Medical testing company Plus Diagnostics Inc. has opened a laboratory in Laguna Hills where it plans to hire about 175 people in the next year and a half.
Lakewood, N.J.-based Plus runs specialized diagnostic tests for doctors that help them manage various types of cancer, including prostate, colon, bladder, skin and breast. It plans to add tests for leukemia and lymphoma in September.
Plus opened its Laguna Hills lab with 25 workers and is hiring. Employment should grow to 40 by the third quarter and to 150 to 175 by the end of 2010, said David Pauluzzi, president and chief operating officer.
The company picked Orange County for the area’s “technical expertise” and because it’s a “great place to attract employees,” Pauluzzi said.
The county is home to what Pauluzzi called “some of the leading laboratories in the U.S.”
Those include Madison, N.J.-based Quest Diagnostics Inc.’s Nichols Institute in San Juan Capistrano; US Labs Inc., an Irvine-based unit of Burlington, N.C.-based Laboratory Corp. of America Holdings; and Clarient Inc., an Aliso Viejo provider of cancer testing.
Plus competes with those companies as well as Genoptix Inc., based just across the county line in Carlsbad.
The company also wanted to be here because the region is close to several universities that are involved in cancer diagnostic research, such as the University of California, San Diego, and University of California, Los Angeles, Pauluzzi said.
Overall, Plus has 200 workers and expects to have $60 million in revenue this year, Pauluzzi said.
The company is part of a large market. Cancer treatment costs are estimated at $126 billion annually, and the National Cancer Institute estimates that 10 million Americans have or have had some form of the disease.
Plus’ new lab is in 10,000 square feet of space in a building near Cabot Road and Oso Parkway. The company plans to look for a building with about 25,000 square feet of space within the next 12 to 24 months to accommodate projected growth, according to Pauluzzi.
“The lab that we are operating today is just our starter package, if you will,” he said.
Water Street Healthcare Partners LLC, a Chi-cago-based private equity firm, owns Plus, due to a $50 million equity investment in 2006.
Water Street Healthcare is familiar with OC’s medical device sector. It’s also the majority owner of Alpine Biomed Corp., a Fountain Valley maker of devices for diagnosing acid reflux disease and sleep disorders.
“When I came on board, I worked for the private equity firm and it was always our intention to have a bicoastal laboratory network,” Pauluzzi said.
Plus could look for potential acquisitions or be a buyout target itself.
“And if the market presents itself in a favorable manner, an IPO is also a part of the potential strategy of the company,” Pauluzzi said.
Plus uses its own sales people and works trade shows to sell its tests to urologists and other doctors. The company was at last week’s American Urological Association’s annual meeting in Chicago, where it announced the Laguna Hills laboratory.
Pauluzzi, who joined Plus a year ago, has some roots in the OC diagnostic business. He was involved in establishing US Labs and was a senior executive at Quest, directing its anatomic pathology and hospital businesses.
Doug Berg, Plus’ chief executive, also has roots in some of the major diagnostic laboratory and equipment players. Berg was an executive at Quest and also worked for Dade Behring Hold-ings Inc., which was once run by Scott Garrett, chief executive of Fullerton-based medical testing gear and supply maker Beckman Coulter Inc.
Berg also worked for American Hospital Supply Corp., which nurtured the careers of many OC device bosses.
Pauluzzi also sits on the board of Trans-genomic Inc., an Omaha, Neb.-based biotechnology company.
Plus is an acronym for Pathology Laboratory of the United States and once was known as Lakewood Pathology Associates.
Plus is expanding elsewhere. In August, it plans to start a laboratory in Union, N.J., and is opening a billing office in Daphne, Ala.
