HEALTH WEALTH
It’s Not Real Estate or Tech, But Healthcare’s Made Folks Rich Here
By VITA REED
Healthcare, one of Orange County’s hallmark industries, hasn’t created the spectacular wealth here that real estate and technology have. But it’s made folks here rich just the same.
Perhaps the best example: the late Arnold O. Beckman, the scientist and inventor who founded what’s now Fullerton-based Beckman Coulter Inc.
Beckman, who died in May at the age of 104, donated more than $400 million to advance scientific research and education through the Arnold and Mabel Beckman Foundation.
Beckman and his wife, Mabel Meinzer Beckman, amassed a vast fortune in 1982 when drug giant SmithKline, now part of Glaxo- SmithKline PLC, bought Beckman Instruments Inc., Beckman Coulter’s predecessor, for $1 billion.
That deal came about at the urging of Beck-man’s longtime friend Gavin S. Herbert Jr., who sold Allergan Inc., the Irvine-based drug maker, to SmithKline two years earlier. (Both companies were spun off by the late-1980s.)
Herbert himself made a fortune in healthcare. Now Allergan’s chairman emeritus, he served as Allergan’s chief executive from 1961 to 1991 and as chairman from 1977 to 1994. He owns about 205,000 shares of the company, a stake worth about $15 million at recent check.
But that’s just a portion of Herbert’s wealth, which also derives from Allergan’s 1970 initial public offering and the $260 million sale of the company to SmithKline in 1980. He also owns Roger’s Gardens, the Corona del Mar nursery.
In 1980, Herbert bought La Casa Pacifica, Richard Nixon’s former San Clemente home known as the Western White House. Herbert kept the gardens at La Casa Pacifica for Nixon and was a close friend of the former president.
A home on part of the former Nixon compound is up for sale for $4.25 million. The home is on one of 16 lots created in a subdivision of the compound in the 1980s after Herbert, businessman George Argyros and real estate developer Donald Koll bought the land.
But Herbert has said he has no plans to sell Nixon’s former house.
As with Beckman and Herbert, those who’ve become really wealthy through healthcare tend to be company founders who had big stakes in their businesses.
Another example: Allen Chao, the Anaheim Hills resident and healthcare philanthropist who cofounded Watson Pharmaceuticals Inc., a drug maker in Corona.
Chao holds some 3.6 million shares of Watson, a stake with a market value of $95 million at recent check. He also has options on 1.7 million other shares.
Dr. George Lopez, chief executive of San Clemente-based medical device maker ICU Medical Inc., owns about 5 million shares of the company he founded. That includes shares owned through a trust and by wife Dr. Diana Lopez.
The market value of the shares is $140 million at recent check.
Then there’s Milan Panic, founder of Costa Mesa-based ICN Pharmaceuticals Inc., now Valeant Pharmaceuticals International.
Panic, who was ousted by shareholders in 2002, got an eye-catching $63 million in compensation that year, including a controversial $33 million bonus paid for spinning off part of Ribapharm Inc., which Valeant since has bought back.
Panic, a Serbian immigrant, founded ICN Pharmaceuticals Inc. in the early 1960s.
At the time of his ouster, Panic owned about 1.5 million shares in the company.
When it comes to wealth, there’s a big difference between founding and running a healthcare company.
Executives at OC’s top publicly traded healthcare companies are doing well for themselves. But their fortunes aren’t as dramatic as those amassed by Beckman, Herbert, Lopez or Panic.
David E. I. Pyott, Allergan’s current chief executive, holds around 42,000 shares of Allergan stock, a stake worth about $3 million at recent check. But he’s richeer than that: In 2000, his larger stake had a market value of $60 million.
Over at Irvine heart valve maker Edwards Lifesciences Corp., Chief Executive Michael Mussallem has a stake in the company with a market value of about $2.5 million at recent check. He’s sold about $2 million worth of shares this year and exercised some options.
John Wareham, who runs Beckman Coulter, is of the wealthier health executives in OC based on stock holdings.
His holdings, as recently reported by the company, have a market value of some $60 million, even after a recent dip in Beckman’s shares.
At Cypress-based PacifiCare Health Systems Inc., Chief Executive Howard Phanstiel owns only a small stake of the health insurer, worth about $2.3 million at recent check. He also got a $2 million bonus last year.
