OC Healthcare Startups See Modestly Higher Cash Infusions
UCI Gets Devices to Treat Heart Attacks; Exec Takes Pharmacy Board Presidency
HEALTHCARE by Vita Reed
Venture capital investment in Orange County-based healthcare startups is slightly up through the second quarter this year.
A survey by Ernst & Young LLP and VentureOne Corp. says 10 healthcare deals closed in OC in the first half of the year for $130.5 million. There were 15 healthcare fundings during the same period last year, but the amount was smaller at $122.5 million.
The fundings break down like this: Five medical device deals for $70.9 million; one healthcare service funding for $15.4 million; a medical information system investment for $4.5 million and a biopharmaceutical deal for $4.2 million.
Venture investors aren’t looking for the get-rich-quick deal.
“Venture capitalists are realizing the long-term nature of healthcare investment,” said Don Williams, a San Diego-based Ernst & Young partner who leads the firm’s Southwest venture capital advisory group. “The time period to a liquidity event,an IPO or acquisition,is much longer.
“With a technology company, you’re looking at two to four years to a liquidity event. With health sciences, it’s a four- to 10-year time frame.”
Food and Drug Administration rules and clinical trials are factors for the longer time frame, he said.
The study found that venture capital investors overall are choosing to drop their money on healthcare companies, as opposed to technology startups.
In Southern California, which includes Orange, Los Angeles and San Diego counties, the survey found $302 million in healthcare investments in the second quarter, up 7% from the first quarter.
By contrast, technology startup companies in the region received 36% less funding at $255 million in the second quarter.
Stock market “gloom” has investors shying away from the telecommunications and software sectors and is “dramatically affecting the capital allocated to information technology ventures,” said John Gabbert, VentureOne’s vice president of worldwide research, in a release.
Some of the county’s biggest healthcare fundings in the quarter included Irvine-based eye device maker IntraLase Corp., which received $24 million according to Ernst & Young and Laguna Hills-based healthcare services company Cogent Healthcare Inc., with $15 million. Other notables were San Juan Capistrano-based Vascular Control Systems Inc., which took in $5.4 million and Laguna Niguel-based drug maker Novalar Pharmaceuticals Inc., which received a $5 million infusion.
UCI Defibrillators
University of California, Irvine, has joined the growing list of public places that have defibrillation machines to treat people with cardiac arrest. University officials said that 11 defibrillators have been installed at the campus.
Defibrillators are laptop computer-sized devices that deliver electric shocks to people having heart attacks.
Irvine-based medical device maker Cardiac Science Inc. provided the defibrillators to UCI, which will tap faculty in its College of Medicine to oversee the defibrillator program. UCI also will help train university students and workers to use the machines.
How do the life-saving devices work?
“The machines automatically search for abnormal heart rhythms in the patient,” said Ruth Bundy, occupational health manager in UCI’s environmental health and safety office. “If it doesn’t find any, the defibrillator won’t deliver a shock.” And they won’t accidentally shock the rescuer, she noted.
Earlier this year, Cardiac Science Chief Executive Raymond Cohen said the market for public access defibrillation was growing based on both public awareness and legislative action. Shopping malls and casinos are popular public places that have defibrillators.
Pharmacy Appointment
John Jones, an official of Costa Mesa-based Prescription Solutions, is the new president of the California State Board of Pharmacy.
Jones, who’s been affiliated with the regulatory board since 1998, is vice president of legal and regulatory affairs at Prescription Solutions. Prescription Solutions is a unit of Santa Ana-based PacifiCare Health Systems Inc.
Jones, who holds degrees from Idaho State University and the University of San Francisco, joined Prescription Solutions in 1994, after serving as Blue Shield of California’s director of pharmacy.
The state pharmacy board is made up of 11 members, seven of whom are associated with the pharmacy profession. It regulates all businesses and firms that handle, ship, store or dispense medications and medical devices in California. Board members don’t receive salaries and don’t require confirmation by the state Senate.
PacifiCare Launches New Unit
PacifiCare Behavioral Health, Laguna Hills, has established a health plan division and introduced a new product, Life Strategies. PacifiCare Behavioral is a unit of PacifiCare Health Systems.
Life Strategies offers care management tools that other health plans can license, as well as “carve-out” plans for behavioral healthcare issues.
Carve-out plans come under separate contracts from an employer’s standard healthcare service plan.
Dr. Steve Rockowitz is the new division’s top official, serving as director of sales and service. Rockowitz, a psychologist, was previously PacifiCare Behavioral’s Western region director of clinical operations.
Bits and Pieces:
Irvine-based Emergency Medical Technology Inc. said it received Food and Drug Administration clearance to market its CPAPos emergency transport system. The device treats acute cardiogenic pulmonary edema associated with congestive heart failure. The company designs, develops, manufactures and sells emergency respiratory medical devices for use in hospital emergency department care and pre-hospital ambulance services.
