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Friday, Mar 29, 2024

Venture Capital No Problem for Biotech Leaders

Valley biotech executives shared their insights and challenges at the Corporate Leaders Breakfast organized by California Lutheran University, held at the Ronald Reagan Presidential Library in Simi Valley on Sept 15. The panel participants were James Treanor, chief executive of ADRx Inc.; Frank Watanabe, chief operating officer of Kanan Therapeutics Inc.; and Hai Yan, chief executive of REMD Biotherapeutics. All three companies are headquartered in the Valley region, at Thousand Oaks, Westlake Village and Camarillo, respectively. On funding strategies, Watanabe and Treanor agreed that while most venture capitalists are in the San Francisco area, funding has proven accessible for their businesses. Yan on the other hand was critical of venture capital funding, citing constant pressure to provide the timeline of return on investments. “Biotech companies are science based, and sometimes you have to follow the science not the venture capitalists’ demands,” said Yan. “So, we did not take any VC money. Our private investors leave us alone and we are very happy.” Amgen Inc. was frequently mentioned by the panelists, as most agreed that the Thousand Oaks biotech giant is a central source for talent and innovative technologies that can be licensed to smaller firms. “It’s difficult to imagine from the outside that programs (at Amgen) end up sitting on the shelf,” said Treanor “Amgen is taking the right steps to license the technologies.” Treanor added that as Amgen downsized its research facilities, the company’s retired equipment has become an invaluable resource for startups. As for the Valley’s talent pool, while there is an obvious need for scientists and engineers, the panelists stressed the importance of a well-rounded workforce, citing a need for people in accounting, law and communications. “All of those skills are equally important as companies start to grow,” said Watanabe. “Having schools that are turning out experienced graduates with a wide variety of skillset is needed.” Hix Me Hixme Inc., an insurance platform provider in Agoura Hills has launched a health cost simulation tool that allows a customized insurance plan for each employee. The program, called “Bundle Me,” calculates and suggests different “bundled” plans for each employee to choose from. The bundle may include a different policy for each of the employee’s family members. Denny Weinberg, chief executive of Hixme, said it’s the only platform on the market today that allows this sort of customization down to a family level. “There are plenty of platforms that help analyze someone’s needs,” he said. “But in almost every case, a family has to choose a single plan.” A single plan may lead to over-insuring, forcing employees to pay unnecessary costs, said Weinberg. Bundle Me is an extension of Hixme’s data platform which is revamping the traditional employee benefits models to more of a direct-to-consumer model. The company has established a private insurance market with over 3,000 plans from providers such as Kaiser Permanente, Cigna Corp. and Health Net Inc. Funding Shortage? Community health care providers in the Valley region could face significant budget cuts as the federal funding cycle expired on Sept. 30. In the Valley region, there are four community centers. The centers are mostly funded by grants from the federal government as well as state sources. The Valley Community Healthcare in North Hollywood serves about 26,000 patients in the Los Angeles region. In 2015 the nonprofit center opened its second location in North Hills to serve newly insured patients as a result of the Affordable Care Act. “We got federal grants every year since the 1970s,” said Judi Rose, vice president at VCH. “It’s an unrestricted funding that we depend on every year.” Community health centers typically provide low cost care to very low-income families and serve those who are ineligible for insurance. At press time, the federal budget had removed 70 percent of the funding for community health centers across the country, leaving Valley Community Healthcare at risk of losing about 20 percent of its budget. However, some members of Congress were working to restore the funding. The loss would affect about 6,000 patients, according to Rose. “Clean and easy way would be for us to cut the people,” Rose said. “But there isn’t a specific contingency plan in place yet.” Rose added the drastic cuts in funding will impact health providers as well as patients. Community health centers depend on the Public Service Loan Forgiveness program, which gives health care providers who work at community centers some relief from student loans. It’s a way to stay competitive when hiring compared with private health care providers, Rose said. The program will be cut as the current budget proposal stands. Staff Reporter Iris Lee can be reached at (818) 316-3130 or [email protected].

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