary for San Fernando Valley sidewalk vendors and food truck operators. The proceeds for the loan came from a $1 million state grant awarded to Icon CDC.
The commissary, which will be located in Sylmar, will be owned by The Food Truck Group.
RobertoBarragán, managing director of Icon CDC, said that the Los Angeles County Department of Public Health requires all food vendors to have a partnership with a commissary.
“It’s some place where they can park their equipment, clean it, resupply it and in general comply with public health rules around food preparation,” Barragán said.
Maria Ponce and Kim Tapia, the mother and daughter team who own The Food Truck Group, said they are excited about the venture.
“They decided to help us with a loan to build a commissary because it is a necessity for the Valley,” Ponce said of the relationship between her company and Icon CDC.
A partnership in the works
Tapia said that The Food Truck Group bought the property in Sylmar in October 2020 with plans to build a commissary on it.
When Ponce and Tapia began working with Icon a couple of years ago, the nonprofit had just launched its street vending program and was awarding grants to individuals who owned carts or trucks, Tapia said.
Tapia said Icon CDC was receptive to the idea of a commissary, even though it did not have the money to support the venture initially.
In the meantime, The Food Truck Group provided street vending carts to the individuals who received grants from Icon CDC, Tapia added.
“Finally, in the last couple of months is when we sat down with Roberto and his team and they offered us a loan to build out a commissary on the property that we had purchased for that purpose,” Tapia said.
She declined to disclose the amount of the loan.
More commissaries are needed
In the Valley, there are only seven commissaries serving hundreds and hundreds of trucks and carts, Barragán said. He added that there is no room for new clients at any of the existing facilities.
“So people, besides having to pay for a permit, having to go through all the rules and having to drive all the way to Baldwin Park to get permitted, also are dealing with a lack of commissary space,” Barragán said.
Elizabeth Padilla, the social entrepreneurs for economic development program manager at Icon, estimated that it could take as long as a year to complete the process of building the commissary.
The commissary, which Barragán hopes to have open by the end of the year, will be able to serve about 40 to 50 food carts and 35 food trucks.
Barragán said the addition of a grease trap for emptying out a food truck or vending cart’s waste, a bigger storage facility and room for repair and maintenance are still needed to create the Sylmar commissary.
“The lot needs to be paved and infrastructure and power put in for access by food carts and food trucks,” he added.
Icon CDC is not the only organization working to making things better for street vendors.
On Feb. 9, Los Angeles City Councilmember Eunisses Hernandez introduced legislation to support sidewalk vendors in the city and address longstanding gaps in related services.
She represents the 1st District, which includes parts of northeast and northwest Los Angeles, including Chinatown, Echo Park, Koreatown and MacArthur Park.
“Sidewalk vendors are part of the fabric of Los Angeles, and they play a critical role in our culture and local economy,” Hernandez said in a statement. “There have been important wins in recent years that have decriminalized sidewalk vending, but the city needs to do more to open up pathways for these entrepreneurs to be able to thrive.”
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Call it the Battle of the White Cards versus the Blue and Green Cards.
The Walt Disney Co. is encouraging shareholders to vote the white card in the proxy fight going on between the company and activist investors.
The white card selects the 12 board of director nominees put up by Disney for re-election at the annual shareholder meeting that takes place on April 3.
In a Feb. 1 letter to shareholders, the board of the Burbank-based entertainment and media giant asked that they not vote for the candidates indicated on the blue card, from the Trian Fund Management, or the candidates on the green card, who are from Blackwells Capital LLC.
“Please disregard and discard those cards,” the letter read.
Trian is the private equity firm run by Nelson Peltz, who holds approximately $3 billion in Disney shares. In a letter to shareholders also sent on Feb.1, Peltz encouraged them to vote for him and Jay Rasulo, the former Disney chief financial officer, as new independent members of the board.
Nelson Peltz
Rasulo owns about $600,000 in Disney shares.
“Despite Disney’s enviable and unique position in media and entertainment, its stock price is half what it was less than three years ago, and Disney shareholders – like you and us – have collectively lost nearly $200 billion of our investmentin that time,” Peltz’s letter said. “Disney’s recent creative efforts have disappointed its once-loyal customer base and have caused losses for shareholders.”
Blackwells, meanwhile, encouraged shareholders to vote for its own slate of board candidates – Jessica Schell, Craig Hatkoff and Leah Solivan – and to reject Peltz and Rasulo.
Schell has extensive experience in the entertainment, technology and retail industries as an executive with Warner Brothers Discovery and NBC Universal. Hatkoff brings real estate expertise and some entertainment experience as well; he was a cofounder of the Tribeca Film Festival. Solivan, meanwhile, is a tech entrepreneur and venture capitalist and has led several successful funds that invest in consumer, software-as-a-service and infrastructure companies.
“In our view, only Blackwells’ highly qualified candidates are in a position to support Disney’s transformation efforts, addingexpertise that is demonstrably lacking, while making sure the Disney Board doesn’t become a forum for personal grievances and reckless behavior,” the investment management firm’s release said. “Moreover, Disney’s preliminary proxy statement paints a picture of a board focused less on transforming the company and more on preventing contrarian viewpoints and expertise from entering the boardroom.”
Disney did not respond to a request from the Business Journal about whether it had any comment on the letters from Peltz and Blackwells.
Jason Aintabi, the founder and chief investment officer of Blackwells, said in the company’s release that the Disney board should meet with Blackwells’ three nominees “in order to promote the free-flowing exchange of ideas that comes with constructive collaboration.”
In its letter, the Disney board said that both the Trian and Blackwells slates of candidates under consideration lack the appropriate talent, skill and expertise to effectively support its ongoing efforts to drive profitable growth and shareholder value creation in the face of continuing industry-wide challenges.
“Your board believes that the attempts by the Trian Group and Blackwells are likely to derail Disney’s progress, as election of any of their less-qualified nominees would hinder the transformation efforts underway,” the board’s letter said.
Peltz stressed in his letter that Disney had lost its way.
“In our view, Disney’s strategic missteps and declining financial performance can be laid at the feet of its board, which we believe lacks focus, alignment and accountability,” Peltz wrote.
The current board does not want Trian’s candidates inside the board room, perhaps out of a desire not to face hard questions and a focus on shareholder value, Peltz continued.
The Disney board seeks to exclude the Trian candidates and appease shareholders with the appointment of two new, hand-selected directors who were chosen without shareholder input, he added.
Peltz was referring to the appointments of James P. Gorman, chief executive of Morgan Stanley, and Sir Jeremy Darroch, a veteran media executive and former group chief executive of Sky, as new directors.
In other Disney news, the company has entered into a deal with ESPN, FOXand Warner Bros. Discovery to form a new joint venture to develop, launch and operate a streaming sports bundle of linear networks and certain direct-to-consumer sports content and services. The new network will include games from Major League Baseball, the National Football League, and the National Basketball Association, as well as soccer, golf, hockey and auto racing. More details, including pricing, are forthcoming, according to Disney.
