The growing role of IPdiligence in corporateformation, funding, IPOs

BByy NNEEDD IISSRRAAEELLSSEENNKnobbe, Martens, Olson & Bear LLP

After a successful IPO in 2007, SanDiego-based OOrreexxiiggeennPPhhaarrmmaacceeuuttiiccaallss (Nasdaq: OREX)raised an additional $76 million inearly 2008. Orexigen has two weight-loss drugs in advanced clinical trials.

In January, the Tech Coast Angelsled a Series A investment round inTTrraavveerrssaa TThheerraappeeuuttiiccss, a new SanDiego company, which raised $2 mil-lon. Traversa’s technology promisesto revolutionize the way that newRNA drugs are delivered into apatient’s cells.

Newly founded CCaarrddiiooCCrreeaattee IInncc..completed a licensing transactionwith a local university this week.CardioCreate uses stem cells torepair and replace damaged hearttissue after a heart attack.

These and dozens of other recentSan Diego transactions all have atleast one thing in common:Intellectual property diligence wascritical in closing the deal.

Intellectual property owned by orlicensed to a high-tech business can bea significant asset, and the IP of abiotech or pharmaceutical venturecould well be the company’s mostimportant asset. A recent study ofstartup companies by RosemarieZiedonis at the University of Michigan

Business School showed that thosewith aggressive patent filing strategieswere much more likely to survive andobtain venture financing.

For example, while only one thirdof biomedical device startups hadfiled patents, 90 percent of thosethat survived and got financed haddone so. In recent years, intellectualproperty has assumed an increasing-ly prominent role in company forma-tion, licensing, angel financing, ven-ture financing and in IPOs. As aresult, intellectual property due dili-gence is a gating event in an increas-ing number of deals.

A first step in intellectual propertydiligence is to evaluate the compa-ny’s own IP; that is, how well it pro-tects the company’s proprietary posi-tion and provides barriers to entryfor competitors. This is an importantvalue question for high-tech invest-ments. For pharmaceuticals, lack ofpatent protection is usually fatal tothe venture, given the high cost ofobtaining FDA approval for a newdrug (estimated at $800 million),and the low cost of launching ageneric copy (a few million dollars).Without effective patent protection,or some other form of market exclu-sivity, an otherwise promising drugwill not attract investment capitaland will likely never be marketed.

Thursday, March 27, 2008 / Vol. 123, No. 63sddt.com/techbiotech08

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Stem cells: Global research policies and patent laws

Another common part of IP dili-gence is a review of third-partypatents to spot potential infringe-ment issues. Although few invest-ments are completely free from risk(including the risk of patentinfringement), a significant infringe-ment issue may well deter furtherinvestment until it is resolved. In aclassic lemons-to-lemonade sce-nario, entrepreneurs can sometimeslicense or buy patents found in a dili-gence review, simultaneously elimi-nating the infringement issue andbuilding the company’s IP portfolio.

Ownership of intellectual propertyis often a component of IP diligence.Common issues include whetherpatents have been assigned to the

company by the inventors, whetherlicenses have been properly draftedand whether license terms are favor-able. One sometimes hidden issue iswhether any third party has a claimto the invention. Inventions made byacademics could be owned by theacademic institution. Government-funded research often has IP stringsattached. Inventions conceived whileworking for a former employer maybe problematic.

From the perspective of theinvestor, IP diligence is an exercise incompromise. The project is typicallyperformed on a limited budget, oftenunder severe time con straints. This

BByy LLIISSAA AA.. HHAAIILLEEDLA Piper

While harmonization of stemcell research policies and patentlaws worldwide is desirable, giventhe cultural and religious differ-ences among the countries, it maynot be possible. This is increas-ingly evident in the field of stemcells, where there is no interna-tional consensus with respect tothe morality of working withhuman embryonic stem cells(hESCs) and where the corre-sponding policies for patentingvary among the national patentoffices worldwide.

Many believe that patentsshould be available for isolatedhuman embryonic stem cells andmethods of production or use ofhESCs, as long as they meet thegeneral patent criteria in a partic-ular country (e.g., novelty, utility,non-obviousness, industrial appli-cability, inventive step and/or suf-ficiency of disclosure), whileexclusions to patentability due tothe principles of “public order” ormorality should be limited if pos-sible. Today, technical solutions tothese moral dilemmas are beingreported often, including recentlydescribed techniques such asparthenogenetically derived blas-tocysts or reprogramming of adultcells to generate embryonic stemcells.

In Europe, ethical regulations

bar the patenting of the humanembryo or uses of human embryosfor industrial or commercial pur-poses. This regulation originatesfrom a law that prohibits patent-ing inventions contrary to morali-ty or “ordre public.” Similar toEurope, many other countrieshave a “morality” clause thataffects patentability of certainbiotechnological inventions. Inmany countries, this prohibitionor effect on patentability includeshuman embryonic stem cells, theprocess of extracting humanembryonic stem cells from ahuman blastocyst, and patentscovering human embryonic stemcell lines. For example, the UnitedStates looks at “public policy”;China, “public interest”; Japan,“morality”; Singapore, “offensive,immoral or anti-social behavior”;and Australia, technologies thatare “against the law.” In someEuropean countries, such asGermany, hESCs may not beextracted from embryos andresearch on imported pluripotenthESCs is permitted only if the cellsoriginate from culture lines estab-lished before Jan. 1, 2002. Europegenerally prevents any financialgain from use of cells or tissues ofthe human body, however, someargue that embryonic stem celllines are not “body parts” sincethey are “artifacts” of a culture sys-tem.

In Asia, including China, India,Japan, Singapore and SouthKorea, where there are positiveviews on stem cell research, pri-vate and public entities are devel-oping hES cell lines. Interestingly,while India and China appear tobe moving forward quickly withsuccesses in stem cell research,these countries have much lessexperience in terms of a well-developed patent system.

In the Asian culture, the humanembryo is highly respected; how-ever, it is the financial exploitationof human embryos that is rejected.In other words, the “sin” in the useof human embryos for research isin patent protection and subse-quent financial exploitation as aresult of patents.

A look at the global collection ofstem cell patent families consistedof 47,467 documents in November2007. The greatest percentage ofpatents and patent applicationswere filed in the United StatesPatent & Trademark office(USPTO); the PCT (PatentCooperation Treaty application) orthe European Patent Office(EPO), followed by Australia,Canada and Japan. More than 50percent of inventors on stem cellpatents and applications are fromthe United States and more than57 percent of assignees or owners

See Stem cells on 2

➤ Allan Camaisa is a seasoned

businessman and

founder and CEO of

Anakam Inc., a

provider of online

security solutions.

Page 5

➤ Vet-Stem CEO Robert

Harman’s company

specializes in

regenerative stem-

cell therapy for

horses, dogs and

cats that suffer from

arthritis and tendon, ligament

and joint injuries.

Page 3

➤ James Lasswell founded

Indus Technology in

1991 to provide

services such as

systems engineer-

ing, technical and

program manage-

ment to government and industry

clients.

Page 8

➤ Magda Marquet, co-founder

of Althea

Technologies Inc.

and board member

of Athena, runs a

company where

women represent

more than 65 percent of the

staff.

Page 6

➤ Ellie Ramos started Technical

Logistics Corp.

more than eight

years ago out of her

home, and now has

33 employees in the

company’s National

City office.

Page 12

➤ Attorney Raymond

Wagenknecht want-

ed the title of his

practice, Biotech

Beach Law Group

PC, to convey a

more laid back, non-

threatening environment for

clients to discuss their intellectu-

al property.

Page 2

Roundtable

San Diego biotech real estate market on upswingColliers International

Last year’s surge toward biotech-nology was made unmistakablyclear by big pharma’s emerginginterest in biotech established byabundant M&A activity, coupledwith record-high placement of ven-ture capital funds into life sciences.

San Diego life sciences firmssecured $1.3 billion in venture capi-tal in 2007, generating a 51 percentincrease over 2006 investments andaccounting for 64 percent of fundsinvested across all sectors (Source:San Diego Metropolitan, Jan. 21,“Venture Bucks”). Big pharma,beginning to look to biotechnologyto secure its future success, was veryactive in acquiring life sciencescompanies. Major acquisitions in2007 included San Diego-based

See IP diligence on 12

NNoovvaaCCaarrddiiaa for $325 million.The good news for the San Diego

region: This M&A activity and ven-ture capital trend is expected to con-tinue through 2008, according to arecent report published by auditingfirm KKPPMMGG. The report, which sur-veyed 350 venture capitalists, entre-preneurs, corporate buyers, invest-ment bankers and research analystson trends in venture capital over theupcoming two years, found that 85percent of respondents indicatedtheir expectation of venture capitalactivity to continue growing orremain at current levels. Fifteenpercent of respondents forecast thelife sciences sector to receive themost capital over the two-year peri-od, placing it second behind thegreentech/cleantech sector.

Absorption levels for biotechnol-ogy real estate in San Diego havefelt the positive affect of this grow-ing relationship between big phar-ma, venture capital and biotech-nology.

Year-end 2007 direct vacancyrates for wet lab space migrateddownward to 5.05 percent inSorrento Valley; Sorrento Mesavacancy decreased to 4.30 percent;and UTC led the county with a 4.18percent vacancy rate. This down-ward trend in vacancy has contin-ued throughout the first twomonths of 2008, with sustainedleasing activity among 5,000- to20,000-square-foot tenants fore-casted to continue throughout theyear.

With the exception of a few com-panies, San Diego’s life sciencescompanies are clustered within thesubmarkets of Torrey Pines, UTC,Sorrento Valley and Sorrento Mesa.The lab market in San Diego standsat approximately 8 million squarefeet of specialized lab space andanother 4.7 million of owner-occu-pied lab space.

“Tenant demand for this producttype in the UTC market has beenhistorically strong and should con-tinue, given the surge in biotechnol-ogy venture funding,” said TomMercer of CCoolllliieerrss IInntteerrnnaattiioonnaall..

Mercer, along with Chad Urie andMichael O. Reidy of ColliersInternational, are representingNNeexxuuss PPrrooppeerrttiieess IInncc.., a leader inthe development of biotechresearch facilities with more than 1million square feet in San DiegoCounty.

Nexus is currently developing a$54 million life sciences campus atLa Jolla Village Drive andInterstate-805 in UTC. The two-building, 161,871-square-foot proj-ect is under way with occupancy ofthe first building, consisting of58,904 square feet, anticipated byfirst-quarter 2009.

Nexus has constructed multi-tenant and build-to-suit laboratoryfacilities to serve the needs ofnumerous life science companiessuch as LLiiggaanndd PPhhaarrmmaacceeuuttiiccaallss(Nasdaq: LGND), JJoohhnnssoonn &&JJoohhnnssoonn (NSYE: JNJ), AAmmggeenn(Nasdaq: AMGN) and NNeeuurrooccrriinneeBBiioosscciieenncceess (Nasdaq: NBIX), aswell as incubator facilities for small-er biotech companies.

According to Colliers, demand bysmall-tier biotech companies —users of 3,000 to 20,000 squarefeet — should continue well into2009. As these startups continue togrow, they will demand significant-ly more space.

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Supplement to:

Who’s Who inTech & Biotech

Profiles Inside

2 THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

Close-up: Raymond Wagenknecht

Work’s a ‘beach’ for local patent law firmBByy DDOOUUGG SSHHEERRWWIINN

The Daily Transcript

When RaymondWagenknecht opened hisown law practice severalyears ago, he decided againstnaming it after himself.

While proud of his family’sheritage, he found it to be,well, not so catchy, and morethan a little difficult to say(for the record, it’s pro-nounced WAG-ah-nect).

The name he finally settledon — BBiiootteecchh BBeeaacchh LLaawwGGrroouupp PPCC — pays tribute tothe moniker San Diego isknown as throughout the sci-entific community, althoughit, too, can be a bit confusing.

“A lot of nonscientistsdon’t (get the reference), sothey think I practice beachlaw,” Wagenknecht said witha laugh. “I’ve gotten pingedfor environmental law,which I don’t do. ‘Is this theSurfrider Foundation’ ... thatsort of thing.”

He also wanted the title ofhis practice to convey a lessstuffy, nonthreatening envi-ronment for potential clientsto discuss their intellectualproperty.

“I try to give (the practice)a feeling of welcome-ness,”Wagenknecht said. “Whenpeople walk into law offices,they can have their guard up.I just want to represent thelighter side, in a sense.”

His surname has beenbeneficial in one aspect,though.

“It’s helped with Europeanbusiness,” he said. “A majori-ty of my European clientsare German.”

Wagenknecht practicespatent and trademark lawfor life sciences companies— mostly startups and smallbiotech firms — and non-profit research groups. Themajority of his work involvespatent prosecution. He alsoconducts due diligence, eval-uating the technology ofcompetitors to make sure hisclients don’t have any

UCSD scientists design sensorthat can detect some bombs

BByy EELLIIZZAABBEETTHH MMAALLLLOOYYThe Daily Transcript

A team of chemists andphysicists at the University ofCalifornia, San Diego hasdeveloped a tiny, inexpensivesensor chip capable of detect-ing trace amounts of hydro-gen peroxide, a chemicalused in the most commonform of homemade explo-sives.

In addition to detectingexplosives, UCSD scientistssay the sensor could havewidespread applications inimproving the health of indus-trial workers by providing anew tool to inexpensivelymonitor the toxic hydrogenperoxide vapors frombleached pulp and other prod-ucts to which factory workersare exposed.

“The detection capabilityof this tiny electronic sensoris comparable to currentinstruments, which are large,bulky and cost thousands ofdollars each,” WilliamTrogler, a professor of chem-istry and biochemistry atUCSD and one of its inven-tors, said in a written state-ment. “If this device weremass produced, it’s notinconceivable that it could be

made for less than a dollar.”The device was invented by

a team led by Trogler;Andrew Kummel, a professorof chemistry and biochem-istry; and Ivan Schuller, aprofessor of physics. Much ofthe work was done by UCSDchemistry and physics gradu-ate students Forest Bohrer,Corneliu Colesniuc andJeongwon Park.

The sensor, which is aboutthe size of a penny, works bymonitoring the variability ofelectrical conductivitythrough thin films of “metalphthalocyanines,” accordingto a statement released byUCSD. When exposed tomost oxidizing agents, suchas chlorine, these metal filmsshow an increase in electricalcurrent, while reducingagents have the oppositeeffect — a decrease of electri-cal current.

But when exposed tohydrogen peroxide, an oxi-dant, the metal phthalocya-nine films behave differentlydepending on the type ofmetal used. Films made ofcobalt phthalocyanine showdecreases in current, whilethose made from copper ornickel show increases in cur-

rent.The UCSD team used this

unusual trait to build its sen-sor. It is composed of thinfilms of both cobalt phthalo-cyanine and copper phthalo-cyanine to display a uniquesignature whenever tinyamounts of hydrogen perox-ide are present.

The paper was publishedin this week’s issue of the“Journal of the AmericanChemical Society.”

According to UCSD, thesensor is capable of sniffingout hydrogen peroxide vaporin the parts-per-billion rangefrom peroxide-based explo-sives, such as those used inthe 2005 bombing of theLondon transit system.

Trogler said that becausethe team’s sensor is so littleaffected by water vapor, itcan be used in industrial andother “real-life applications.”The university has appliedfor a patent on the invention,which has not yet beenlicensed.

The Air Force Office ofScientific Research providedfunding for the researchstudy.

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infringement issues.He isn’t involved in much

litigation work, typicallyonly assisting litigationgroups of other firms inhelping them understandthe underlying technology.

In addition to performingthe basic patent prosecutiontasks, Wagenknecht alsohelps guide his clients towhere they might get cover-age and advises them onpotential products.

“I think the science in SanDiego is really, really strong,”he said. “Sometimes it helpsto get another take on whatit is they’re doing and maybewhere you think they cantake it.”

As the sole full-time mem-ber of Biotech Beach Law,Wagenknecht tries to keepexpenses down for hisclients, many of whom arefledgling companies withlimited budgets. His effortsbecome even more impor-tant as the costs associatedwith intellectual property

continue to rise and the U.S.Patent & Trademark Officetighten restrictions onpatent applications.

“I’m really trying to pushthe value side,” Wagenknechtsaid. “I really work on theirprotection, so they can nothave ( just) one patent appli-cation. If I can cut the costdown, maybe they can gettwo or three patent applica-tions. Hopefully (they’ll) getmore value, so they can getmore protection with whatfunding they do have.”

He owns a fairly modest,two-room office toward thecenter of downtown,eschewing Del Mar/CarmelValley — the trendy andpricey home to many of theregion’s intellectual propertygroups.

And Wagenknecht onlyhires consultants on a case-by-case basis, like when heneeds a specialist in chem-istry or biology.

He considers himself aproduct of the biotech com-

another group’s patent port-folio. Wagenknecht workedwith the science group andthe company’s attorneys tofigure out the scope of thepatent in question.

The experience began hislove affair with the legal sideof patents, and soon there-after he enrolled at theUniversity of San DiegoSchool of Law.

After earning his lawdegree, he worked as a scien-tific advisory for a smallintellectual property groupand assisted a few patentattorneys. The work mor-phed into his own practice.

“I feel like I’m a part of thebiotech community,”Wagenknecht said. “There’sa sense of home with SanDiego biotech. I want to pro-mote them as much as possi-ble. We have a lot of really,really smart people here. Ithink there are some goodcompanies, so obviously youwant to help them.”

San Diego’s large biotechpresence has drawn theattention of national firms,many of whom have recentlyopened offices here.

The trend doesn’t botherWagenknecht, who said hisbusiness continues to flourishand has even grown lately.

“The small biotechs, theydon’t have a lot of money, sothey’re really cost-con-scious,” he said. “I don’tthink (large firms) can com-pete on price. I just try toprovide a good value. Onceyou provide a good value at areasonable price, people will

come.”He said it helps his busi-

ness that he still has friendsand former colleagues atUCSD, the Scripps ResearchInstitute and several start-ups.

“I’m already in the circle ofthe biotechnology communi-ty,” he said. “It can be a diffi-cult community to get into ifyou’re not from San Diego.”

The entrepreneurs he’sdealt with are usuallyinvolved with more than oneventure, which helps growBiotech Beach Law’s clientlist.

“A lot of these guys, theyjump around from companyto company,” Wagenknechtsaid. “So once you do goodwork for one, you’re proba-bly going to get work withanother.”

He also is seeing anincrease in work forEuropean companies.

Besides the work he doesfor his firm, Wagenknechthas worked with the SanDiego Inventors Showcase,an event where high schooland elementary studentsdevelop their own inven-tions. He’s also worked withVentureForth, an entrepre-neurial student organizationat UCSD.

“You’re obviously trying toserve the San Diego technol-ogy groups,” Wagenknechtsaid, “but you’re also tryingto encourage innovation,even with the younger-agedfolks.”

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munity. The Cincinnatinative came to San Diego in1988 specifically to get adegree in microbiology fromthe University of California,San Diego, and has beenhere ever since.

He worked in the school’sresearch labs and, upongraduation, nabbed a job atseveral startups, includingNovaDx, a spinoff ofHybertech that is no longeroperating.

While at NovaDx, therewas a question of whether atechnology the company wasdeveloping was covered by

of these patents and applica-tions are from the UnitedStates.

Patents granted in theUnited States to theWisconsin Alumni ResearchFoundation (WARF) for workdone at the University ofWisconsin on embryonicstem cells have created con-cerns that access to even basicresearch tools for studyinghuman embryonic stem cellswill be more and more diffi-cult over time. Although morethan 400 research and 20commercial licenses havebeen made available byWARF for hESC productionand use, it is believed thatwith the increase in the num-ber of patent application fil-ings in the stem cell area,other patents may be requiredfor freedom to operate in thefield, thus imposing increas-ing transaction costs andstacking royalty obligationson those companies enteringinto this area of research anddevelopment. Regardless ofthe technology area, the needfor licenses to multiple

patents in any field slows theinvestment of capital into newventures, and the overalldevelopment and commer-cialization of new technolo-gies is likewise delayed.

The three WARF patents,claiming all primate andhuman embryonic stem celllines, were challenged in2006 and one was upheld inpart in February and two inMarch. While it was previ-ously believed that thesepatents were the biggest hur-dles to overcome with respectto freedom to operate in thestem cell field, certain claimsin the patents were narrowedto the point that they mayonly include certain tech-nologies known at the time ofthe filing of the originalpatent applications (e.g.,1998 and 2001).

For example, recent tech-nologies, including partheno-genesis or reprogramming ofadult cells, which allow forpreparation of hESCsthrough methods that do notrequire generation of a “pre-implantation” embryo, mayfall outside of the scope of the

re-examined WARF patentclaims for hESCs. While thismay be a positive result forthe advancement of the stemcell field, there are other tech-nology areas where overlap-ping patent claims fornuclear transfer methods,specific markers unique tostem cells or products of stemcells, or other complementarytechnologies for example,may be required for freedomto operate toward develop-ment of commercial andtherapeutic applications ofstem cells.

Regardless of ethical ormoral regulations that affectpatentability of hESCs in var-ious countries, new method-ologies in stem cell researchmay aid in avoiding variousrestrictions in patent lawsand may lead to increasedresearch in the United Statesand other countries.

Haile, J.D., Ph.D., is a part-ner and the co-chair of theGlobal Life Sciences practiceat the global law firm DLAPiper in San Diego.

SSoouurrccee CCooddee:: 2200008800332277ccrrcc

Stem cellsContinued from Page 1

3THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

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A U T O | H O M E | B U S I N E S S | E M P L O Y E E B E N E F I T S | L I F E | H E A L T H

Close-up: Robert Harman

Vet-Stem technology transforming world of regenerative medicinePets’ positive

responses may bodewell for humans

BByy BBRRIIEE IIAATTAARROOLLAASpecial to the Daily Transcript

In a nation where a growingnumber of people seem tocherish the welfare of theirhousehold pets just as muchas — if not more than — theirfellow human beings, VVeett--SStteemm CEO Robert “Bob”Harman sees endless poten-tial for his company.

Nearly six years ago, the 58-year-old veterinarian-by-training, statistician andbiotechnology entrepreneurteamed up with business part-ner Mike Dale to found Vet-Stem, a Poway-based firm thatspecializes in regenerativestem-cell therapy for horses,dogs and cats that suffer fromarthritis and tendon, ligamentand joint injuries.

At the time, Harman said,the biggest question waswhether his enterprise hadentered the veterinary prod-ucts market prematurely.

“Would people actually payfor regenerative stem-celltherapy for their pets?” heasked during a recent inter-view.

Pushing aside his uncer-tainty, the former consultantabandoned the idea of earlyretirement and turned to theequine world to find out, firsttesting Vet-StemRegenerative Cell (VSRC)therapy on horses as early asJanuary 2004 after securing aworldwide exclusive license toadipose-derived stem-celltechnology for veterinary usesin October 2003.

“We were totally taken bythe huge range of possibilitiesof what regenerative medicinecan do,” Harman said. “Therewere already lots of animalstudies before we came along,so we didn’t have to do tradi-tional animal studies. We justextracted the cells from fat ina horse and dog ... and then

observable — less pain andless effect on quality of life.”

Case in point: In 2005, pro-fessional polo player AdamSnow’s prized mare, Rio, toreher right-front superficial dig-ital flexor tendon. Rather thanrelying on traditional effortsto treat the injury, Snow uti-lized VSRC therapy and thenplaced his pony in an eight-month rehabilitation pro-gram. She bounced backstrongly enough to clinch the2006 U.S. Open and 2007 CVWhitney.

LLuuccrraattiivvee ffuuttuurreeRio is just one of 2,000

horses that have receivedtreatment since 2004, alongwith nearly 300 dogs.Although research focusesheavily on these two animals,cats also have undergonestem-cell treatments.

“Cats can hide their pain,”Harman said. “They just showit differently. The hidden dis-ease in cats is osteoarthritis,and a lot of owners don’t rec-ognize it. (The therapy) worksthe same in cats.”

From a business standpoint,however, Harman believesdogs will provide real growthfor Vet-Stem, as well as thecompany’s banking program,where more than 2,000 sam-ples from horses and dogs arefrozen in suspended anima-tion and stored in liquid nitro-gen so that pet owners canrefer to them for future use intheir animals. The cost forstorage after the first yearruns $150 per year.

Judging the interest veteri-narians and pet owners haveexpressed in VSRC therapy,Harman’s dream to infiltrateevery major animal marketwithin five years is entirelypossible.

“Business is growing; cus-tomers are accepting the tech-nology,” he said. “(Pet) ownersare excited. The reaction haspushed vets rapidly, and hun-dreds have picked up on thetechnology and the business.

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adapted the techniques to seeif it worked.”

MMoouunnttiinngg pprrooooffIn the three-day procedure,

a veterinarian surgicallyremoves about two table-spoons’ worth of fat from thepatient and ships it to the Vet-Stem laboratory, where thesample is processed. The ani-mal’s own regenerative cellsare isolated, stored in syringesand returned to the vet. Thecells are then injected into thewounded area.

Initial results showedpromise. And the latest tech-nology’s estimated price tag of$2,500 (it varies dependingon the animal’s particularcondition or disease) wascheaper than a joint surgeryor replacement, which costsbetween $3,500 and$10,000.

Along with a plethora ofcase studies that demon-

strated improvements froma single injection last any-where from “six months tomany years,” the AmericanJournal of VeterinaryResearch published datafrom Cornell University’sdouble-blinded, placebo-controlled study that alsoconfirmed animal subjectsbenefited both statisticallyand biologically from VSRCtherapy, Harman said.These findings contradictedstandard protocol that anti-inflammatory drugs or jointreplacements were the mosteffective ways to treat ani-mals hampered by soft-tis-sue tears, fractures andarthritis.

“I try to give an honestexpectation when people ask,”Harman said. “The worst sideeffect is that (the therapy)doesn’t work. However, two-thirds of the animals we treatget really better, and it’s quite

... It’s a real business.”Just how real? Gross rev-

enues are expected to hit $3.5million this year, and theyhave more than doubled eachyear since the company, whichemploys 30 workers (six ofwhom are veterinarians andtwo who hold doctorates),first began operating. InSeptember 2007, Vet-Stemalso opened its first lab out-side of San Diego in Dubai,United Arab Emirates.

“We’re pretty much in aclass of our own,” Harmansaid. “Our major competitionis what people used to do.Now we’re offering a newmode, and our biggest com-petitor is getting peopletrained to understand.”

Part of that trainingincludes a 3.5-hour, AmericanVeterinary MedicalAssociation-approved certifi-cation course designed forveterinarians who want tounderstand how to use regen-erative medicine. Once avail-able only in San Diego, Vet-Stem began offering the pro-gram online in January, andmore than 700 veterinarians

have signed up.“They get a whole module

on the science, clinical use,practicality on how to do itand how to integrate it intotheir clinic,” Harman said. “It’sa science course, not a mar-keting piece. We teach whatnot to use it for, too.”

HHuummaann aapppplliiccaabbiilliittyyAlthough animals are the

subject of interest for Vet-Stem, Harman has collaborat-ed with companies that focuson the human application,and he believes regenerativemedicine will fare better thancontroversial embryonicstem-cell testing for the two-legged race.

Doctors are already treatingpatients in Central America,Asia and Europe with similartechnology, he said, and “thebig push is with heart diseaseand neurological disease.”

“There’s such an advantage,”he added. “This is their owncells.”

Iatarola is a San Diego-based freelance writer.

SSoouurrccee CCooddee:: 2200008800332277ccrrdd

Stemagen steps forward in biotechnologyBByy RROOMMAANN JJIIMMEENNEEZZ

Stemagen

Just over two weeks into theNew Year, La Jolla-basedembryonic stem cell researchcompany SStteemmaaggeenn shockedthe world and became the hottopic of conversation amongthe scientific communityworldwide.

On Jan. 17, the companyannounced it had become thefirst in the world to create anddocument a cloned humanembryo using somatic cellnuclear transfer (SCNT), ortherapeutic cloning.

The achievement is a majorstep forward in creating per-son-specific stem cells thatcould be used for treatingALS, Parkinson’s and otherdegenerative diseases. Thecompany’s research is exhaus-tively detailed in a paper pub-lished in a January issue of thepeer-reviewed scientific jour-nal Stem Cells.

The company was featuredthat morning on NBC’s “TheToday Show” for more than 30minutes of coverage spreadacross three separate seg-ments, as well as the leadstory on all the evening net-work news broadcasts.

The following morning,major daily newspaper in sev-eral major cities world ran thestory as front-page news.

Since the coverage, thecompany has been inundatedwith inquiries from potentialcollaborators and investors.

Stemagen’s managementteam has been taking thetime to carefully considereach of the several opportuni-ties it has to date been pre-sented with; however, thecompany does not have anyspecific or immediate fund-ing needs.

“We are a privately fundedcompany and our needs arebeing met at this stage,” saidDr. Samuel Wood, StemagenCEO. “This allows us to makesure that if we do decide tocollaborate on a project withanother company or researchinstitution, it would only bebecause it’s a clear ‘win/win’for both parties.”

So far, Wood said, all of theinvitations for partnering arefocused on Stemgen’s coremission: creating person-spe-cific embryonic stem cell linesthat could be used for thera-peutic treatments.

“The achievement wemeticulously documented is amajor first step toward creat-ing treatments for people whoneed help right now,” he said.

“While we can’t offer themthat, we can offer hope, andwe can offer progress.”

The company’s data isstraightforward.

Five blastocysts were devel-oped from 25 donated matureoocytes.

Three were confirmed to beclones based on DNA finger-

See Stemagen on 6

4 THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

Telecommunication CompaniesListed by Number of Local Employees

Firm NameAddress

Phone, FaxE-mailURL

Number ofLocal

Employees

TotalNumber ofEmployees

Headquarters Business Description Services Offered Executive(s) & Title(s)Year

Establishedin San Diego

YearEstablished

1

Qualcomm Inc.5775 Morehouse DriveSan Diego CA 92121(858) 587-1121, (858) 458-9096www.qualcomm.com

6,000

12,800

San Diego, CAQualcomm Inc. is a leader in developing and deliveringinnovative digital wireless communications products andservices based on the company’s CDMA digital technology.

Designs, manufactures and marketsdigital wireless telecommunicationsproducts and services based on itsCDMA technology and other tech-nologies

Paul Jacobs, CEO; StevenAltman, President

1985 1985

2

AT&T Inc.101 W. BroadwaySan Diego CA 92102(800) 310-2355www.att.com

5,800

309,050

San Antonio,TX

The largest communications holding company in the U.S.and worldwide, by revenue. AT&T is recognized as theleading worldwide provider of IP-based communicationsservices to businesses and the leading worldwide providerof wireless, high-speed Internet access, local and long dis-tance voice and directory publishing and advertising serv-ices. AT&T is expanding video entertainment offerings toinclude such next-generation television services as AT&TU-verse TV.

Wireless, high-speed Internet, televi-sion, voice services

Randall L. Stephenson,Chairman/CEO; San DiegoExecutives: Mark Leslie, VP,External Affairs; Tammi Terrel,VP/General Manager, Mobility;Denise Cunningham,VP/General Manager, Wireline

1876 1908

3

Cox Communications5159 Federal Blvd.San Diego CA 92105(619) 263-9251, (619) 266-5540www.cox.com

2,300

22,000

Atlanta, GA

A full-service, facilities-based provider of communicationssolutions for commercial customers, providing high-speedInternet, voice and long distance services, as well as dataand video transport services for small to large-sized busi-nesses.

High-speed Internet, voice and longdistance services, as well as data andvideo transport services for small tolarge-sized businesses

Patrick Esser, President;William K. Geppert, VP/GM,San Diego

19661898

(parent company)

4

Kyocera America Inc.8611 Balboa Ave.San Diego CA 92123-1580(858) 576-2600, (858) 569-9412kaicorp@kyocera.com, www.kyocera-wireless.com

1,170

n/a

Kyoto, Japan,(in the U.S.,San Diego,

CA)

Manufacturer of microelectronic packages for thetelecommunications and microprocessing industry.

Telecommunications manufacturer

Noboru Nakamura, Chairman;Makoto Kawamura, President;Rodney Lanthorne, President,Kyocera International, SanDiego

19711959,

1969 in the U.S.

5

Time Warner Cable8949 Ware CourtSan Diego CA 92121(858) 695-8285, (858) 635-8717Sales@RoadRunnerBiz.com,www.timewarnercable.com/SanDiego

500

86,000

Stanford, CTCable, high-speed online and digital phone servicesprovider.

High-speed Internet service, Webhosting, T-1s, dedicated fiber solu-tions, managed security, vanity e-mail, digital telephone, digital cabletelevision service

Glenn Britt, President/CEO;Judy Walsh, President, SanDiego Division; Tad Yo, VP/GM

n/a 1964

6

Leap Wireless International Inc. (Cricket Wireless)10307 Pacific Center CourtSan Diego CA 92121(858) 882-6000, (858) 882-6010ir@leapwireless.com, www.leapwireless.com

370

1,507

San Diego, CADigital wireless service, including voice and data servicesunder the brand Cricket and Jump Mobile.

Wireless, mobile servicesS. Douglas Hutcheson,President/CEO/Director

1998 1998

7

Novatel Wireless9645 Scranton Road, Suite 205San Diego CA 92121(858) 888-9231, (858) 784-0626www.novatelwireless.com

250

250

San Diego, CANovatel Wireless is a provider of wireless broadbandaccess solutions for the worldwide mobile communica-tions.

3G wireless PC card modems,embedded modems, ruggedizedmodems and communication soft-ware to wireless network operators,distributors, original equipment man-ufacturers (OEMs), and vertical mar-kets worldwide

Peter V. Leparulo, Exec.Chairman; Brad Weinert,President

1996 1996

8

HM Electronics Inc.14110 Stowe DrivePoway CA 92064(858) 535-6000, (858) 452-7207info@hme.com, www.hme.com

249

249

Poway, CAA technology company focused on quick-service restaurantwireless communications, timing and surveillance technol-ogy.

Wireless intercom systems for broad-cast

Harrison Miyahira, Founder;Chuck Miyahira, CEO

1971 1971

9

Teldata Enterprise Networks9085 Aero DriveSan Diego CA 92123(858) 874-2151, (800) 658-2922www.teldata-usa.com

99

99

San Diego, CA Telecommunications, installation services companyDesign and engineering, cable opera-tions, telecommunications

Robb Hijar, Owner 1989 1989

10

Continuous Computing Corp.9450 Carroll Park DriveSan Diego CA 92121(858) 882-8800, (858) 777-3388janis@ccpu.com, www.ccpu.com

95

300

San Diego, CAProvides integrated systems and services that enable tele-com equipment manufacturers to rapidly deploy Next-Generation Networks (NGN).

Wireless infrastructure and integra-tion and wireless professional servic-es, FlexTCA Systems ATCA and cPCIplatforms Trillium Protocol SoftwareTrillium Professional Services

PJ Go, President; MikeDagenais, President/CEO; AmitAgarwai, Sr. VP, Engineering

1998 1998

11

RF Industries Ltd7610 Miramar RoadSan Diego CA 92126(858) 549-6340, (858)549-6345rfi@rfindustries.com, www.rfindustries.com

88

88

San Diego, CA

Designs, manufactures and sells communications equip-ment, including radio frequency coaxial connectors andcable assemblies used for PCS, radio, test instruments andcomputer networks.

Builds cable assemblies, designs, andmanufactures, wireless data products

Howard Hill,Founder/President/CEO; VictorPowers, CFO

1984 1984

12

Cbeyond Inc.6256 Greenwich Drive, Suite 400San Diego CA 92122(866) 382-9314, (858) 622-0315sandiego.sales@cbeyond.net,www.cbeyond.net

70

1,000

Atlanta, GA

A leading IP-based managed services provider that deliv-ers integrated packages of local and long distance voicealong with mobile and broadband Internet services tosmall businesses.

More than 20 productivity-enhancingapplication including Blackberry,voice mail, e-mail, Web hosting, fax-to-mail, data backup, file-sharing andVPN

James Geiger, Chairman/CEO;Bill Rockfort, GM, San Diego

2006 1999

13

My Office9855 Distribution Ave., Suite FSan Diego CA 92121(858) 549-6700, (858) 549-0306info@MyOfficeFacilitySolutions.com, www.4myoffice.com

66

66

San Diego, CA TelecommunicationsTransition management, installation,PBX/VoIP, storage and distribution

Shaun Alger, CEO/COO 1999 1999

14

American Communications Corp9725 Scranton RoadSan Diego CA 92121(858) 427-2400, (858) 427-2401sales@acccom.com, www.acccom.com

60

100

San Diego, CACommunications related needs from Internet servicescompany

Cabling, telephone systems, networkhardware and Internet services tobusiness customers

Steve Deu Pree, President 1991 1991

15

Time Warner Telecom (becoming tw telecom July 2008)9665 Granite Ridge Drive, Suite 500San Diego CA 92123(858) 805-6000, (858) 309-0121www.twtelecom.com

30

n/a

Littleton, CO

A leading national provider of managed network services forbusinesses, organizations and communication services compa-nies, specializing in telecommunications, Ethernet and trans-port data networking, Internet access, local and long distancevoice, VoIP and security.

Integrates data, dedicated Internetaccess, and local and long distancevoice services for long distance carri-ers, wireless communications compa-nies, incumbent local exchange carri-ers and enterprise organizations.

Larissa L. Herda,Chairman/President/CEO;John T. Blount, COO; LindseyBurroughs, VP/GM

1998 1993

16

Communications Plus1675 Morena Blvd., Suite 100San Diego CA 92110(619) 276-3000, (619) 276-3131info@communicationsplus.com, www.communicationsplus.com

21

21

San Diego, CAInstalls, services, maintains business telephone and voicemail systems for companies with 3 to 300 employees.

Comprehensive analysis of telecommu-nications requirements with a prescrip-tive diagnosis for low-cost, easy-to-usesolutions that enable companies andorganizations to provide a higher levelof service to their customers

Neal Schneider, President;Ruth Sandven, CFO

1983 1983

17

San Diego Wireless111 N. El Camino Real, Suite FEncinitas CA 92024(760) 944-3434, (760) 944-3798customerservice@sdwireless.com, www.sdwireless.com

20

n/a

Encinitas Wireless communications provider.Service provider for Internet, phones,pagers, long distance, equipmentmanufacturers

Kevin Mcallister,Owner/President; PaulWheatland, Owner

1986 1986

18

Packet Telecom Solutions Inc.9265 Activity Road, Suite 102San Diego CA 92126(858) 578-2400, (858) 578-2439nortelsales@packettelecom.com, www.packettelecom.com

8

8

San Diego, CAAn authorized reseller focusing exclusively on NortelNetworks designed and engineered voice, VoIP and wire-less LAN solutions.

AT&T Network Services, NortelNetworks VoIP telephone systemsand support, network hardware,wireless solutions and Internet serv-ices to government, SMB and largebusiness customers

Eric Gilmore, President/CEO 2002 2002

19

National Sales Center7665 Palmilla Drive, Suite 5418San Diego CA 92122(858) 657-0370nationalsalescenter@gmail.com, www.nationalsalescenter.com

2

2

San Diego, CA Telecommunications Sales support and trainingNick Moreno,Founder/President

2004 2004

Data Source: The Companies. Listed by Number of Local Employees. This is a partial list; a more complete listing can be found at sourcebook.sddt.com. N/A: Not Applicable, n/a: not available, wnd: would not disclose. It is not the intent of this list toendorse its participants, nor to imply that a company’s size or numerical rank indicates its quality or service. We reserve the right to edit listings or to exclude a listing due to insufficient information. The following companies did not respond to oursurvey: ViaSat Inc., Remec Inc. Last updated 3/2008.

5THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

Close-up: Allan Camaisa

Entrepreneur’s latest effort provides online security solutionsBByy SSYYDDNNIIEE MMOOOORREE

Special to the Daily Transcript

Hackers are exploiting theInternet in unprecedentednumbers. In fact, accordingto Consumer Sentinel, acomplaint database main-tained by the Federal TradeCommission, identity theft isthe fastest growing crime inthe country, with reports ofstolen identity comprising32 percent of the more than800,000 fraud complaintsfiled last year.

The bottom line? With awhopping 250,000 casesreported in 2007, all con-sumers are vulnerable toidentity theft — especially ifthey use the Internet.

Enter Allan Camaisa, aseasoned businessman, andfounder and chief executiveofficer of AAnnaakkaamm IInncc.., arapidly growing provider ofonline security solutions.

According to Camaisa,safeguarding your personaldata is “just as critical aslocking your front door.”

The founder of HighTechnology Solutions Inc.(HTS), a hugely successfulenterprise that providedcommunications systems,engineering and outsourcingto the federal government,Camaisa is well equipped toachieve his goal of establish-ing Anakam as a formidabledomestic force, with an eyeon the global market. Underhis tenure, HTS grew to over400 employees strong,boasted annual revenuesexceeding $45 million, andaccrued a slew of honors,including listings on Inc.Magazine’s Top 500 privatecompanies and theGovernor’s Small Business ofthe Year Award. He went on

Photo: J. Kat WoronowiczAAllllaann CCaammaaiissaa,, ffoouunnddeerr aanndd CCEEOO ooff AAnnaakkaamm,, ssaayyss pprrootteeccttiinngg yyoouurr ppeerrssoonnaall ddaattaa iiss ““jjuusstt aass ccrriittii--ccaall aass lloocckkiinngg yyoouurr ffrroonntt ddoooorr..””

to raise $17 million inVenture Capital in 1999 tolaunch an Internet sub-sidiary (Eye Velocity)focused on Internet visuali-zation.

Yet, after selling HTS in2004 to WWiirreelleessss FFaacciilliittiieessfor nearly $49 million,Camaisa claimed he was“ready to retire.”

In reality, retirement isanathema to this visionarySouthern California native,who was born in Long Beachbut grew up in Bonita.

After realizing that toomany people were mired in“security” passwords —which aside from beinginconvenient, are easy forhackers to eventually deci-pher — he honed in on a dis-

2007 to 2008 with a 300percent growth rate.”

Camaisa attributes the com-pany’s resounding success tohis product’s simplicity, versa-tility and affordability.

“We are an over-devicedsociety, but Anakam’s tech-nology leverages the currentdevices that are out there,allowing consumers to log inanywhere and attain secureInternet access,” he explained.

Users enter a cell or homephone number or private e-mail address, and send itthrough a different vector soit cannot be hijacked. Thisway, he said, “We’ve addedanother level of security tothe mix — a roadblock to theintruder so passwords can-not be compromised.

Camaisa said his productis unique: “We are the onlycompany to offer such a com-prehensive security solution.No one else has such a com-plete identity managementplatform information.”

With an impressive trackrecord and impeccable cre-dentials, Camaisa is qualified

to combat online fraud —and to take on the challengeof building another Inc. 500-caliber company. He gradu-ated from the United StatesNaval Academy, earning abachelor’s in engineering,and received further trainingat Harvard Business School’sexecutive program. Asfounder of HTS, he wasawarded the Ernst & YoungRegional Entrepreneur ofthe Year and the SBA SmallBusiness Person of the Yearawards.

Ideally, this astute entre-preneur will make an impor-tant difference in the ongo-ing battle against onlinefraud. Internet theft, he says,is “subtle and ingenious,”and ultimately can causeirreversible harm.

“We (at Anakam) are basi-cally providing authentica-tion for the masses, allowingmore people, easier access tobetter security.”

Moore is a San Diego-basedfreelance writer.

SSoouurrccee CCooddee:: 2200008800332277ccrrgg

Genetics may bringnew life to failed drugs

BByy SSHHIIRRLLEEYY SS.. WWAANNGGThe Wall Street Journal

As pharmaceutical makersfind it increasingly difficultto bring new drugs to mar-ket, they are turning togenetic tools to seek uses formedicines that failed tomake it out of the develop-ment pipeline.

The discovery of new linksbetween genes and diseasescan help not only to designnew treatments, but to sal-vage drugs that are shelvedwhen they come up short inclinical trials.

The idea is “to take someof these compounds, capital-ize on past investments sit-ting idle, and now selectivelyaccelerate them in the devel-opment process,” says TerryHisey, a pharmaceutical-industry strategist at theconsultancy DDeellooiittttee LLLLPP.

The ultimate goal is todevelop medicines tailoredto patients with a particulargenetic makeup or who havediseases with a particulargene variation that are moreresponsive to a specific treat-ment. While few have beenfully realized so far, there area small but growing number,such as cancer drug Gleevecfrom NNoovvaarrttiiss AAGG (NYSE:NVS) and NNiittrrooMMeedd’s(Nasdaq: NTMD) BiDil, aheart-disease medicine.

“There’s a big buzz aboutit,” says Edward Abrahams,executive director of thePersonalized MedicineCoalition, a nonprofit educa-tion and advocacy groupcomprising industry, acade-mia and government organi-zations.

While the markets forthese therapies are smallerthan for those that treat thegeneral population, pharma-ceutical companies are real-izing there are hefty profitsto be made because patientsare more likely to use, andstick with, a tailored medi-cine that works better than aone-size-fits-all drug. Forinstance, biotechnologygiant GGeenneenntteecchh IInncc..’s(NYSE: DNA) Herceptin,which is taken by womenwith breast cancer who havea particular variant of theHER-2 gene, reaped $1.3billion in sales last year.

The broader shift towardso-called personalized medi-cine dovetails with pharma-ceutical makers’ recognitionof how hard it is to maintaina business model that relieson producing a few drugsthat bring in billions of dol-lars a year.

“The old sort of pharma-ceutical model is under pres-sure right now,” says WayneRosenkrans, chairman andpresident of the PersonalizedMedicine Coalition.“Personalized health care isone of those potential solu-tions.”

Drug development typical-ly can take 10 years or more.Failures cost companiesboth time and money, from$15 million per compound atthe first stage of human test-ing to $86 million in late-stage trials, according to a2003 study on the cost ofdrug innovation publishedin the Journal of HealthEconomics. Historically,these cost have increasedover time above the rate ofinflation, but there aren’tmore recent data availablefor pharmaceuticals, saysJoseph DiMasi, a studyauthor who is director ofeconomic analysis at theTufts Center for the Study ofDrug Development.

Many drug makers saythey routinely evaluate whya formulation didn’t work,and genetic informationoffers another way ofsleuthing.

“Does genomic informa-tion help us understand thecause of failure and give usany information aboutwhether we can resurrect theproject?” says Liam Ratcliffe,head of clinical quantitativeand innovative medicine atPPffiizzeerr IInncc.. (NYSE: PFE).“We do this routinely.”Ratcliffe says this approachhasn’t yet helped salvage anyPfizer products, though, anassessment echoed by someother big pharmaceuticalcompanies.

Some industry experts sayit is too time-consuming forbig pharmaceutical makersto try to salvage drugs; theysay it might be more promis-

tinct market niche.Utilizing his keen business

acumen, he laid the ground-work for Anakam, a providerof end-to-end security forcompanies and governmentagencies that need to pro-vide secure access to Websites and internal applica-tions. He recruited a top-notch management teamwith expertise in four keyvertical markets: healthcare, government,banking/finance and e-com-merce.

With 35 employees inoffices in San Diego andArlington, Va., Camaisa’s lat-est endeavor is aimed at pro-viding cost-effective authen-tication and identity protec-tion solutions, with thepotential to service millions.

His company now marketsa comprehensive combina-tion of patent-pending tools— including two-factorauthentification through theuse of existing devices suchas cell phones, remote ID

proofing, data protectionand system administration— to a variety of governmentagencies and businesses,among them hospitals, Webportals with online records,citizen immigration servicesand public health agencies.

Camaisa said the healthcare industry, in particular,is a ripe target for hackers.

“Lack of access to medicalrecords can lead to misdiag-nosis,” he said, but often doc-tors who would love to lookup medical records can’t,due to security restrictions.“By allowing access to med-ical records online, we’re try-ing to put more power in thehands of patients. The moreaccess a patient has to med-ical records, the moreimportant information theycan provide to their physi-cian.”

Not surprisingly,Anakam’s business is boom-ing. In fact, Camaisa said,“We’re expanding at a rapidclip, and are going from

See Genetics on 11

6 THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

Close-up: Magda Marquet

Althea Technologies targets aggressive growthBByy MMIICCHHAAEELL CCHHUUNNGG KKLLAAMM

Special to the Daily Transcript

When Magda Marquet andher husband Francois Ferreleft high-paying biotech jobsin 1998 to co-create their owncompany, AAlltthheeaaTTeecchhnnoollooggiieess IInncc.., theirfriends called them crazy.

But the couple held fast totheir dream of building a cut-ting-edge business that wouldstep up drug development byoffering dependable, qualityservices to the biotech andpharmaceutical industry; acompany whose employees’hard work would pay off inknowledge and advancement;a company where the workitself would benefit the lives ofothers.

“We looked back in 1997, aspeople coming from overseas,and felt that the promise ofAmerica was a bit bigger thanthe one that we were living,”Ferre said.

With their combinedexpertise — Marquet had

patented several new methodsto produce clinical-gradeDNA as executive director ofpharmaceutical developmentat VViiccaall IInncc.. (Nasdaq: VICL),and Ferre had made a namefor himself in cancer researchand HIV clinical developmentat CCyyttoommeettrriiccss and TheImmune Response Corp. —the couple got off to a goodstart. They raised $2 millionin the first quarter of 1998.

“We were quite surprised toget such a good response,”Ferre said. “We were two sci-entists with a big dream. Weput the money in the bankand said, ‘Now what?’”

However, 1999 was a toughyear of trial and error, and thecompany almost crashed. But in2000, Ferre and Marquetfocused on manufacturing serv-ices, specifically making DNAfor gene therapy. The biotechand pharmaceutical industryrecognized the magnitude ofAlthea Technologies’ productsin the fight against disease.

“We started the company in‘98 and became profitable twoyears after looking at geneexpression — or having a pro-tein made from a gene,”Marquet said. “We applied thetechnology to help developsafer therapeutics.”

The company has notstopped growing since.

“There was no turningback,” Ferre said. AltheaTechnologies has expanded itsservice portfolio by doublingits manufacturing capacityand becoming a leadingprovider of gene expressionanalysis, custom assay devel-opment services, protein andplasmid DNA productionservices, and aseptic vial andsyringe filling of Phase I, IIand III clinical products.

Althea Technologies sur-faced as a leader and serviceprovider in the development,testing and manufacture oftherapeutic products and vac-cines.

The genomics revolution

helped scientists to under-stand that each individualpatient has many differentgene variations, Ferreexplained.

“It is a fallacy that one drugwill benefit all,” he said. “Adrug that could be just theright one for one guy could betoxic for another.”

Essentially, advanced diag-nostics and more personalizedmedicine mean more targetedtherapeutics and specifictreatments for individualpatients. Individualized treat-ment can reduce side effects,reduce waste and speed up thehealing process.

Althea recently spun outAAlltthheeaa DDiiaaggnnoossttiiccss IInncc.., anindependent company thatwill provide genetic testingservices and products with theambitious goal of curing can-cer by “reducing the time, riskand cost of cancer drug devel-opment and bringing cancerdiagnostics into widespreadclinical use,” according to acompany press release.

The board appointed indus-try veteran David Macdonaldas CEO. Althea Diagnostics,by leveraging previous tech-nology from AltheaTechnologies, finds itselfuniquely positioned “to estab-lish a leadership role in cancerdiagnostics,” said Macdonaldin a recent interview. Clinical

use will include treatment forleukemia, prostate cancer andchildhood tumors, he said.

Macdonald had been con-sulting with Marquet for ninemonths prior to accepting hisappointment.

“It’s exciting to watch thecompany grow,” he said. “BothMagda and Francois are fan-tastic entrepreneurs.”

The culture at Althea ishardworking, challenging andfast-paced, Macdonald said,but the staff enjoys workingthere.

Melissa Rosness, director ofthe supply team for AltheaTechnologies, agreed.

“Althea gave me greatgrowth opportunities to learnthings so quickly from qualitycontrol to manufacturing andoperations,” she said. “It was agreat opportunity right out ofschool.”

The company was honoredlast year as a Top WorkplaceFinalist by the Wall StreetJournal and received 2006and 2007 “Best Place toWork” awards from the SanDiego Business Journal,Employers Group and SanDiego Magazine.

“It’s the people that reallymake the company,” saidRosness, who began at Altheaas a resident assistant andnow has both the purchasingand manufacturing depart-

ments under her. “Magda andFrancois foster the companyculture. They encourageemployees to work hard butalso to enjoy their work.”

Marquet, a board memberof Athena — an organizationfor executive women in theSan Diego life sciences, tech-nology, health care and busi-ness communities — proudlynoted that AltheaTechnologies’ staff is “over 65percent women,” and said thathardworking employees canapply what they learn andadvance quickly.

The company continues topresses forward, too. In 2007Althea Technologies receiveda fourth consecutive FastGrowth Award by DDeellooiittttee &&TToouucchhee.

“We have very aggressivegrowth targets,” Marquet said.

Ferre sees his wife and col-league in the brightest light:“Magda is one of our mainstrengths, a very charismaticleader; you are drawn to her.She has a mix of charm andinner strength,” he said.

“You can see the sense ofpurpose in her, the purposeand integrity of creating a bet-ter life for yourself and for therest of us,” Ferre said.

Chung Klam is a San Diego-based freelance writer.

SSoouurrccee CCooddee:: 2200008800332277ccrrff

printing, demonstrating thepresence of the skin cell donorDNA in the blastocyst, whileone was further confirmed tobe a clone by an additionalmitochondrial DNA (mtDNA)analysis, which revealed thepresence of oocyte donormtDNA without any oocytedonor nuclear DNA.

For technical reasons, thegenetic material in theremaining two blastocysts didnot amplify to the extentrequired for analysis, and sowhile it is likely they wereclones, the evidence requiredto claim that with certaintywas not present. Thus, in thisstudy, cloned blastocysts weresuccessfully created fromapproximately 10 percent ofall mature donated oocytes,an unexpectedly high rategiven past research in thisfield.

The oocytes used in thisstudy were donated, withoutcompensation, by egg donorsand intended parents under-going egg donation cycles for

reproductive purposes at theReproductive Sciences Center(RSC) in La Jolla, a leadingfertility center specializing inegg donation and otheradvanced assisted reproduc-tive technologies.

“As important as stem cellresearch is, all of us involvedin this study realized that ouroverriding responsibility wasto the intended parents whoentrusted us with their dreamof having a child,” saidCatharine Adams, a co-authoron the paper and RSC labora-tory director. “We in the IVFlaboratory felt comfortable inthis collaboration because wehave consistently achievedpregnancy rates of greaterthan 80 percent from thesetypes of high-quality eggdonors. In this study, all theintended parents were suc-cessful in achieving a preg-nancy.”

Stemagen and the RSCworked closely, over anextended period of time, witha leading independentInstitutional Review Board to

develop procedures ensuringthat all parties received com-prehensive informed consentand that confidentiality wasprotected. All research proce-dures, including the culturingof the skin cells (fibroblasts),were performed under clinicallaboratory conditions in closecooperation with the AssistedReproductive TechnologiesLaboratory of the RSC, direct-ed by Adams.

Wood, who is also the med-ical director at RSC, pointsout that the research wasexhaustively scrutinized bysome of the world’s mostrespected scientists andunderwent an exceptionallyrigorous process of verifica-tion. “This achievement wasso critical to our field, we feltwe should spare no effort inthe process of establishingthe validity of our work,” hesaid.

Jimenez is director of cor-porate communications forStemagen.

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StemagenContinued from Page 3

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New home hair drug test detectsdrug use, usage frequency

BByy NNEEPPII II.. RRUUSSSSEELLLLSpecial to the Daily Transcript

A new home-based hair folli-cle drug test kit calledHairConfirm can detect druguse as well as usage frequencyfor up to 90 days, equippingparents with a valuable newtool for combating substanceabuse.

Developed by biotech com-pany CCoonnffiirrmm BBiiooSScciieenncceess, thetest overcomes the limitationsof two- or three-day saliva orurine screenings that enableusers to escape detection byavoiding drug use for a shortperiod. It is also the first homehair test to report the amountof each chemical detected aswell as whether the results indi-cate low, medium or highusage.

The HairConfirm kit screensfor marijuana, cocaine,amphetamines, opiates andphencyclidines, includingecstasy, heroin, codeine, PCPand angel dust. Test results areavailable online with a speci-men ID number and passcodetwo business days after the labreceives the sample, providinganonymity with no need to sup-ply personal information.Customers without Internetaccess can opt to receive resultsby mail.

Results are provided indetailed written reports thatindicate positive or negativefindings for each of the fiveclasses of drugs evaluated,specify the concentration levelsof each drug for which resultswere positive, and allow par-ents to compare those concen-tration levels against the ranges

typically found in recreational,daily/weekend and constantusers. This information, alongwith a free counseling hotlineincluded in the price of the kit,can assist parents in determin-ing what kind of intervention isneeded.

Tests are run on small hairsamples cut close to the scalpand at least 1.5 inches long toprovide enough hair for a 90-day evaluation. A second test isperformed on all positiveresults to eliminate false posi-tives, ensuring accurate results.Even the smallest amount of adrug will show up on a test, andnegative tests definitively provethat an individual has not con-sumed illicit drugs in the last90 days.

Two-thirds of parents wouldask their teenage son or daugh-ter to take a home drug test as ameans of keeping them awayfrom drugs, according to a2006 survey of 2,064 parentsaround the country byWashington, D.C.-based opin-ion research and polling organ-ization RT Strategies. The sur-vey was co-sponsored bynotMYkid, a national nonprofitorganization devoted to drugabuse prevention.

“HairConfirm is designed tohelp parents take a proactiverole in preventing their chil-dren’s illegal drug use,” saidZeynep Ilgaz, CEO of ConfirmBioSciences. “Talking with yourchild about drugs and takingpreventive measures like hairdrug testing can be a significantfactor in preventing substanceabuse.”

Teens Today research from

SADD (Students AgainstDestructive Decisions) andLLiibbeerrttyy MMuuttuuaall GGrroouupp has sug-gested that parents are the No.1 deterrent to a teen’s decisionto use drugs. Studies by thatgroup have shown that theaverage age of first drug use is13; more than one-third ofteens have used drugs, includ-ing almost one in six middleschool students and 30 percentof their high school counter-parts reporting marijuana use;and 13 percent of high schoolstudents report using drugssuch as cocaine, crack or ecsta-sy.

In 2006, 21 percent of 8thgraders, 36 percent of 10thgraders and 48 percent of 12thgraders reported having takenillicit drugs at some point,according to the annualMonitoring the Future surveyof 50,000 students in thosegrades in more than 400schools nationwide funded bythe National Institute on DrugAbuse.

Hair follicle drug testing is ahighly trusted method of drugdetection regularly used byemployers and law enforce-ment agencies because of itsaccuracy, long window of detec-tion and resistance to tamper-ing. In two independent stud-ies, hair drug testing uncoveredfive to 10 times more drug usersthan urinalysis. Urinalysis alsocarries the risk of substitutionof a sample, dilution and addi-tion of a foreign substancedesigned to skew the results.

Russell is with GBSS|PR.SSoouurrccee CCooddee:: 2200008800332277ccrrll

7THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

Distinct flavors featured in San Diego life sciences real estate marketBByy JJOOHHNN BBOONNAANNNNOO aanndd

TTRRAACCYY LLAANNDDOOWWSSKKIIGrubb & Ellis|BRE Commercial

Over 500 life-science compa-nies occupy more than 12 mil-lion square feet in the SanDiego market, about half ofwhich is owner-occupied. Themarket has experienced somegrowing pains over the last fewyears as company mergers andacquisitions have caused con-siderable space consolidation.Fortunately, the appetite of bigpharmaceuticals for biotechcompany acquisitions is alsofueling funding of new venture-capital-based startups, much inthe same way that the openingof the IPO market spurs newcompany investment.

Currently there is more than1.3 million square feet of labspace availabilities, about halfof which is sublease space; how-ever, tenant demand has beenon the rise and several land-lords are actively negotiatingnew leases. Base lease ratesrange from $25-$36/year (netof all operating expenses) andare expected to increase as theindustry grows and absorbs thelimited space in this prime mar-ket. Lease terms range from twoto 15 years and renewal optionsare commonly given and ten-ants typically exercise them.The primary biotechnologymarketplace in San Diego isclustered around UCSD.

The submarkets, which rep-resent extreme variations in fla-vor, attracting different types ofcompanies with varied needs,are Torrey Pines, UniversityTowne Center (UTC), SorrentoValley, Sorrento Mesa andCarlsbad. The first four areasare geographically contiguous,with Carlsbad standing apart.Despite such close proximity,each submarket displays itsown unique character andappeal to biotech tenants of alltypes.

TToorrrreeyy PPiinneess ssuubbmmaarrkkeettThe Torrey Pines biotechnol-

ogy cluster was originally mas-ter-planned by the city of SanDiego and zoned for ScientificResearch (SR). This zoning per-mits scientific research use,associated manufacturing uses,as well as corporate headquar-ters measuring 40,000 squarefeet-plus. The presence ofworld-renowned scientificresearch institutes such as theUniversity of California, SanDiego; The Salk Institute; The

Scripps Clinic & ResearchFoundation; the SidneyKimmel Cancer Center and theBurnham Institute have con-tributed to this area’s advance-ment as a biotechnologyhotbed.

In addition to these researchinstitutes, Torrey Pines is hometo pharmaceutical giants PPffiizzeerr(NYSE: PFE), JJoohhnnssoonn &&JJoohhnnssoonn (NYSE: JNJ) andNNoovvaarrttiiss (NYSE: NVS).

Buildings in the market arecharacterized by ocean ormountain views and are situat-ed in a natural setting of bluffsfilled with torrey pine trees.

The synergy created by thiscluster of intellectual capital isunparalleled here in San Diegoand comparable only to themost sophisticated life scienceclusters in country, such asdowntown Boston or South SanFrancisco. This market is fullydeveloped and only a couple ofsites are suitable for additionaldevelopment.

UUnniivveerrssiittyy TToowwnnee CCeenntteerr((UUTTCC)) ssuubbmmaarrkkeett

UTC is the location of choicefor many of the region’s largestbiotechnology companiesbecause of the market’s prox-imity to Torrey Pines, unri-valed amenities and the gener-al business community. Thisarea of the San Diego bio-science market consists prima-rily of multitenant Class “A”high-rise and mid-rise officebuildings. The city of SanDiego designated approxi-mately 150 acres in theEastgate/Towne Centre Drivearea as an SR zone to continueto promote the growth of thebiotechnology industry.

There is currently more than1.5 million square feet of bio-science space in the submarketand one biotech project underconstruction, the NexusUniversity Research ScienceCenter, which will total 161,871square feet and will be availablefor life science companies in

mid- to late 2009.

SSoorrrreennttoo VVaalllleeyy ssuubbmmaarrkkeettEmerging as San Diego’s first

high-tech corridor in the early1970s, Sorrento Valley has beenthriving ever since. In fact,numerous life science compa-nies started in Sorrento Valley.The market was originally con-ceived to provide multitenantoffice and industrial space pri-marily to startup and smallertenants. Over the last 15 years,the market has gradually shift-ed toward biotechnology as ten-ants and landlords convertedsuitable buildings to accommo-date laboratory users.

SSoorrrreennttoo MMeessaa ssuubbmmaarrkkeettThe Sorrento Mesa submar-

ket consists of mostly researchand development (R&D) andindustrial buildings, but alsohas many multitenant mid- andhigh-rise office buildings. Thearea offers a less expensivealternative to Torrey Pines and

UTC and available land forbuild-to-suits. While lab usersare sprinkled throughout themarket, the build-to-suitopportunities primarily exist inthe northwest section ofSorrento Mesa, overlookingSorrento Valley with views ofTorrey Pines and the PacificOcean.

Another unique subclusterexists on an elevated streetcalled Nancy Ridge, whicharguably is in westernMiramar, but the buildings aremore similar to the R&D build-ings in Sorrento Mesa. Thedense cluster of lab buildingson Nancy Ridge currentlyexceeds 750,000 square feet oflab space.

CCaarrllssbbaaddLocated in North County,

Carlsbad is the smallest biotechcluster area in San DiegoCounty. Some life science com-panies have chosen Carlsbad asa less congested and less expen-

sive alternative. Carlsbad willlikely continue to attract newlife science companies due tothe availability of developableland. Companies such asIInnvviittrrooggeenn (Nasdaq: IVGN),IIssiiss PPhhaarrmmaacceeuuttiiccaallss (Nasdaq:ISIS), GGeennooppttiixx (Nasdaq:GXDX) and EEppeeiiuussBBiiootteecchhnnoollooggyy are headquar-tered there.

With an inventory of approx-imately 593,333 square feet, labvacancy is currently around 15percent.

Bonanno and Landowskiare laboratory real estateexperts with Grubb &Ellis|BRE Commercial’s LifeSciences Group; they main-tain comprehensive marketinformation and track all labavailabilities in San DiegoCounty. They can be reachedat (858) 546-5400 or via e-mail at jbonanno@breb.comor tlandowski@breb.com.

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TorreyPines Thera announcesphase 2 trial

BByy EELLIIZZAABBEETTHH MMAALLLLOOYYThe Daily Transcript

TToorrrreeyyPPiinneess TThheerraappeeuuttiiccssIInncc. (Nasdaq: TPTX)announced last week it has ini-tiated a Phase 2 study as part ofits development for a drug tofight a dry mouth disorder.

The company is conductinga randomized, double-blind,placebo-controlled, crossoverstudy with a Latin squaredesign for NGX267, a mus-carinic agonist in developmentfor xerostomia, a dry mouthdisease often related to theautoimmune disorder Sjogren’ssyndrome, radiation treat-ment, HIV, side effects of med-ications or aging. NGX267 isparticularly for xerostomiarelated to Sjogren’s syndrome.

Approximately 24 patientswill be enrolled at three sites inthe United States. In four dis-tinct treatment periods, eachpatient will be randomized toreceive a single dose of 10 mg,15 mg and 20 mg of NGX267and placebo. The order oftreatment is determined by theLatin square design. The pri-mary endpoint of the study isquantitative measure of sali-vary flow.

“We are focusing our clinicaldevelopment activities on max-imizing the value of our leadcompounds to take advantageof their versatility,” said NeilKurtz, M.D., president andCEO of TorreyPinesTherapeutics. “Three Phase 1studies have already demon-strated the safety and tolerabil-ity of NGX267.”

In a Phase 1 multiple-dosestudy completed in September,salivary flow increased linearlywith doses of NGX267, accord-ing to the company.

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8 THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

Prevost Construction provides valuableservices to biotech community

The life science industry has been a pri-mary focus of Prevost Construction sinceits founding in 1989. Completing tenantimprovements in a variety of biotech, phar-maceutical and medical research facilitiesthroughout San Diego County, PrevostConstruction has earned a reputation amongthe life science community for innovativethinking, expert guidance and superior proj-ect results.

BioMed Realty Trust, a REIT focusedon providing real estate to the life scienceindustry, is one of Prevost’s newest clients.

“Within our industry, there is a tremendousneed for a general contractor that possessesthe technical expertise to perform renovationwork in a laboratory environment with preci-sion, speed and sensitivity to budget con-straints,” said Pico Mina, director of realestate development for BioMed Realty Trust.“Prevost Construction has demonstrated itsability to meet the needs of our tenants in allof these areas and the company delivers atop-quality project.”

In one of BioMed’s newest acquisitions inthe Torrey Pines area of La Jolla, PrevostConstruction recently completed a 10,278-square-foot renovation of a chemistry andbiology lab for cancer research firmApoptos. It is now under way on AnaptysBiosciences’s 16,501-square-foot facilityfeaturing a renovated biology lab, tissue cul-ture rooms and executive office space.

“Prevost Construction is a superior contrac-tor in every aspect,” said Dr. Robert Peach,vice president of biology for Apoptos Inc.“The Prevost team managed the constructionprocess very effectively, keeping us informedas the project moved along. We are veryhappy with the final product and would rec-ommend Prevost Construction to anyone.”

In 2007, Prevost was selected byVeralliance Properties, a corporate real

estate solutions company focused on officeand life science assets, in joint venture withBioMed Realty Trust, for a 16,923-square-foot build-out valued at $2.1 million forScripps Health. A state-of-the-art facility,the new clinic screens patients and processesspecimens for all of the Scripps Hospitals inthe San Diego area. Prevost is now underway on a 20,000-square-foot conversion oflab space to office space for NeurocrineBiosciences (Nasdaq: NBIX), a product-based biopharmaceutical company that isconsolidating operations within its two-build-ing campus in Del Mar Heights.

“Our roots in build-outs for companies inthe life science industry run deep,” said JamiePrevost, president of Prevost Construction.“One of our company’s first projects in 1990was a 10,000-square-foot clean room forBlock Medical in Carlsbad. The successfulcompletion of this $600,000 project createda long-term relationship with equity partnerGreg Sanckoff, who went on to acquire inter-ests in medical instrument manufacturer RiverMedical and IVAC Corp. In a merger withIMED in 1994, Alaris Medical was formedand over 250,000 square feet of renovationswere performed in several facilities through-out San Diego.”

The company added that this relationshipendured through most of the decade and pro-duced in excess of $12 million in completedprojects. The relationship eventually came toa close when Alaris was acquired byCardinal Health in 2004.

“Long-term relationships are the founda-tion of our business success,” added Prevost.“Our extensive experience in second andthird generation remodel work in combina-tion with our technical understanding of thelife science industry has allowed us to formu-late a well-built combination of skills andservices that our clients can rely on.”

Submitted by Prevost Construction

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Close-up: James B. Lasswell

Indus Technology president salutes value of happy employeesBByy JJIILLLL BBLLAACCKKFFOORRDDSpecial to the Daily Transcript

In today’s business climate,most corporate leaders willtell you their primary asset istheir employees — but not allcorporate cultures make it apriority to truly cultivate thatasset. IInndduuss TTeecchhnnoollooggyy IInncc..’sdoes.

“We are primarily a govern-ment contractor whose pri-mary product is services. Wedon’t build anything and don’thave any particular product,”said James B. Lasswell, presi-dent and senior engineer ofIndus Technology. “We existbecause of excellent people wehave in the company that weprovide to our customers inthe form of services. We try toeven carry it a little further.”

Founded in 1991 in SanDiego by Lasswell and his latewife, Kathleen P. Sridhar,Ph.D, Indus Technology pro-vides services such as systemsengineering, technical andprogram management, suchas C4I communication sys-tems, logistics, IT services andfinancial management. Forinstance, one of the core com-petencies the company hasdeveloped centers on anunderstanding of how toeffectively manage appropri-ated monies. Its key clients

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are in the government sector,such as the Department of theNavy divisions like SPAWARand SSC, and otherDepartment of Defense divi-sions.

Lasswell himself grew up ina military family in SanDiego; his father was in the

Marine Corps. Following inthose footsteps, Lasswell wentinto the Navy and feels luckyto have had the Navy send himto grad school, where he sayshe was able to learn the tech-nical skills that led him tobegin Indus Technology uponhis retirement.

sure customers are happy.And, he said, “If we make thecustomer happy, our businesswill grow.”

He attributed this culture inpart to Sridhar, whom hecalled a “tremendous leader ofpeople,” as well as to his ownmilitary background.

The long-time San Diegoresident also believes that giv-ing back to the community isessential for his company’ssuccess. Lasswell is highlyinvolved with the NDIA(National Defense IndustrialAssociation), which allowshim to mentor other smallbusinesses in the area. Someof his best small businessadvice?

“I always tell small compa-nies that first off, you’ve got tobe prepared to answer the ques-tion of why somebody would goto your company as opposed tohundreds of thousands of oth-ers,” he said. “You’ve got toanswer that question prettymuch every day.”

Another key factor Lasswellpoints to is networking andbeing able to deal with poten-tial clients in a way that makesyour company a preferredvendor. He repeats the salesaxiom: People buy thingsfrom people they like.

With its focus on govern-ment contracts, it might seemthat the company’s growthstems in part from the currentwar efforts. But because IndusTechnology acts more like aconsultancy instead of provid-ing products, it can actuallysee fewer dollars during timesof conflict.

“I think it’s safe to say thatwar in Iraq has taken a lot ofdiscretionary money,”Lasswell said. “And it’s uti-lized that money in direct sup-port of the fighting troops in

helping build infrastructurein Iraq and Afghanistan. Thatreduces the amount of discre-tionary money that can bespent on infrastructure andR&D organizations likeSPAWAR.”

For Lasswell, it seems, themilitary is not just his busi-ness — but in his blood. AndLasswell said he likes func-tioning and living within astrong defense-oriented com-munity like San Diego.

“I really enjoy supportingthe Navy and DefenseDepartment. It’s somethingthat is part of my heritage. Ispent 20 years in the Navy,but I continue to go to mili-tary events and am happy tobe supporting the military as acontractor,” he said. “You did-n’t listen to light jazz whenyou called the company (dur-ing the call transfer). You lis-tened to marching music. I’mnot light jazz — I’m a defensecompany.”

Yet while Lasswell’s mannerof speaking is matter-of-factand his industry a serious one,he takes time to appreciatehow much his business — andSan Diego — mean to him.

“It’s a fun business to be in;I just really enjoy it. It’srewarding, and I feel gooddoing what we do. You’ve gotto go home and look at your-self in the mirror and say:What have I done today, haveI done anything good? Andthe answer is that we’ve pro-vided a great place to work,where people enjoy whatthey’re doing that is a signifi-cant benefit to the nationaldefense. It’s something to beproud of.”

Blackford is a Los Angeles-based freelance writer.

SSoouurrccee CCooddee:: 2200008800332277ccrrii

The company has experi-enced steady growth since itwas founded, growing from acouple of employees to 215currently. When asked howhe’s achieved that growth,Lasswell again points directlyto his staff.

“It’s real simple,” he said.“We have a corporate cultureand belief that in the servicesindustry, the only assets thecompany has are its superiorpeople. So every one of us herein management, our primarypurpose is to take care of ourexcellent employees.”

Because of his manage-ment’s focus on ensuring thatemployees both enjoy whatthey do and have the tools todo their jobs effectively,Lasswell continued, he can inturn ask that his staff make

NuVasive moves into newcampus to accommodate growth

BByy JJAASSOONN RRAANNDDOOSpecial to the Daily Transcript

NNuuVVaassiivvee IInncc.., a San Diegocompany that develops prod-ucts for minimally invasivespinal surgery, is moving to anew campus-style facility toaccommodate its growingbusiness.

NuVasive will relocate itsheadquarters to a two-build-ing campus in Sorrento Valley.The new campus-style envi-ronment will accommodateall of the company’s depart-ments in a single location andenable growth up to 300,000square feet over the next sev-eral years. One building willbe dedicated to research,product development, mar-keting and surgeon trainingactivities, while the other willhouse the company’s adminis-trative functions as well assales and corporate training.

The facility, located withinfour miles of NuVasive’s cur-rent headquarters in SanDiego, will allow all of thecompany’s 300 San Diego-based shareowners to work inone location. The new campusenvironment providesNuVasive with increasedinfrastructure to accommo-date its rapidly growing workforce, support enhancedtraining and testing facilities,and provide a foundation forexpanded clinical use of itsbroadened product offerings.

Alex Lukianov, chairmanand chief executive officer ofNuVasive, said the new cam-pus provides ample room forthe company to grow beyondthe next decade.

“The new campus providesa strong foundation for con-tinued expansion, allowing usto leverage our unique cultureof Absolute Responsiveness inorder to achieve our nextmajor milestone, reaching$500 million in revenues. Allof our shareowners are deeplycommitted to this milestone.Much more than just employ-ees, we call them shareownersbecause since day one, every-one has direct ownership inNuVasive. The focus of thisgroup of partners workingtogether has been a key part ofour growth, and this newenvironment allows us toexpand that focus.”

NuVasive’s business experi-enced significant growth in2007, with full year 2007 rev-enue increasing 57 percent to$154.3 million. In 2007,NuVasive’s stock price roseapproximately 70 percent.The company has also pub-licly guided Wall Street toexpect mid-30 percent rev-enue growth per year over thenext several years. The plan toachieve this growth rate isdriving deeper product pene-tration of its existing platformof products, expanding mar-ket share in the United States,and making an entrance intoselect international marketssuch as the UK and Germany.

At the core of NuVasive’soffering to spine surgeons isthe XLIF, or eXtreme LateralInterbody Fusion procedure,which allows surgeons toapproach the spine laterallyrather than through theabdomen or back.

Approaching the spinethrough the side allows sur-geons to avoid criticalanatomical structures andmajor trauma associated withtraditional spine surgery tech-niques, resulting in less oper-ating time and reduced painand blood loss. Hospitals uti-lizing the XLIF procedurehave been able to shortenoperating time by more than50 percent, foster more rapidpatient recovery (days ratherthan weeks), and substantiallyreduce the overall cost of stan-dard spine procedures.

NuVasive’s proprietary,software-driven nerve avoid-ance system, NeuroVisionmakes the lateral approachpossible. NeuroVision, com-bined with MaXcess, a uniquesplit-blade design retractionsystem; and specializedimplants, like SpheRx andCoRoent, collectively form theMaximum Access Surgery(MAS) platform, a minimallydisruptive system that pro-vides surgeons with a lessinvasive approach for per-forming spinal fusion surgery.

The new campus will fea-ture a state-of-the-art trainingfacility that will enableNuVasive to train largergroups of surgeons in MASand XLIF procedures, includ-ing surgeons new to the tech-niques as well as surgeonslearning new indications.NuVasive trains approximate-ly 400 surgeons at its head-quarters each year.

“It is important for us to

See NuVasive on 12

9THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

Tech & biotech roundtable

Lack of communication obstacle to convergence of wireless, life science businessesBByy EELLIIZZAABBEETTHH MMAALLLLOOYY

The Daily Transcript

When Arlene Harris, who’sbeen in the wireless industrysince before most people couldimagine a cell phone, was tryingto secure funding for a compa-ny that designs phones for olderpeople, she was told there wasno market for her product.

“We have older consumers,”she said. “The venture marketwants to invest in youth, and wehave perceptions that you’regaining customers that aregoing to die and you’re notgoing to have any products tofill in, so your business isn’tgoing to have sustainability.”

Harris’ company, GGrreeaattCCaallllIInncc.., managed to get off theground with funding fromHarris and her husband, and aproduct SSaammssuunngg built for theDel Mar company free ofcharge. The company now hastens of thousands of customersacross the United States. ButHarris said that disconnectbetween what venture capital-ists are after and what the wire-less industry can create canoften stifle creative young com-panies.

Others in the industryagreed. At a recent DailyTranscript roundtable featuringlocal leaders of the life scienceand wireless industries, there

was much discussion on howthose two sectors are merging.But there was also talk abouthow sometimes a lack of com-munication — be it betweencompanies and investors, engi-neers and consumers, or evendifferent generations — cansometimes have more sway overwhat companies and productssurvive than anything else.

Harris’ idea was to create cellphones that act more like regu-lar phones. There are no cam-eras, games or hip ring tones.The phones simply make calls.The buttons are bigger and thespeakers are louder. Whilethese phones are often per-ceived as being for elderly peo-ple, Harris also had the BabyBoom generation in mind. Thatgeneration is getting older, butthey still have a lot of wealth,are still accustomed to beingcatered to, and there are still alot of them.

“We’re going to have to con-tinue to innovate to stay rele-vant to the customers that aremoving into our age demo-graphic because their attitudesand needs are going to change,”she said. “We think we have aforever business.”

Despite her company’s suc-cess, however, Harris said shestill has trouble convincingsome venture capitalists.

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Darrel Drinan, founder andpresident of PPhhiillooMMeettrroonn, acompany that makes wirelesshuman sensing products, saidhe sees this disconnect as beingpervasive in the wireless and lifescience businesses. In largebiotech companies, he said,device departments often won’tspeak to the pharmaceuticaldepartments. At venture capitalfirms, the life science specialistsdon’t talk to the technology spe-cialists. In the past, this hasn’tbeen that big of a problem, buthe thinks the problem willincrease as industries becomemore integrated.

It’s also a problem as demo-graphics change. Perhaps con-trary to common perception,when it comes to health caretechnology, women actuallypurchase more electronics thanmen, Drinan said. The troubleis, the engineers designing theproducts are men, and theyoften have different wants andneeds from their electronics.

“Guys like buttons. Womendon’t like buttons,” he said.“Very simple things like thatwill cause the implementationfailures.”

Drinan said, however, that hethinks San Diego has the kindof business environment thatcould help small technologycompanies with outside-of-the-box ideas survive. The regionhas a history of different com-panies and sectors workingtogether, rather than acting asfierce competitors.

Don Jones, who heads upQQuuaallccoommmm’s (Nasdaq: QCOM)new wireless life science depart-ment, said the company hasmade a habit of creating teamsout of not just Qualcommemployees but also partnersfrom outside the company.

“Almost all of our work ispartnering with companies,”Jones said. “We bring bio-engi-neers and electrical engineersand physiology guys and M.D.stogether in solutions and forcethem to work together.”

But most of the local industryleaders agreed that, like with so

Roundtable participantsDDaarrrreell DDrriinnaann,, CEO

PhiloMetron

AArrlleennee HHaarrrriiss,, FounderGreatCall, Inc.

FFrreedd HHeerrnnaannddeezz,, PartnerMintz, Levin, Cohn, Ferris, Glovsky and Popeo PC

JJaassoonn HHoowwee,, CEOAwarePoint Corp.

DDoonn JJoonneessVP of Business Development, Health & Life Sciences

Qualcomm

LLaannccee KKuurraattaa,, PartnerMintz, Levin, Cohn, Ferris, Glovsky and Popeo PC

RRoobb MMccCCrraayy,, Senior AdviserTriple Tree

JJuuddyy MMuulllleerr--CCoohhnn,, President, CEOBiomatrica

JJooee PPaanneettttaa,, President, CEOBIOCOM

DDuuaannee RRootthh,, CEOCONNECT

many things, education is theanswer. Universities must showstudents that just creating elec-tronics isn’t going to change theworld; you must market it, theysaid. And the future financialbackers of the world must seethat just because somethinghasn’t been done doesn’t meanit won’t work.

Harris sits on the boards ofseveral universities and said sheis seeing more convergence atthe university level as well, butit’s still in its infancy.

“Every head of every businessschool in the country is lookingat: How can I make my gradu-ates broader? How can I makethem respect the science guy? Ifthey’ve got an engineeringschool, How can I expose themto what the marketing depart-ment contributes?” Harris said.“Right now, it’s in the labsbecause it’s just so difficult tofigure out how you change edu-cational institutions to try tomirror what you’re trying to doin industry.”

eelliizzaabbeetthh..mmaallllooyy@@ssddddtt..ccoommSSoouurrccee CCooddee:: 2200008800332277ccrraa

10 THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

Local Publicly Traded Biomed & Biotech FirmsRanked by Market Cap on March 24, 2008

Firm NameAddress

Phone, FaxE-mailURL

Market Cap onMarch 24, 2008

TickerSymbol

Fields of Research Major Products Executive(s) & Title(s)Year

Established

1

Amylin Pharmaceuticals Inc.9360 Towne Centre DriveSan Diego CA 92121(858) 552-2200, (858) 552-2212ir@amylin.com, www.amylin.com

$3,899,413,000 AMLNDeveloping innovative medicines to treatmetabolic diseases

Smylin, Exentide, Exenatide LAR, AC2592(GLP-1), AC3056, AC 162352 (PYY[2-26])

Daniel M. Bradbury, CEO 1987

2

Invitrogen Corp.1600 Faraday Ave.Carlsbad CA 92008(760) 603-7200, (760) 603-6500investor@invitrogen.com, www.invitrogen.com

$3,844,007,000 IVGN

Gene cloning and expression, electropharesis,protein purification, characterization andproduction, enzyme chemistry, molecularlabation and detection

Research tools in kit form, catalog, customproducts and services for biotechnology andbiopharmaceutical researchers and companiesworldwide for life science discovery, develop-ment and production

Gregory T. Lucier, President/CEO; David F.Hoffmeister, Sr. VP/CFO; Nicholas M.Barthelemy, Sr. VP, BioProductionSystems and Services

1987

3

ResMed Inc.14040 Danielson St.Poway CA 92064(858) 746-2400, (858) 622-2043investorrelations@resmed.com, www.resmed.com

$3,238,607,000 RMD Sleep-disordered breathing Devices to treat sleep-disordered breathingPeter C. Farrell, Founder/CEO; KieranGallahue, President

1989

4

Illumina Inc.9885 Towne Centre DriveSan Diego CA 92121(858) 202-4500, (858) 587-4297investor@illumina.com, info@illumina.comwww.illumina.com

$2,981,718,000 ILMNLarge scale analysis of genetic variation andfunction

Integrated array-based systems, reagents,software and services for large-scale geneticanalysis including genetyping and gene expres-sion profiling

Jay T. Flatley, President/CEO; ChristianCabou, Sr. VP, General Counsel; ChristianHenry, Sr. VP/CFO; Arthur Holden, Sr.VP/Corp. Market Development; TristanOrpin, Sr. VP, Commercial Operations;John Stuelpnagel, DVM, Sr.VP/COO/General Manager; John West, Sr.VP, General Manager, DNA Sequencing

1998

5

Gen-Probe Inc.10210 Genetic Center DriveSan Diego CA 92121(858) 410-8000, (858) 410-8625ir@gen-probe.com, www.gen-probe.com

$2,642,028,000 GPRO Nucleic acid diagnostics for human diseaseRapid, accurate nucleic acid tests (NAT) todiagnose human diseases and screen donatedblood

Henry L. Nordhoff,Chairman/President/CEO

1983

6

Isis Pharmaceuticals Inc.1896 Rutherford RoadCarlsbad CA 92008(760) 931-9200, (760) 603-4650info@isisph.com, www.isispharm.com

$1,386,714,000 ISIS

RNA-based drug discovery and developmentto treat metabolic, cardiovascular, inflamma-tory and viral diseases, and cancer; biosensorto identify infectious organisms; small mole-cule drugs that bind to RNA

RNA-based drug discovery and development totreat metabolic, cardiovascular, inflammatoryand viral diseases, and cancer

Stanley T. Crooke, Chairman/CEO; B.Lynne Parshall, Exec. VP/CFO; C. FrankBennett, VP, Antisense Research; RichardK. Brown, VP, Business Development;David J. Ecker, VP, Scientific Head of IbisDivision; Jeff Landes, Assistant Directorof Patents

1989

7

NuVasive Inc.4545 Towne Centre CourtSan Diego CA 92121(800) 455-1476, (858) 909-2000info@nuvasive.com, www.nuvasive.com

$1,205,136,000 NUVADesign, development and marketing of prod-ucts for the surgical treatment of spine dis-orders

Maximum Access SurgeryAlexis V. Lukianov, Chairman/CEO; KeithValentine, President/COO; Kevin C.O’Boyle, Exec. VP/CFO

1995

8

Arena Pharmaceuticals Inc.6166 Nancy Ridge DriveSan Diego CA 92121(858) 453-7200, (858) 453-7210invest@arenapharm.com, www.arenapharm.com

$561,311,900 ARNA G protein-coupled receptors Drug discovery and development

Jack Lief, President, Director/CEO; StevenSpector, Sr. VP/Counsel/Secy; RobertHoffman, VP, Finance; Louis J. Scotti, VP,Business Development & Marketing;Dominic Behan, Sr. VP/CSO

1997

9

Quidel Corp.10165 McKellar CourtSan Diego CA 92121(858) 552-1100, (858) 453-4338ir@quidel.com, www.quidel.com

$541,308,000 QDELReproduction, infectious diseases, generalhealth screening, bone health and autoim-mune disorders

Point-of-care rapid diagnostic tests for thedetection of medical conditions and illnesses

Mark Pulido, Chairman, Caren L. Mason,President/CEO; Thomas Brown, ViceChairman; Rod Dammeyer, President

1979

10

Halozyme Therapeutics11588 Sorrento Valley Road, Suite 17San Diego CA 92121(858) 794-8889www.halozyme.com

$527,069,400 HALO

Developing and commercializing productsbased on the extracellular matrix for thedrug delivery, oncology and dermatologymarkets

cGMP Halozyme’s first recombinant humanenzyme Cumulase and Hylenex

Jonathan E. Lim, President/CEO; GregoryI. Frost, CSO

1998

11

Ligand Pharmaceuticals Inc.10275 Science Center DriveSan Diego CA 92121(858) 550-7500, (858) 550-1826investors@ligand.com, www.ligand.com

$399,794,600 LGND.PK

Cancer, pain, dermatology, men’s andwomen’s health, osteoporesis, metabolic dis-orders, cardiovascular and inflammatory dis-eases

Avinza, ONTAK, Targretin capsules, Targretingel, Panretin gel

John Higgins, President/CEO; MartinMeglasson, VP, Discovery Research; ZofiaDziewanowska, VP, Clinical Research;Syed Zazmi, VP, Business DevelopmentStrategic Planning; John Sharp, VP ofFinance/CFO

1987

12

Acadia Pharmaceuticals Inc.3911 Sorrento Valley Blvd.San Diego CA 92121(858) 558-2871, (858) 558-2872info@acadia-pharm.com, www.acadia-pharm.com

$342,056,700 ACAD Central nervous system disorders Drug discovery and developmentLeslie L. Iversen, Chairman; Uli Hacksell,CEO; Mark R. Brann, President/CSO

1993

13

Sequenom Inc.3595 John Hopkins CourtSan Diego CA 92121(858) 202-9000, (858) 202-9001lrawson@sequenom.com, www.sequenom.com

$276,964,000 SQNM Genomics, drug target discovery

Proprietary instrumentation, the MassARRAYsystem, reagents, services, and informationthat facilitates analysis of genes and singlenucleotide polymorphims, or SNPs and geneexpression analysis and methylation analysis

Harry Stylli, President/CEO; Charles R.Cantor, CSO; Elizabeth Dragon, Sr. VP,Research and Development; MichaelMonko, Sr. VP, Sales and Marketing

1994

14

Cypress Bioscience Inc.4350 Executive Drive, Suite 325San Diego CA 92121(858) 452-2323, (858) 452-1222ir-info@cypressbio.com, www.cypressbio.com

$263,129,600 CYPBProviding products for the treatment ofpatients with functional somatic syndromesand other central nervous system disorders

Drugs and drug development

Jay D. Kranzler, Chairman/CEO; R. MichaelGendreau, CMO/VP, Development; DeniseWoolard, VP, Business & Legal Affairs;Sabrina Martucci Johnson, VP/CFO;

1981

15

Neurocrine Biosciences Inc.12790 El Camino RealSan Diego CA 92130(858) 617-7600, (858) 617-7602ir@neurocrine.com, www.neurocrine.com

$199,483,600 NBIXInsomnia, anxiety, depression, diabetes, mul-tiple sclerosis, irritable bowel syndrome, eat-ing disorders, pain and autoimmunity

Biotechnology and drugsJoseph A. Mollica, Chairman; Gary A.Lyons, President/CEO; Kevin Gorman,Founder/COO

1992

16

Senomyx Inc.4767 Nexus Centre DriveSan Diego CA 92121(858) 646-8300, (858) 404-0752info@senomyx.com, www.senomyx.com

$167,787,900 SNMX Products relevant to taste and olfactionDiscovery and development of savory, sweetand salt flavors

Kent Snyder, President/CEO; Mark J.Zoller, CSO/Sr. VP of Research; JohnPoyhonen, CFO/CBO/VP

1998

17

Pure Bioscience1725 Gillespie Way, Suite HEl Cajon CA 92020(619) 596-8600, (619) 596-8700www.imspure.com

$139,625,300 PURE.OBPharmaceutical, water purification and dis-pensing, and home drinking water

Fillmaster Pharmacy water purification anddispensing systems; Nutripure Home WaterFiltration System

Michael Krall, President/CEO; AndrewBuckland, CFO; Donna Singer, Executive,VP

1992

18

Santarus Inc.10590 W. Ocean Air Drive, Suite 200San Diego CA 92130(858) 314-5700, (858) 314-5701contact@santarus.com, www.santarus.com

$135,986,000 SNTSAcquiring, developing and commercializingproducts for the prevention and treatment ofgastrointestinal (GI) diseases

Products for the prevention and treatment ofGI diseases; no currently approved products;initial product candidates are formulationsdesigned to provide rapid and sustained actionagainst a variety of upper GI diseases and dis-orders; Santarus first product candidates SAN-05; other products, including a capsule and achewable tablet, are in formulation develop-ment

David F. Hale, Chairman; Gerald T. Proehl,President/CEO, Director; Debra P.Crawford, CFO/Sr.VP/Treasurer/Secretary; William C. DenbyIII, Sr. VP, Commercial Operations;Warren E. Hall, Sr. VP,Manufacturing/Product Development

1996

19

Vical Inc.10390 Pacific Center CourtSan Diego CA 92121(858) 646-1100, (858) 646-1150info@vical.com, www.vical.com

$135,309,500 VICLGene-based vaccines and pharmaceuticalsfor human therapy

DNA vaccines for infectious diseases, gene-based cancer immunotherapies, gene-basedtherapeutic proteins

Vijay B. Samant, President/CEO; JimChurch, VP/CFO, Secretary; RobinJackman, Sr. VP, Business Operations;Alain Rolland, Sr. VP, ProductDevelopment

1987

20

Dexcom Inc.5555 Oberlin DriveSan Diego CA 92121(858) 200-0200, (858) 200-0201www.dexcom.com

$127,607,400 DXCMPioneering technologies for the continuousmonitoring of glucose in people with dia-betes

Continuous Glucose Monitoring systemsAndrew P. Rasdal, President/CEO; SteveKemper, CFO

1999

Data Source: Bloomberg and the Companies. Listed by Market Cap on March 24, 2008. This is a partial list; a more complete listing can be found at sourcebook.sddt.com. N/A: Not Applicable, n/a: not available, wnd: would not disclose. It is not theintent of this list to endorse its participants, nor to imply that a company's size or numerical rank indicates its quality or service. We reserve the right to edit listings or to exclude a listing due to insufficient information. Compiled by Robin Scott,robin.scott@sddt.com. Last updated 3/2008.

11THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

ing to form a partnershipwith or sell developmentrights to smaller biotech orspecialty pharma compa-nies. Such alliances havegrown sharply in recentyears; about $19 billion wasspent on securing such part-nerships in both 2006 and2007, compared with lessthan $10 billion annuallyfrom 1999-2005, althoughthe increase can’t be attrib-uted solely to targeted treat-ments, according to theErnst & Young GlobalBiotechnology Center.

When the antidepressantvilazodone failed to show asignificant benefit in a mid-stage trial its originator,MMeerrcckk KKGGaaAA, decided totake its portfolio in a differ-ent direction.

The German company —which isn’t affiliated withNew Jersey-based MMeerrcckk &&CCoo.. (NYSE: MRK) — soldthe rights to GenaissancePharmaceuticals, a companysince acquired by CClliinniiccaallDDaattaa IInncc.. (Nasdaq: CLDA)of Newton, Mass. The drughad shown promise in somepatients and had a goodsafety profile, and ClinicalData wanted to identify thepatient population for whomit works best, according toCarol Reed, the company’schief medical officer.

It was a matter of figuringwhy certain patientsresponded and others didn’t,Dr. Reed says. In September,Clinical Data said it foundpotential genetic markersthat enhance the drug’s effi-cacy in some patients, andlast week announced itwould begin clinical trials forthe second of its two criticallate-stage studies. The com-pany is “confident” it will beable to develop the biomark-er test to identify the popula-tion segment most likely torespond, Chief ExecutiveDrew Fromkin says.

Another drug close tobeing resurrected is bucin-dolol, which had been side-

lined by other pharmaceuti-cal companies whenresearch on similar cardio-vascular medicines appearedto show more promise.Rather than let the drug die,a company research scien-tist, Michael Bristow, boughtthe rights and formed a newcompany to develop it.

Dr. Bristow and his col-league Stephen Liggett havesince identified one genevariant that improvespatients’ response to bucin-dolol and another that islinked with heightened riskof side effects, according toDr. Bristow, chief scienceand medical officer. Thecompany, AARRCCAA DDiissccoovveerryyin Denver, will file for Foodand Drug Administrationapproval within the nextmonth or two and hopes tobring the drug to market inthe summer of 2009.

Success stories remainrare, however, and comingup with personalized treat-ments is challenging,genomic scientists say.Researchers not only mustidentify genetic variationsthat are related to how a dis-ease works, but figure outhow they interact with amedication as well.

Even when genomicknowledge can’t save a drug,it can shed light on the rea-sons for failure and spur anew way of thinking abouthow a medication works,according to Scott Reines, avice president in the phar-maceutical research-and-development unit ofJJoohhnnssoonn && JJoohhnnssoonn (NYSE:JNJ). Companies could alsodevelop and market teststhat identify patients with aparticular genetic variant.

“I think the bigger valueisn’t in going back and rescu-ing a particular drug, but youmay be able to go back andrescue a particular line ofthinking around a particularpathway,” says Dr. Rosenkransof the Personalized MedicineCoalition.

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GeneticsContinued from Page 5

12 THURSDAY, MARCH 27, 2008 • Who’s Who in Tech & Biotech • THE DAILY TRANSCRIPT

makes it impossible to fullyanalyze all of the prior art, allof the third-party patents, andall potential licensing andownership issues.

As a result, IP diligencefocuses first on those areas ofthe most concern, and theunderlying search and analy-sis focuses on the areas mostlikely to yield results. In theend, spending more time andmoney on IP diligence canincrease the level of confi-

dence in the results, but rarelyif ever fully answers all IPissues or eliminates all IP risk.

Typically, the level of dili-gence at the angel investmentstage is relatively limited.Tech Coast Angels, for exam-ple, forms volunteer diligenceteams to look into the dealpoints, including IP. The dili-gence team may or may notinclude a patent attorney.

Venture capital diligence isusually more extensive, ofteninvolving a detailed analysis ofpatent strength, third partyrights and ownership, typical-ly costing between $10,000and $25,000. (These costs areusually paid by the targetcompany when funding clos-es.) Diligence in connectionwith an IPO can be signifi-cantly more extensive.

For companies that are thetarget of IP diligence, the bestadvice is “be prepared.” Cleanup any ownership issues

ahead of time. Lock in yourlicenses. File your key patents.

Know the prior art, and befamiliar with the third-partypatents that are most likely tobe problematic. Be able toexplain why you don’tinfringe, or why the patentsare invalid. This type of prepa-ration is comforting toinvestors, builds credibility,can shorten the diligenceprocess and can increase thelikelihood of closing the deal.

Israelsen is managing part-ner of the San Diego office ofKnobbe, Martens, Olson &Bear LLP, and is also an activemember and investor with theSan Diego Tech Coast Angels.He represents companies inthe pharmaceutical, biotech-nology and medical deviceareas, and numerous venturecapital firms in conducting IPdue diligence.

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IP diligenceContinued from Page 1

expand the areas of the spinethat our products treat, toprovide surgeons with prod-uct systems to increase opera-tive levels and to expand clin-ical applications, so we canboth optimize surgeon reten-tion and attract new surgeonsto our product line. For exam-ple, the lumbar-thoracic junc-tion and the thoracic spinebecome an area of evengreater differentiation for usas surgeons expand the lateralXLIF procedure through theMAS platform,” Lukianovsaid.

In addition to broadeningits lines, NuVasive is develop-ing the next generation ofproducts that focus on motionpreservation for the cervicaland lumbar spine. Its leadproduct, NeoDisc, is a cervicalmotion preservation devicedesigned to treat cervical discdegeneration, an ailment thatoccurs when the flexible discsbetween the vertebrae in theneck begin to deteriorate.

Cervical disc degenerationis often treated via spinalfusion surgery whereby the

disc is removed and vertebraelocked together.

NeoDisc offers an alternativeto fusing the vertebrae by allow-ing surgeons to replace thedamaged disc with a technologythat replicates the cushioningand motion characteristics of anintact healthy disc. In doing so,NeoDisc has the potential toalleviate the problems associat-ed with cervical disc degenera-tion while enabling patients tomaintain the range of motion intheir neck.

According to Lukianov,NuVasive expects to completeenrollment in the pivotal trialfor NeoDisc in the first half of2008 and is targeting 2010 forFDA approval.

“It’s a product that can beused earlier in the degenera-tive disc process, before fusionor a total disc replacement. It’svery simple to implant andtotally revisable, which allowssurgeons to simply remove itshould they need to take thenext step to complete fusion.”

Rando is with The RuthGroup.

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NuVasiveContinued from Page 8

Close-up: Ellie Ramos

Woman-owned tech services company provides ‘TLC’ to defense industryBByy EELLIIZZAABBEETTHH MMAALLLLOOYY

The Daily Transcript

On its Web site, TTeecchhnniiccaallLLooggiissttiiccss CCoorrpp.. refers to thecompany by its initials: TLC.

In the world of defense-ori-ented tech services, “tenderloving care” isn’t a phrase thatcomes up too often, but TLC’sfounder and chief executivesaid that’s what sets her com-pany apart.

“We really focus on awork/life balance here,” saidEllie Ramos, who started thecompany more than eightyears ago out of her home. “Wewant people to be with us forthe long haul.”

Located in National City,TLC focuses on four businessareas of technical support:software engineering, processimprovement, command sup-port and logistics. Most of thecompany’s work is currently inengineering, but Ramos saidher main business focus fornext year is to expand TLC’slogistics work. The company ison a path to expand by at least10 percent this year, whichwould actually be a comedownafter expanding 50 percentlast year.

“We’re managing growthbecause I’ve been in compa-nies where the growth hasbeen way too rapid and it’s notbeen managed properly,”Ramos said. “I really think thatwe could have been much larg-er than we are now, but I don’tthink we’d be the company weare today, and I’m exceptional-ly proud of what we are.”

TLC began with just Ramosdoing documentation work forthe military, meaning she con-verted hard copy manuals andother documents into digitalformat so they could be moreeasily updated.

When she and her husbandlooked to start a family, shewanted to establish her ownbusiness that would allow herto work from home. Her hus-band, a former U.S. Marine,played baseball with a team ofSPAWAR employees who toldRamos that the government isrequired to use small business-es and minority-owned busi-nesses for a certain amount ofwork. Since a woman owning atechnology company is rare,she would fit the criteria to fillseveral quotas, giving her aninstant niche market.

After about two years,Ramos began expanding thebusiness. She has a businessbackground, and while doingthe documentation work, shenoticed other opportunities formilitary tech support.

She began hiring employeeswho could fulfill those jobs,and the business kept growingfrom there. She now has 33employees. Last year, her hus-band came to work for thecompany, too.

“I think that where a lot ofbusinesses, especially smallbusinesses, make their mistakeis the technical expert is tryingto run the business,” Ramossaid. “The beauty was that Ihad such an extensive businessbackground, I was able tobring in and hone the rightskill set to plug into the differ-ent opportunities.”

TLC largely operates as asubcontractor now, doing jobsfor larger defense contractorslike CCoommppuutteerr SScciieenncceess CCoorrpp..and more recently SSAAIICC(NYSE: SAI). Ramos said shewould like to get contractswith other government agen-cies like the FBI and DEA.

TLC does some work with

commercial organizations, butRamos prefers governmentwork.

“With the government, allthings being equal, you will getpaid,” she said with a laugh. “Itmay not be in a timely manner,but you will get paid. It’s a dif-ferent set of circumstances asit relates to commercial busi-ness.”

Competition for governmentcontracts is tough. The logis-tics work Ramos is hoping tomove the company toward islargely “sewn up,” she said,with agencies only using asmall pool of companies. ButTLC’s customers tend to behappy with the company’swork.

Ramos attributed last year’s50 percent growth to “organic”contracts — new work fromold customers. So she’s goingto try to make more collabora-tions.

That’s where being a small,woman-owned tech servicescompany can come in handy.

Ramos said she doesn’t liketo get work just because shefits a niche on a governmentquota; she prefers TLC to getwork because it’s the best com-

pany for the job. But sheadmits the company’s uniqueleadership does open doors.

Having a woman at the topmakes TLC different in otherways too, though, Ramos said,and those differences have alsohelped the company to bothget and retain work beyondthe fact that it sometimeshelps fill a quota. She said thatwhile some of her managersthink she’s “too nice,” shethinks the employee-friendlyatmosphere at her companymakes her employees morewilling to go the extra mile andcare about what they do.

“There really is just a differ-ent way of doing business thatis not necessarily male orfemale, but is feminine andmasculine,” she said. “There isjust automatically a little morecompassion or considerationthat tends to come — andthat’s a stereotype of course —but those are certain thingsthat are attributed more tofeminine qualities.”

Ramos said she has veryhigh standards for which shehires, and expects her employ-ees to work hard and with thehighest level of integrity; but

she also doesn’t expect them tostay at the office until mid-night. In return, she stands byher employees. She recalled arecent incident where a cus-tomer thought an employeemade a mistake.

Ramos said she defendedher employee — who hadn’tmade a mistake — so strenu-ously that the client was takenaback.

She said it promotes a cul-ture of mutual respect in theoffice, in which employees feelappreciated and in turn workhard for the company.

Ramos said she’s seen otherbusinesses, generally largercompanies or governmentagencies, that look only at theirnumbers and treat employeessomewhat cavalierly, and that,in her opinion, is what createsslow and disinterestedemployees who don’t do goodwork. The opposite is true ofher own, she said.

“It’s a very different way ofbusiness and we’ve been suc-cessful with it,” said Ramos.“That’s not something we’llnegotiate away.”

eelliizzaabbeetthh..mmaallllooyy@@ssddddtt..ccoommSSoouurrccee CCooddee:: 2200008800332277ccrrhh

Managing the digital chaos: Unleashing the power of SharePointBByy PPAAUULL WWEESSTT

SharePoint360

The “virtual office” lifestyle isnow the norm, with businessconducted on laptops andBlackberries, in airports andbehind the wheel. Employeesare scattered at worksites withcustomers or at remote loca-tions, and in some case, theneed for a physical office spacehas been all but eliminated.

Yet, most organizations donot realize that this new busi-ness reality is costing themtremendous amounts of moneyin lost productivity.

Whether it’s hunting downmissing timesheets, trying toascertain who has the latestversion of a contract or locat-ing a presentation that mighthave been destroyed by a firedemployee on their way out thedoor, this digital chaos is caus-ing people to work harder,instead of smarter.

There has been increasinghype in recent years that thesolution to this technologicalfree-for-all lies in SharePoint,the fastest-growing product inthe history of MMiiccrroossoofftt(Nasdaq: MSFT). This highlyversatile Web-based collabora-tion and document manage-ment platform has promised tochange the very way business isdone through online work-

spaces. In addition to docu-ment and photo managementcapabilities, SharePoint allowsnontechnical users to quicklycreate Web-based worksiteswith anywhere access and real-time collaborative features.

The sites allow users to trackdocument versions, coordinatecalendars, manage tasks, buildworkflows, launch surveys andcommunicate through real-time alert notifications.

It also provides templates forcreating Web 2.0 tools likeblogs and wikis and serves asan effective platform for cus-tom applications.

Unfortunately, as manyusers have discovered, out ofthe box SharePoint requireshighly specialized knowledgeto architect effectively, and it iseasy for organizations withoutthis expertise to find them-selves in over their heads.

Others have simply ruled outthe possibility of centralizingtheir business operations onSharePoint due to financial orstaffing constraints.

A couple of different optionsare available for organizationsthat are consideringSharePoint but do not havespecialized IT professionals onstaff. The first is to work with aMicrosoft-certified consultantto customize a SharePoint plat-

form to meet the needs of theorganization. Once the cus-tomized framework has beenestablished, an in-house portaladministrator can take thelead, unless more extensivecustomer support is desiredfrom a consultant on an ongo-ing basis.

Another option is to choose ahosted SharePoint portal solu-tion. These user-friendly serv-ices involve a small monthlysubscription rate and a set-upfee, which varies by providerand the number of users, stor-age space requirements, etc.

This is becoming an increas-ingly popular route for manysmaller organizations withoutIT departments or for thosethat are simply attracted to theidea of cost-effectively out-sourcing this IT function.

Regardless of the approach,adopting a SharePoint plat-form can have a profoundimpact on an organization.Here are some examples:

GGaaffccoonn IInncc.., a large con-struction management firmwith multiple offices inCalifornia, was experiencingrapid growth, but wanted tomake certain it was able tokeep up the processes that hadbeen so fundamental in its suc-cess. The company was able toeliminate file shares and is now

100 percent SharePoint-based,resulting in a 45 percent reduc-tion in server maintenancecosts the first year. A customtime card monitoring featurewas added allowing for accu-rate, real-time analytics andquickly raised compliancefrom 65 percent to 98 percent,resulting in heightened pro-ductivity and increased rev-enue. Deploying SharePointhas also provided Gafcon witha unique competitive advan-tage in attracting new busi-ness.

Another example is a localcommunity college district,which was awarded a $207million bond measure toimprove and expand its cam-

pus system. A condition of theaward was the formation ofthe Citizens’ Bond OversightCommittee to report the con-struction progress to the pub-lic. The group initially createda basic Web site to relayreports, but it was time-inten-sive to manage and requiredWeb design expertise.

SharePoint was deployed inits place to provide an easy-to-use system for sharing up-to-date reports as well asannouncing public hearings.

The improved informationsharing reduced IT costs andshortened turnaround times.It allowed for flexibility inmanaging content whileimproving communication to

the surrounding community.Organizations that choose to

opt out of SharePoint revolu-tion do so at their own peril.

While currently a “secretweapon” for enterprising firms,it will not be long before itbecomes the business stan-dard. Those who wait will beplaying catch-up for years tocome.

West is a principal and co-founder of San Diego-basedSharePoint360, a Microsoft-certified partner offering bothSharePoint consulting servic-es and hosted solutions. Moreinformation can be found atwww.sharepoint360.com.

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