Daily Business Report-June 16, 2016
Carlsbad-based heart rhythm technology company Acutus Medical received $75 million in venture capital funding in the first quarter of 2016, among the largest medical device deals in the U.S. in the quarter.
Venture Capital Funding in San Diego
Drops to $253.5 Million in First Quarter
Venture capital investment in San Diego firms during the first quarter of 2016 dropped to $253.5 million — down 28 percent from the fourth quarter of 2015 and down 32.1 percent from the first quarter of 2015, according to a report from PricewaterhouseCoopers Moneytree and National Venture Capital Association. Deal volume was also down to 21, the fewest since the second quarter 2013.
While investment was down compared to 2015 numbers, it is approximately on par with the quarterly average from 2013 to 2015, the report said. Because quarterly volumes can fluctuate, it is not necessarily cause for concern or indicative of a downward trend.
Medical device investment led all industry types in Q1 with $95 million in VC investment, the most since Q2 2009, which was also the last time it exceeded biotech investment in San Diego. San Diego represented 18.7 percent of all medical device deals in the US in Q1.
Two of the five largest med device deals in the U.S. in Q1 2016 were to San Diego regional companies. Carlsbad-based heart rhythm technology company Acutus Medical, who occupies 46,000 square feet at Research Center Pointe, received $75 million. San Diego-based BioTheranostics, who occupies 30,000 square feet between two buildings at Eastgate Technology Park, received $20 million.
An unusually low volume of biotech deals (6) were done with San Diego biotech companies in Q1, with dollar volume reaching only $85 million. This is 65 percent lower than the quarterly average over 2013 to 2015, which is typically around $140 million.
Health IT continued to permeate the software and IT services industries, though VC investments remain small. Online health care marketplace Doctible received $675,000 in VC. Medsphere Systems and Liquid Grids, who provide IT and marketing platform solutions for the healthcare industry, received a combined $430,000 in VC funding.
Pathway Genomics Corporation raised more than $40 million in Series E corporate financing in January, bringing total investment into the company to more than $130 million. One of the investors was IBM Watson, who will partner to develop mobile health applications that provide personalized health and wellness guidance. Pathway Genomics occupies over 45,000 square feet at The Pavilion at 4755 Nexus Center Drive.
Lytx was acquired for $500 million by Chicago-based private equity firm GTCR in another major PE acquisition. The automobile camera manufacturer and risk management company has more than 400 employees and occupies over 75,000 square feet at 9785 Towne Centre Drive (Ocean Pointe), where the company moved its headquarters in February 2015.
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San Diego to Consider Plan to Abolish
Outright Victories by Candidates in Primaries
By City News Service
San Diego voters could decide this fall on a proposal to do away with outright victories by candidates who win a majority of votes in primary elections.
The proposal by the Independent Voter Project would send the top two vote-getters to the November general election no matter what percentage they receive.
It was referred to the City Attorney’s Office for further study on a 3-2 vote of the City Council’s Rules Committee Wednesday. Findings will be presented to the full City Council, perhaps next month.
Since it would amend the city charter — San Diego’s primary governing document — the procedural change would have to be made by the public in the November general election.
Jeff Marston of the Independent Voter Project said the system in which candidates who win at least 50 percent plus one vote don’t have to move on to the general election was adopted by the city in 1989.
“The problem with this, as described to me by virtually every elections- related person I’ve spoken with, is that voter turnout in the general election is usually at least double that of the primary, and among minority groups and young people ages 18 to 24, the difference might be 3-to-1 or 5-to- 1,” Marston said. “Our bottom line is pretty simple and straightforward — that candidates running for office should be elected when the most people vote, not the fewest.”
Joe LaCava, former chairman of the San Diego Community Planners Committee, said residents who aren’t political insiders think the primary election means “preliminary,” without realizing that it could be final if a candidate receives more than half the vote.
In last week’s primary election, Mayor Kevin Faulconer and Councilmen Mark Kersey and Scott Sherman were re-elected, and Councilman-elect Chris Ward won a race for an open seat. None of them will have to run again in November.
Councilman Mark Kersey, who along with colleague Chris Cate cast the dissenting committee votes, said the plan will make elections more expensive.
“I have never met a voter who thought campaigns should go longer — ever,” Kersey said. “I have never met a voter who said would you please put more mail in my mailbox, more ads on my television or come knock on my door more times — ever. In fact, what I have (heard) is the opposite, voters who are quite happy that the city elections are done in June so that we’ll not turn around and be bothering them again in November alongside the congressional, and presidential and state candidates.”
Council President Sherri Lightner said races for which there are just one or two candidates could go straight to a November vote, bypassing the primary election.
The IVP suggestion was among more than a dozen ballot measures proposed to the committee by the public.
Only one other was passed along to the City Attorney for review. The proposal by the nonprofit Alliance San Diego would align local laws with state laws to maximize voter participation in elections.
Small Business Opportunities for
Airport Parking Plaza Construction
Small Businesses who want to get a share of the more than $20 million that will be spent on construction of a new parking plaza in front of Terminal 2 at Lindbergh Field are invited to a June 22 informational event at the Jacobs Center, 404 Euclid Ave., San Diego 92114.
San Diego International Airport is hosting the awareness event to promote the upcoming Terminal 2 Parking Plaza construction and connect contractors, vendors and suppliers with Swinerton Builders and the Airport Authority’s Small Business team.
The event, scheduled from 9 a.m. to noon, will include information about the Parking Plaza, as well as informative workshops on procurement, bonding and prequalification. To register, visit www.SwinertonT2PP.com/events.
Construction is scheduled to get under way in late summer on a new Parking Plaza, which will have three floors and include approximately 3,000 parking stalls, a net increase of 1,800 parking stalls. It will integrate state-of-the-art parking technology to enhance customer service such as smart parking technology that will allow parkers to reserve spaces and pay before leaving, reducing circulating and idling times.
Keeping Business in San Diego:
An Urban Land Institute Luncheon
The Urban Land Institute San Diego-Tijuana District Council will present
“Keeping Business in San Diego” on June 30 – a discussion on the collaborative effort of the City of San Diego and commercial real estate professionals to keep companies in San Diego and help companies create spaces for innovation.
The public is invited to the lunch event, which will take place a 11;30 a.m. at iboss Cybersecurity located at 4110 Campus Point Court, San Diego.
Panelists will discuss what it took to secure and build out the cutting-edge space, and how a company of this size and in this industry is impacting the local economy, retaining graduates from local universities, and enriching San Diego’s technology profile. Panelists include:
• Darrel Fullbright, principal, Gensler
• Mike Giffin, president, B&G Consultants
• Peter Martini, president, iboss Cybersecurity
• Chris Pascale, vice president, CBRE
• Jim Roherty, president, Pacific Building Group
• Kristin Tillquist, director of state government affairs and innovation policy, city of San Diego
Tickets for the program with lunch are $35 for ULI members and $50 for nonmembers. Registration after Monday, June 27 will be handled at the door with an additional $10 fee.
For more information or to register, click here.
Arena Pharmaceuticals Names CFO
San Diego-based Arena Pharmaceuticals Inc. announced the appointment of Kevin R. Lind as executive vice president and chief financial officer.
Lind joins Arena with over 15 years of experience in health care banking and private equity. Prior to Arena, he was at TPG, most recently as a principal at TPG Special Situations Partners and initially at TPG-Axon’s Pharma Partners group.
Lind started his career in various capacities as a health care investment banker at Lehman Brothers Inc. Mr. Lind received a B.S. from Stanford University in biological sciences and an M.B.A. from UCLA Anderson School of Management.
Sweetwater Authority Gets $3.7M
Grant to Improve Desalination
The Sweetwater Authority has received a $3.7 million grant from the Department of the Interior to increase the desalination capabilities of the Richard A. Reynolds Desalination Facility.
The water produced by the facility provides drinking water to residents of Bonita, Chula Vista and National City. The city of San Diego is partnering with the Sweetwater Authority in the expansion and will receive half of the water produced.
“This funding will provide some much needed relief from the drought conditions we have been experiencing in California,” said Rep. Susan Davis (D-San Diego). “Increasing sources of reliable drinking water and our region’s water independence must be a priority. California is in the grips of a historic drought and improving our water infrastructure will be key to surviving this drought and any future water shortages.”
Davis said she worked with local leaders to bring over $5 million federal grant money for Sweetwater’s expansion effort. This year’s funding will allow the Authority to continue the project, which will increase the desalination capabilities facility from 3,600 acre-feet per year of water to 8,000 acre-feet per year.
Autism Speaks Appoints
Manager Of Field Development
Autism Speaks, an autism science and advocacy organization, announced the appointment of Larissa Kerstetter to the newly created position of manager of field development for Southern California, overseeing activities in San Diego.
Kerstetter’s responsibilities will include overseeing Autism Speaks Walk San Diego, the largest San Diego grassroots walk for autism (held Oct.1), as well as other community events in the Greater San Diego area. A kickoff event, a meetup for families participating in the walk, will be held Aug. 4 at 6:30 p.m. at Dave and Busters, 2931 Camino Del Rio North. To RSVP, email SanDiego@AutismSpeaks.org or call (323) 549-0500.
Kerstetter’s previous position was as development director for the ALS Association’s Greater San Diego chapter. She left successful corporate positions in the telecom and tech industries when her son — who was diagnosed with Pervasive Developmental Disorder (PDD) — was being mainstreamed from special ed to general ed.
Other new appointments include Christina-Marie Drake, who will join San Diego’s Walk Committee as co-chair.
Best Best & Krieger Names
Office Managing Partner
Best Best & Krieger LLP has appointed James Gilpin to serve as office managing partner of the San Diego office. Gilpin will oversee general operations and business development for the office.
The San Diego office has 32 attorneys practicing in various areas of public and private sector law.
Gilpin helped open the BB&K’s San Diego office in 1993 and previously served as the local office managing partner from 1999–2002. He served on the firm’s Executive Committee from 2001-2012.
The lawyers in BB&K’s San Diego office practice in a wide range of areas, including environmental, municipal, business and labor and employment law. Gilpin’s practice focuses on helping public agencies in connection with complex litigation arising from the construction of projects and public contracts. He also serves as general counsel to the Rancho California Water District.
