It comes as no surprise that the Los Angeles area fosters a wide array of businesses in the anti-aging industry.  From plastic surgeons to anti-wrinkle eye cream manufacturers,  there are tons of businesses that are headquartered here. However the cost of doing business is much higher in Westside communities like Beverly Hills, Santa Monica,  and West Hollywood.  In turn, many companies are opening up shop in the San Fernando Valley instead.

Toby Gower,  for example, owns an upstart anti-aging eye cream business. Initially, he ran the company out of his apartment in WeHo. But once the company grew and it was time to get an office, he chose Van Nuys. “Simply put, I can’t afford to manufacture my wrinkle cream on the other side of the hill.”

Gower’s company uses a unique formula for his vitamin K eye cream.  However,  vitamin K is a substance that is destroyed by light.  In turn,  in order to make vitamin K eye cream a special facility is needed. “Not only did I find an affordable location to do this in the Valley, but I also found a nearby supplier for copper peptides,  which is another ingredient I use.”  It just so happens that there was a wholesaler of copper peptide cream a few miles from Gower.

Even after the economy fully recovers,  it’s likely we will see more and more skin care and anti-aging companies re-locate to the Valley since it’s a more affordable place.

Even the most simple cosmetic surgery procedures are far from cheap.  A simple Botox touchup can easily run $300 to $500.  More complicated procedures, like a face lift or revision rhinoplasty, can cost as much as $20,000 or more after you add in the costs of the operating room and anesthesia.

Before the recession, Beverly Hills used to be the hotspot for plastic surgery. Now that people are more budget conscious, more Los Angeles residents are heading to the San Fernando Valley to get their nips and tucks.

Tracy Goodman, a volunteer moderator for PlasticSurgerySpot.com (which is a plastic surgery message board) says that she sees more and more people heading to the suburbs to save money. “For relatively simple procedures like Botox and laser treatments, it just doesn’t make sense to pay the 90210 premium price, when there are qualified plastic surgeons just ten miles away that will do it for 30% less” she says.

However when it comes to more complicated procedures, like revision rhinoplasty, Tracy stresses the importance of going with the best, wherever they may be. “I hear about so many nose job horror stories on the rhinoplasty forum. Because it’s such a challenging surgery, I think that’s one procedure to definitely not price-shop.  Unfortunately most of the top rhinoplasty surgeons in Los Angeles do tend to be based in Beverly Hills. That being said,  I do know a good one in the Glendale area, too.”

It has been estimated that 7% of Americans suffer from acid reflux symptoms on a daily basis and 14% on a weekly basis.  Current medical consensus states there is no cure for most forms of acid,  and in turn,  many sufferers are forced to visit a doctor regularly for treatment.

Lynn Marie, who is a registered nurse and insurance case manager, says that acid reflux is a big money maker for local doctor offices. “Because some of the medications are prescription, patients are forced to visit their doctor regularly for refills. This has been generating significant revenue for physicians in the San Fernando Valley.”

But it’s not just the doctors that are profiting off the condition… drug stores and pharmaceutical companies are also reaping the rewards. “Most of the newer over-the-counter acid reflux medications will run you about seventy-five cents to one dollar per day” says Lynn.

Lynn suspects that increased awareness of acid reflux symptoms is the main reason it’s such a booming niche. “Drug companies are spending millions advertising acid reflux,  also known as gastroesophageal reflux disease (GERD).  This leads to more people visiting doctors to inquire about it,  if they suspect they suffer from the symptoms.”

Providence health & Services Foundation raises millions of dollars and keeps Providence hospitals functioning with cutting-edge technology and services, hospital leaders say.

“Without the foundation, we wouldn’t have many of the cutting-edge technology that we have here at the hospital,” said Julie Sprengel, chief operating officer at Providence St. Joseph Medical Center. “They’re the crucial link between our community and our patients and the hospital.”

The hospital foundation, with about 26 staff members, raised about $40 million for the creation of The Roy and Patricia Disney Family Cancer Center at Providence St. Joseph Medical Center in Burbank, said Patricia Modrzejewski, the foundation’s president.

The foundation also has campaigns to help raise funds to renovate cardiac and pediatric care units at Providence Tarzana Medical Center and to build a neuroscience institute at Providence St. Joseph Medical Center, Modrzejewski said. Another campaign is helping build a 136-bed patient tower at Providence Holy Cross Medical Center.

“We have $38 million of projects going on right now,” Modrzejewski said. “We run our operation as a business. … We understand that if we don’t have a good return on investment, that donors will not support us.”

Sprengel said the foundation is successful because its workers know how to properly interact with its donors.

“The know how to work with our community in the time that they’re most vulnerable and turn it into something good,” Sprengel said, adding that foundation workers have to be more sensitive when approaching patient donors. “Those who work in the foundation not only have to be experts in philanthropy, but also have an understanding of health care.”

Modrzejewski said the foundation reaches out to all types of donors, including patients, hospital staff, community members and businesses. It recent years, it has increased its philanthropy education efforts, she added.

“We already have a giving and compassionate culture, and so we’re trying to integrate philanthropy within the culture,” she said.

When Michael Hoefflin Foundation throws a party, people show up – 750 to 1,000 people, to be exact.

The Santa Clarita-based organization that raises funds for children with cancer is recognized for its successful annual Evening Under the Stars Gala.

The organization uses silent and live auctions, sit-down dinners and headliner concerts to attract people to the annual event, which has been held for nearly 17 years.

Executive Director Jeffrey Shapiro said the organization makes the gala a success by its utilizing its planning committee, as well as the community.

“We wouldn’t be able to pull it off without literally the hundreds of volunteers, over 200, volunteers, who help make it happen,” he said. “People in this community are very committed and they want to help. When we ask, they respond.”

Each gala brings in about $250,000 to $400,000, contributing about 40 to 50 percent of the organization’s annual budget.

The foundation uses social networking, local media, bus shelters and other methods to advertise the fundraiser.

Shapiro said performing artists such as Earth, Wind and Fire help attract the crowds. So does the organization of the event, he added.

“I think we have a reputation for the quality and caliber of how the event is produced, as well as the heart and emotion that is involved with the event,” Shapiro said.

Santa Clarita Councilwoman Marsha McLean, who attended the gala last year, said one thing that makes it so successful is the foundation’s ability to bring in people from all over the region.

“Michael Hoefflin Foundation has reached out to beyond our valley,” she said. “That’s very important (in) standing out among some of the others because they have such widespread support.”

A Los Angeles County judge rejected a lawsuit challenging the expansion of Henry Mayo Newhall Memorial Hospital in Santa Clarita.

The Santa Clarita Organization for Planning the Environment sought to stop the expansion of the hospital on the grounds that the City of Santa Clarita had abused its discretion in approving the project.

The court found there was “substantial evidence” the city followed its own development code and that an environmental impact report included a comprehensive analysis of the aesthetic impacts.

The expansion project that includes the addition of up to 120 beds, a neonatal intensive care unit, expanded imaging services and intensive care unit, and more surgery suites has been in the works for at least four years.

The hospital looks to begin construction in March on a new parking structure and helipad that will improve parking and emergency care, said President and CEO Roger Seaver.

“Our community depends upon the services of its only hospital and it is imperative that we move forward with the master plan development so we can continue to provide our residents with the highest level of community health care,” Seaver said. “We will continue to work with the entire community to make the Henry Mayo Hospital campus the best it can be.”

There’s no doubt the greater San Fernando Valley area is a hub for biotechnology, medical device and related companies. It’s home to Amgen, Advanced Bionics, MannKind, Medtronic, Pharmavite, and other established and start-up firms.

Yet, the region has never gained a reputation as a biotech and medical device “cluster” on par with San Diego and the Bay Area. And the lion’s share of investments and companies in these industries is going to the latter.

Many industry experts believe the greater San Fernando Valley area has the potential to boost its standing as a biotech and medical device cluster and attract more companies and capital. But there are still a few hurdles slowing down growth.

This special report explores the region’s biotech and medical device infrastructure – the foundation for growth. As a point of reference, it looks at what led to San Diego’s ascent. And the report explores local educational, financial, technology transfer and real estate infrastructure that support these industries.

San Diego’s biotechnology cluster includes more than 400 life sciences companies; numerous world-class research institutions; business incubators; and myriad financial firms, real estate firms and industry advocates that support the local industry.

Many are bunched into a few mile stretch from Torrey Pines Mesa to the Sorrento Valley. And the cluster, which trickles into surrounding communities, attracts hundreds of millions of dollars in research and development and venture capital investments annually.

“What has made this cluster a success is reaching a critical mass of research institutes, scientists, entrepreneurs and money,” said Terri Somers of the life sciences trade group BIOCOM. “We see places around the globe interested in creating what San Diego has.”

The catalyst

The first factor that led to the creation of San Diego’s biotech cluster was the existence of world-class life sciences research institutes, many of which are located on Torrey Pines Mesa, said Somers. The defense industry historically operated in the area.

In 1978, Dr. Ivor Royston, a UCSD scientist, co-founded one of the area’s first biotech companies, Hybritech. The well funded firm developed diagnostic kits and other products. In 1985 it developed a successful prostate cancer test.

Eli Lilly purchased Hybritech in the mid 1980s for $400 million, said Somers. After the purchase, Royston and other former scientists from the company reinvested proceeds from the sale into launching several other life science companies in the area.

“It’s an evolution not a revolution,” said Somers, adding plenty of vacant office space, and close proximity to UCSD and other research facilities in Torrey Pines Mesa fostered the geographic clustering of companies.

Biotech is also an appealing industry because it’s relatively clean, salaries are good, and money boosts the quality of surrounding communities, she added.

Former Hybritech managers are widely credited with “seeding” the San Diego biotechnology industry, said Steven Casper of the Keck Graduate Institute of Applied Life Sciences in an August 2009 study about California biotech clusters.

They founded or took senior management positions in at least 12 companies formed between 1986 and 1990, said Casper. And a 2002 study found more than 40 biotech companies in San Diego employed people linked to Hybritech.

Investment uptick

Wall Street increased investment in life science companies during the 1990s, further fueling growth of the area’s cluster, said Somers. San Diego gained a reputation as a biotech hotbed and has been marketed as such. The large number of firms operating in the area led to a lot of innovation.

“You can’t go to breakfast or to a mall here without running into someone you know,” said Somers. “A lot of these people have worked together and collaborations are very common.”

The City of San Diego also supports the growth of life sciences in the region, said Jason Anderson, VP of business development for the San Diego Regional Economic Development Corporation.

The city does not offer a large incentive package to companies moving to the area, he said. But it helps existing companies obtain permits quicker. San Diego Regional Economic Development Corp invests in marketing the region. And the city helped launch a business incubator.

“What the cluster has created is a place where companies want to be,” said Anderson. “We consider ourselves a competitor (in terms of attracting new companies) to any region in the country.”

Anderson attributes the region’s success largely to the amount of quality R&D being done by local institutes. UCSD, the Salk Institute for Biological Studies, Sanford-Burnham Medical Research Institute, and Scripps are a few of the facilities.

Access to that R&D helps drive innovation, he said. And San Diego is a diversified high tech economy that does not solely rely on biotech. The convergence of multiple technologies also fuels innovation.

The National Institutes of health doled out $1.2 billion in funding to San Diego County life sciences firms and research organizations in 2009 alone, said Somers. Venture capital firms invested $185 million into 15 San Diego deals in the fourth quarter of 2009, according to the PricewaterhouseCoopers MoneyTree report.

San Diego vs. L.A.

Casper said the Los Angeles region, including the San Fernando Valley area, is well placed geographically – smack in the middle of San Diego and the Bay Area, has anchor companies such as Amgen, an inventor culture, and access to R&D institutes such as UCLA and Caltech.

L.A.’s biotech and medical device industries have not developed more robustly because the area has not generated a sufficient marketplace for ideas needed to support activities of entrepreneurs, scientists and investors. The biotechnology industry is highly collaborative and failure prone, said Casper in the 2009 biotech cluster study.

“There are a lot of inventors in the area but they’re more isolated,” he said in a telephone interview. “There are signs of life for sure with former Amgen people starting companies such as Kythera Biopharmaceuticals. And there are bridge groups and angel investors.”

Another positive is that Amgen employees are a little more transient than years past, which boosts the region’s level of available talent and intellectual capital.

However, the L.A. region lacks available and inexpensive laboratory space. The labor pool is more likely to move to San Diego or the Bay Area. The region also needs more sources of funding and networks for scientists and other industry professionals.

“The ingredients (in L.A.) are far better now than ever,” said Casper. “You need a catalyst. The hard part is how to get that critical mass. And you gotta have highly credible people willing to stake a claim on the area.”

Grossman Burn Center officials said they will be able to expand their facility once it relocates from its 40-year-old home at Sherman Oaks Hospital to West Hills Hospital & Medical Center.

Dr. Peter H. Grossman, co-director of the Grossman Burn Centers, explained that limited resources at Sherman Oaks Hospital had impeded the burn center’s ability to grow in recent years.

“This will be a very emotional move,” he said.

Since its founding in 1969, Sherman Oaks Hospital had been Grossman Burn Centers’ flagship location and the place where Grossman spend much of his childhood watching his father, founder Dr. Richard Grossman, treat burn patients.

Later, he would also call Sherman Oaks Hospital home during 15 years of private practice. In the course of four decades, both he and his father formed strong bonds with the hospital’s staff, he said.

“But there are times when you reach a fork in the road and you know you have to go in one direction to continue to grow, and I feel we’ve reached that fork in the road. I’m very excited about what the future holds.”

Sherman Oaks Hospital was acquired in 2006 by Prime healthcare Services Inc. and changes brought forth by the acquisition resulted in tightened resources at the facility.

At the new location in West Hills, where the burn unit will have access to the hospital’s staff, equipment and facilities, Grossman expects the burn center will increase patient load by 15-20 percent just in the first year.

“It will allow us to grow as a unit from a technological standpoint and a research standpoint”, he said.

Additionally, the center will also profit from a greatly expanded specialized medical staff at West Hills Hospital.

“The main factor was the willingness of West Hills Hospital to invest in the Burn Center and invest in the community in a way that allows us to continue our legacy and continue our goal to improve,” he said.

Beneficial for both

The move will prove mutually beneficial, said Beverly Gilmore, West Hills chief executive. The burn center’s “long prestigious history and reputation” will be an important addition to West Hills Hospital, she said.

“The medical staff is all very pleased that they’re coming, we’re looking forward to having them here.”

West Hills Hospital is owned by Tennessee-based HCA Inc., also known as the Hospital Corporation of America, which owns nine facilities in California.

In recent years West Hills has begun a transformation into a more regional hospital that provides high-end services, and the addition of the burn center speaks to the upward trajectory, said Gilmore.

The burn center will move to its new location just as the West Hills Hospital & Medical Center is completing a $60 million expansion, projected to open in the spring of 2010.

The expansion includes a new emergency department, intensive care unit and outpatient services. The expansion will give West Hills Hospital the largest emergency department and intensive care unit in the San Fernando Valley.

The addition of the burn center will require initial investments in infrastructure and technology from West Hills Hospital, said Gilmore, among them installing equipment for hyperbaric oxygen therapy.

Relocating the burn center out of Sherman Oaks Hospital had been in the works for a year and a half, said Grossman, who emphasized it was their priority to remain in the San Fernando Valley.

“To leave this community would have been a disservice; it would have been a very painful separation.”

The for-profit organization has also been looking to grow outside the Valley.

Grossman Burn Centers, which has a location in Santa Ana, opened a site in Bakersfield at the San Joaquin Hospital two months ago. A burn center is scheduled to open in Lafayette, La. in mid September.

Looking nationally

Grossman Burn Centers is looking at demographic areas around the country that call for a burn unit, among them Arizona, Texas and northern California, for possible future sites, he said.

Dr. Prem Reddy, Chairman of the Board of Prime healthcare Services, which owns Sherman Oaks Hospital, wished the burn center well at its new location.

“We are very happy that we had a long and beneficial relationship with the Grossman Burn Center. We wish them all the best at West Hills Hospital and Medical Center,” he said in a statement. “We are happy that the expert services of Drs. Grossman will remain available to the people of the San Fernando Valley.”

The Grossman Burn Center, renowned for treating high-profile burn victims and offering services that include acute care, reconstruction, rehabilitation and psychological counseling, is the only burn unit in the San Fernando Valley, and one of only three in Los Angeles County along with Torrance Memorial Burn Center and L.A. County Burn Center.

The Center, known for its treatment of firefighters and children, has also treated several celebrity patients. Most recently rocker Travis Barker, drummer for the band Blink-182, and the late celebrity disc jockey Adam “DJ AM” Goldstein, were treated there.

The Antelope Valley is known for many things but an abundance of healthcare facilities is not among them.

At one time the area had five hospitals. Due to closures, that gradually was reduced to just two – Lancaster Community Hospital and Antelope Valley Hospital.

That is changing, however, with the construction of the new Palmdale Regional Medical Center, a project undertaken by the publicly-traded Universal health Services, the owner of Lancaster Community.

Bob Trautman, the chief executive for the past seven years at Lancaster Community, will also oversee the new medical center. Trautman has more than 30 years experience in hospital administration gained at facilities in Texas, Louisiana, and Tennessee as well as California.

Question: What is the status of the Palmdale Regional Medical Center?
Answer: It’s currently under construction, full speed ahead. We anticipate completion in the fourth quarter of this year. After it’s completed we need to get a certificate of occupancy, then equip it, supply it, orient staff and get it licensed. We anticipate 60 to 90 days for that to happen. Given that timeline we hope to be open by February 2010.

Q: How involved have you been with that project?
A: I’m getting more so. Universal health Services, the parent company, has a separate design and construction division that monitors the construction on site. We as operators are more involved as it relates to equipment selection, and the business development aspect of the campus. Now since we are so close we have transition teams set up in various areas. These teams are doing a lot of the in-house work to prepare for the opening in Palmdale.

Q: What does it mean for the Antelope Valley to have this new medical center?
A: Bringing more bed capacity to the Antelope Valley is important. We have studies that show about 35 percent of hospital admissions by people who live in the Antelope Valley take place outside the area with the San Fernando Valley and West Los Angeles being the most common locations other than here. There are many reasons for that, one of which is the beds available in the community; also (lack of) primary care and specialty physicians. We are very actively recruiting both and we’ve had success in bringing both to our Palmdale campus, in the medical office complex that is now completed. Given that scenario, access to care is going to be easier. We’re going to have an emergency department with 35 beds that is going to add capacity. Traditionally both hospitals, Lancaster Community and Antelope Valley Hospital, have had bottlenecks at the emergency department levels just because of the volume. We will certainly be able to alleviate some of that with additional beds and physician coverage.

Q: There has been a hospital in Palmdale once before, right?
A: There was at one time. It closed in 1996. Now Palmdale is the largest city in California without a hospital.

Q: What is the business development aspect to the new campus?
A: The primary focus there is on physician recruitment. We have a shortage of physicians in both the primary care specialties and surgical specialties. We are looking at various programs to keep people locally. We are hoping to enhance our cardiac program in Palmdale, and looking at some other opportunities, including new services. We will have obstetrics and pediatrics where we don’t have them here now. We will also have neo-natal intensive care.

Q: Have you been hearing from the business community about how it is anticipating the new medical center?
A: We’re partners with the city of Palmdale on this project. They realized early on that to grow and prosper and draw new industry to the area they needed infrastructure, including health care. So they are very excited about this obviously. Just the fact that it’s going create new jobs, additional tax base and given its location and notoriety it is a very visible project in the business community.

Q: The medical offices built by outside developers add to the campus, don’t they?
A: We are working closely with those developers. If we can recruit physicians and for some reason they do not want to go into our medical office building, we want them in the proximity of the hospital because it is advantageous to us. We are working with them to fill their space as well. It has been slow, quite frankly. As we get closer to the completion of the hospital the more activity we are seeing. I anticipate throughout this year the interest and activity will pick up.

Q: Considering what is going on in the economy, is this a good time to open a new medical center?
A: Probably not. The economy goes in cycles. We are seeing some downturn not necessarily in business but in a patient’s ability to pay because of unemployment; even those who do have insurance you see co-pays and deductibles going higher and it’s harder to collect. I think everybody is experiencing that. We feel we have opportunity with the new hospital. The need and the market are there. The strategy of Universal Health is to build in markets such as this, high growth areas.

Q: When Palmdale opens you will be chief executive of both that facility and the one in Lancaster?
A: We are not certain what we are doing with this hospital yet. We may be selling it. We are talking to a couple of different parties. What we’d like to do here is provide services that are complementary to what we are doing in Palmdale. We have a rehab unit that is going to stay here. We are talking about doing some other things. The reason for that is it gives an area to place our patients when they no longer need an acute inpatient stay. We’ll free up beds at both Palmdale and Antelope Valley Hospital using this hospital as a specialty hospital.

Q: Having worked in other states, how does California compare in terms of the health care industry?
A: California healthcare is totally different than most areas of the country. Our company has hospitals in most of the Sunbelt states and California is probably one of the toughest markets because of the regulatory requirements, particularly as we build a new hospital. The construction standards are so much more stringent. To give an example, we have a hospital in Nevada that broke ground a month after we did in Palmdale and they are going to be operational before we’re open. Mandatory nurse staffing is unique to California. The wage and hour laws are unique. It is more difficult to function in California than in most states.

Q: Speaking of staffing, does Lancaster Community face a shortage of nurses?
A: Fortunately because of the notoriety of the new hospital, we’ve been successful at recruitment. We also have a close working relationship with Antelope Valley College and their nursing program. We support, as does Antelope Valley Hospital, faculty positions there. We have a program called Adopt-A-Student where we pay tuition for students and they make a commitment to our hospital. We have a good feeding ground of nurses coming in. We hear there are a lot who live here working in the San Fernando Valley for example who, once the new hospital is open, have an interest in coming back here.

Q: Has Lancaster Community needed to make staff cuts like other hospitals in the region?
A: We’ve had some, but not on a major scale. Most of the time when we look at layoffs, we redistribute staff into positions where we have vacancies so people aren’t actually losing jobs. It has happened on occasion that we may eliminate programs or something of that nature but we have not done anything because of the economy that we wouldn’t have done in the normal course of operation to keep it efficient.

Alan Herman, a former Amgen employee, and his business partner, launched Camarillo-based WindRose Analytica in May 2005. Their goal was to sell the biotech and biopharma analytics firm in five years time.

The duo, which funded the start-up out-of-pocket, beat their goal by a year, and did it in the middle of the Economic meltdown. San Diego-based biologics and pharmaceutical firm, Althea Technologies, acquired WindRose in May 2009.

Details of the transaction were not disclosed. But, in negotiating the contract, Herman insisted that WindRose and its seven employees stay in Camarillo.

“There are a lot of advantages to being acquired because we have a very capital intensive business,” said Herman, now vice president of product development and chief scientific officer for Althea.

The Valley biotech start-up scene has changed quite a bit since the Business Journal’s last report on the industry in April 2008. Some companies have pulled out of the Valley, but others have commercialized products, been acquired, and/or secured additional venture capital.

Commercializing Energy crops

Thousand Oaks-based Ceres, a company that uses plant breeding and biotechnology to develop dedicated Energy crops for biofuels, commercialized its high-yielding switch grass cultivars and high biomass sorghum hybrids.

The private equity-backed company, which has 100 employees, is selling Energy crops to bioenergy companies in the U.S. It also established the largest field trial network for dedicated energy crops.

“There are other biotech companies looking to get into this business,” said Ceres spokesman, Gary Koppenjan. “But Ceres has the early mover advantage; we were the first into the marketplace.”

Koppenjan said the company is benefitting from federal efforts to spur clean energy development, because many end users of the energy crops are receiving federal funds.

Ceres started as a plant genomics company. It operated in Malibu and eventually settled in Thousand Oaks. In 2002, Monsanto struck a $137 million licensing agreement with Ceres. Founders then applied their technology to the energy crop sector.

KYTHERA secures capital

Keith Leonard launched Calabasas-based KYTHERA Biopharmaceuticals in 2005, after a 13-year career at Amgen. The privately held company, which has about 30 full and part-time employees, is developing three products for use as aesthetic medicine.

“When I started the company I was looking for where science and innovation could meet market demand,” said Leonard. “Aesthetics did not have a lot of scientific and clinical rigor, with the exception of products like Botox.”

The company has secured more than $70 million in venture capital. Most recently, it received a $10 million infusion of venture capital in the third quarter of 2009, the only biotech company in the Los Angeles area to do so.

KYTHERA has completed multiple Phase II trials for its flagship ATX-101 Adipolytic Therapy product and is working with the FDA to determine the next clinical step. The product is still several years away from commercialization, said Leonard.

The company’s ATX-202 pigmentation modification product is in Phase I trials and Leonard expects to receive data by the end of the year. And ATX-104, a facial contouring product, is in the pre-clinical phase. Regulatory filings are underway.

Leonard said nine months ago he was worried about where the market was headed. But financial statistics show while the aesthetic procedure industry dropped during the recession, it’s bouncing back pretty quickly.

Symyx acquisition

Byeong Chang, who worked at Amgen for 11 years, founded Camarillo-based Integrity Biosolution in 2003. The firm provides contract formulation research services to biopharmaceutical and biotechnology companies.

Symyx Technologies acquired Integrity Biosolution in an all cash transaction on August 14, 2008, according to Reuters. The acquisition expanded Symyx’s Research Service offerings in life sciences into biologic formulations, complementing the company’s chemical formulations services.

“Together, IntegrityBio and Symyx will be at the forefront of large molecule contract formulation research and clinical fill/finish services,” said Chang at the time of the acquisition. He is now chief scientific officer of the Symyx Contract Development and Manufacturing Organization. And Symyx maintains a presence in Camarillo.

Lean and mean

John Philo and his business partner, both former Amgeners, founded Thousand Oaks-based Alliance Protein Laboratories in 1998. The firm provides contract research services and consulting in the areas of biophysical characterization, protein purification and protein stabilization.

Many contract and research labs in the greater San Fernando Valley area have been hit by the down economy, said Philo. And some of the firms started by former Amgen employees have either left the area or shut down altogether.

“There’s no question that other companies in the area want to grow, but the capital markets and interest rates have made it difficult,” said Philo.

But Alliance is unique, he said, because it’s not a start-up looking to grow and be acquired or go public. It’s a self-funded two-person shop that has no interest in seeking venture capital.

The company now serves close to 150 companies worldwide. “We’re unique because we have a niche,” said Philo. “We started off with two people and we kind of like it that way. We just wanted to do the things we like to do in the laboratory.”

The new CEO of Sherman Oaks Hospital and Encino Hospital, Jim Sherman, will set out to chart a new strategic direction for both facilities amid major changes that include the departure of the Grossman Burn Center and impending national healthcare reform.

“One of the things I need to do now is work with the medical staff and the staff, and we need to figure out what does Encino Hospital of the future look like? What is Sherman Oaks Hospital of the future going to be? We really need to figure out where we are going,” said Sherman, who took over September 14.

Both hospitals have had a significant presence in the community for close to 50 years and are now part of a 13 hospital system run by Prime healthcare Services.

For 40 years, Sherman Oaks Hospital has housed the Grossman Burn Center well known for treating high-profile burn victims, offering services that include acute care, reconstruction, rehabilitation and psychological help.

With the burn center’s expected relocation to West Hills Hospital early next year, come challenges and opportunities, said Sherman.

“The burn center has been such a vital part of this hospital for so many years and I’m very sorry to see it go. I’m disappointed just like everybody else, but it was a business decision for them and I respect it and we’re going to try to make it a very smooth transition,” he said.

“But at the same time, the burn center always overshadowed all the other great services that were at this hospital. We have a fantastic wound care program, a fantastic mental health program geared towards seniors, we have a cath lab – so this is an opportunity to really showcase those services for the community.”

As CEO of the two hospitals Sherman said he will work with doctors and the two hospitals’ 1,100 employees, as well as reach out to the community, in order to come up with a shared vision to build upon for the future.

“I think if I went out on the street and asked people: ‘What do you know about Sherman Oaks Hospital?’ They’d say, ‘Oh that’s the hospital with the Burn Center.’ And about Encino, they’d say: ‘That’s the hospital on Ventura Blvd.’, but they couldn’t specifically tell me about the services that we offer at both and that’s what my goal is going to be, to take some of the great services we have and expand upon those and then add some new services as well.”

Sherman will oversee significant capital investments at both facilities including the purchase of new equipment and technology. Both facilities had been undercapitalized by their previous owners, he said, and resources from Prime Healthcare, which acquired Sherman Oaks Hospital in June of 2006 and added Encino Hospital in June of 2008, have allowed for significant improvements.

A new Patient Care Information System was recently installed, and stock pharmaceuticals are now available to nursing units on local floors in an effort to improve efficiency, he said.

Sherman Oaks Hospital recently opened a Cardiac Catheterization Laboratory and re-opened its inpatient mental health program for seniors.

“One of the things that I’m very proud of coming on board is that the average time that it takes from when you walk into the emergency room to the point when you’re seen by a physician is on average 15 minutes or less. And I know that at most hospitals, and especially in California, it’s two hours or more. So I really want to get that word out and that’s something we plan to capitalize on.”

Sherman also said he’s proud to join Prime Healthcare Services as they were recently ranked by Thomson Reuters as one of the top 10 U.S. health systems and were the only for-profit health system to receive this recognition on the West Coast.

In the past, Prime Healthcare Services has been criticized for its efforts to cut costs and boost profits.

Most recently, Dr. A. Richard Grossman, founder of the Grossman Burn Center, told the LA Times the move to West Hills Hospital was prompted by frustration over reduced resources at Sherman Oaks.

Ready for the future

In the current financial climate, with decreasing reimbursements and looming healthcare reform, Sherman understands the challenges are many.

“It’s a difficult time for hospitals. We don’t know what healthcare reform is going to bring, and we’re also worrying about where funding is going to come from for the earthquake retrofitting that needs to take place. There are also challenges with reimbursements as technology advances,” he said.

Sherman, who spent the last 11 years working with HCA, first as President and CEO of West Hills Hospital and most recently as President and CEO of Los Robles Hospital in Thousand Oaks, said he’s happy to be back in a small hospital environment.

“What I really love about small hospitals is that it’s a family, it’s a team, there’s camaraderie, and that’s very similar to what I experienced when I was at West Hills Hospital and it’s something I just love,” he said. “I’m happy to be back in the community where I was raised, that I know and I love.”

With a wide smile and visible enthusiasm Sherman has been greeting doctors and hospital staff during his first weeks on the job undaunted by what he described as the ‘wait and see’ attitude that some staff have adopted when it comes to new leadership.

“I think there’s caution because both facilities have seen a significant number of CEOs, they’ve seen them come and go, and so I think there’s a little speculation and thinking ‘yeah he’s a nice guy but will he be here in six months.’ And they’re very open to sharing that with me,” he said.

Muhammad Anwar M.D., Medical Director for Sherman Oaks and Encino Hospitals said so far he liked what he saw.

“It’s only been his first week but so far everybody has taken him well. He brings a lot of Energy to the table, that I can see right away,” he said. “He understands the market forces and the importance of physicians’ contributions to the financial success of a hospital, which is really important. He’s also very personable, humble; his overall approach is very inclusive. I’m confident he will do very well, especially because of his background in finance.”

Jim holds a Masters degree in Healthcare Administration from California State University, Northridge.

Sherman, who replaces former CEO John Rossfeld, said he can’t control how long he’ll be in the position, “but I intend on being here for the long run,” he said.

Anthem Blue Cross of California has been ordered to reimburse a Los Angeles man the $206,000 he spent on a liver transplant despite having been insured by the company at the time he was diagnosed as a transplant patient-candidate.

Ephram Nehme sued his health insurer to pay for an out-of-state liver transplant, saying he would have died while waiting to have his surgery at a Blue Cross-approved hospital in California.

A Los Angeles jury concluded March 15 that Woodland Hills-based Anthem Blue Cross should cover the cost of the transplant as well as Nehme’s court costs and legal fees.

Although the insurer had approved Nehme’s liver transplant, the long waiting list at UCLA Medical Center prompted the 62-year-old business owner to seek a transplant—paying for the procedure out of his own pocket—in Indiana.

His doctor is said to have recommended he do so, fearing Nehme would not live long enough for his name to reach the top of the waiting list in Los Angeles.

Anthem’s parent company Wellpoint refused to pay when it was told he would go to Indiana.

The case Nehme recently won comes on the heels of multiple appeals, which he lost.

The cost of legal fees is expected to far exceed the cost Anthem will also have to pay to reimburse Nehme for his new liver.