The Bill Otterson Biotech Letter March 15, 1993 Number 3-11

THE BILL OTTERSON BIOTECH LETTER MARCH 15, 1993 NUMBER 3-11

ANNIVERSARY 1. An anniversary of questionable import to many (other than this reporter) will pass without mention no longer. The first "BILL OTTERSON BIOTECH LETTER" was dated March 1, 1992, making this the first anniversary. Is it valuable? Should it continue? It is now FAXed every Monday night to about 130 biomedical CEO's, elected officials, and other persons interested in this industry. FAX in yr ur comments, suggestions to 619-552-0649. Anonymous comments will be accepted and treated with reverence. GOVERNOR PETE WILSON AT BIC/BIOCOH

I 2. Governor Pete Wilson delighted his audience of 250 at the joint Biomedical Industry Council (BIC) and Biocommerce Association (BIOCOM) meeting, at which he described his package of job-creating measures for California business. Previously described in his "State of the State" address, measures include tax relief in the form of a small business investment tax credit, continued investment tax credit, a return to the Net Operating Loss Carry-forward provision, and a reduction of "self-inflicted wounds" in the form of excessive regulation. He wants to reform the "fraud-ridden Workers Compensation Insurance program. Finally, he received an ovation when he said he was "personally determined" to open Ward Valley for disposal of Low-Level radioactive waste "as soon as possible" . Additionally, he talked about Long range solutions to the water problem for the cities and industry, citing his successful "water bank" Last year that showed farmers had as much as 900,000 acre-feet of water they were willing to sell on the open market. He favors NAFTA for California, and recommends keeping the pressure on Legislators to ensure passage. In a question and answer session, he cited the UNOCAL experiment in buying "clunkers" as a better way than the Trip Reduction Plan to meet California Clean Air Act requirements, adding that additional modifications may be necessary in the Act to avoid unnecessary penalties on businesses. Joining BIC and BIOCOM executives at the head table were Deputy Mayor To. Behr, San Diego City Councilman Ron Roberts, and San Diego County Supervisor Pam Slater. A LQW-LEVEL RADIOACTIVE WASTE DISPOSAL SITE 3. Dr. Helen Ranney, former Chief of Medicine, UCSD Medical School, presented the findings of the' Science Advisory Board to the San Diego County Board of Supervisors at their meeting Tuesday . The Science Advisory Board is made up of credentialed scientists from UCSD, SDSU, and industry. It evaluated the need of the medical industry for the use of radionuclides in research, the requirements for a safe disposal site for waste, and the claims of anti-nuclear activists that the Ward Valley site might poison the Colorado River. The Board gave the Ward Valley proposal its overwhelming approval, noting that jobs in the growing biomedical industry were dependent upon prompt approval of the pending License. 4. Still concerned that Governor Pete Wilson and other Legislators do not appreciate the threat that the proposed adjudicatory hearings pose to the Licensing of a waste site, Bill Otterson has I requested a meeting with the Governor to describe the disastrous outcome of similar hearings ~ t UCLA in the 1980's, and in Illinois. 5. Medical researchers in Arizona (a fellow member of the Southwestern Pact depending upon the Licensing of Ward Valley), have been alerted to the threats of the eventual Licensing of a waste site in California. Dr. Sidney Sal.an, Director, Arizona Cancer Center, has indicated his concern about waste piling up at his facility in Tucson and has offered to intercede with the U.S . Department of Interior regarding the transfer of the Land to the California Department of Health Services. Secretary of Interior Bruce Babbitt, while Governor of Arizona, helped Dr . Salmon with the organization and building of the Cancer Center . CLEAN AIR ACT - TRIP REDUCTION PLANS 6. At the invitation of Jack McRosky, Chair.an of Republic Tool and sub-committee chairman on Larry Lawrence's prestigious San Diego County Econo.ic Development Policy Board, CONNECT Cha~ion Terry Bibbens testi fied to the County Board of Supervisors that proposed Trip Reduction Plans would cost San Diego businesses $73 million a year, and would, if completely successful, reduce smog by ONLY 1 percent! Bibbens also presented the Chamber of Commerce/CONNECT position to SANDAG that High Occupancy Vehicle (HOV) lanes were necessary, even if they would only reduce smog marginally, because they would pave the way in the future to other, high-tech solutions. SANDAG has committed staffer Lee Hultgren, Director of Transportation, to work wi th Chri~Neils and Andrea Korogi of the Chamber and Bibbens to develop a realistic proposal before the next ~ eting of the California Air Quality Board in early April. HAZARDOUS MATERIAL BUFFER ZONE - REQUEST FOR CEDKET VIOLATION DETAILS 7. The City Managers' report on the proposed Hazardous Material Buffer Zone (HMBZ) will be discussed at the Committee on Transportation and Land Use, chaired by Councilman Ron Roberts, at a hearing on Karch 17 at 10:00 a• in the County Adm i nistration Building on the 12th floor. Councilman Roberts will report that the "15-month process has uncovered no proof of health hazards when businesses are operated in accordance with the Law . " In lieu of additional regulations, the study recommends stepping up enforcement of existing controls. Although the original study was limited to the Barrio Logan area, and the study found the medical industry was suffi ciently regulated, BIC, BIOCOM , and the High-Tech Council (HTC) all oppose HMBZ, fearing that, once passed, it would inevi tably be expanded city- and industry-wide. Bill Otterson has assured Councilman Roberts that at Least five executives from these groups will attend this meet i ng t o show support for his recommendation. [ BIOMEDICAL COMPANY FINANCING 8. Eli Lilly & Co . Lobbyist Mel Wood showed his corporate presentati on to CONNECT this week . In the face of increasing anti, business regulations in California, Lilly and other major pharmaceutical manufacturers have determined to Let elected officials hear their story. Lilly's concerns include pharmaceut i cal pricing,' anti-science resistance to bovine somatropine (to increase cows' production of milk) , worker's compensation reform, enforced Labelling of genetically engineered foods, a disposal site for Low-Level radioactive waste, and unfair and untrue stories of gouging by the pharmaceutical industry. The presentation clearly shows the value to society of new drugs, the reduced hospital costs resulting from the use of these drugs, and the costs and risks of bringing these drugs to market. (This twenty-minute slide presentation would make an excellent topic for a BIOCOM meeting!) NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) 9. san Diego County Supervisor Pa• Slater proposes to create a County Task Force to create International Trade and Business Zones to capitalize on export trade, including border trade and commerce routes . Supervisor Slater has asked San Diego Dialogue Director Chuck Nathanson, High-Tech Council President Larry Epp, and CONNECT Champion Terry Bibbens to serve on the Task Force . The cities of San Diego and Chula Vista are both planning "cross-border" activities to help business take advantage of the new feeling of cooperati on between the U.S. and Me xico. 10. San Diego Dialogue brought Tijuana Mayor Hector Osuna Jaime and several of his staff to its Saturday seminar. Speaking off-the-record, Mayor Osuna expressed Tijuana's support for NAFTA and its interest in cooperating with San Diego in regional development . He and San Diego Mayor Susan Golding have had several meetings in this regard. The Mayor and his staff are yet another example of the richness of talent available in Tijuana to help this region become a major player in the Pac i fic Rim game.

\ 11 . The Institute of the Americas at UCSD will host a series of seminars on _NAFTA and its expected impact on California. The first seminar, scheduled for April 1st, at 8:00 a•, at the Downtown Harriott, will feature Aebassador Jules Katz, former chief negotiator of the NAFTA agreement, and Dr. Fred Cannon, Chief Econo.ist, Bank of America. Call Colleen Horton, Vice-President, at 453~5560 for information and regi stration. THE ECONOMY 12. Project facilitator David Nuffer, Chairman of the Greater San Diego Chamber of Commerce , has called his first meeting of Project 2003, a program to establish a vi sion by the business community~~ what San Diego could Look Like in the early 21st Century . Mayor Susan Golding and Chairman of the ~n Diego County Board of Supervisors Brian Bilbray are sponsoring the effort. Biotech/High-tech participants include David Hale, Gensia; Don Gri .., Hybritech; Bob Lichter, John Burnha• & Co.; Larry Epp, American Electronics Association; Dan Pegg, Econo.ic Devel~t Corporation; Gil Partida, Chamber of Com.erce; Chuck Nathanson, San Diego Dialogue; ana Bill Otterson, CONNECT _ I 13 . san Diego City Kayor Susan Golding will presented her "Economic Development Act ion Plan" to the Council Monday. At "pre'ss time", it was expected that the plan, which was Largely spelled out in her Inauguration speech, and which is supported by the high-tech community, will be accepted. OTHER

14. As part of High-Tech Week, the newly-formed High-Tech Council, headed by Larry EppL held_its first high-tech summit March 11, at the San Diego Convention Center. Panel moderator Richard Sulpizio, Senior Vice-President and COO of Qualcomm, which now has 800 employees in San Diego, (having added 232 in the past fourteen months,) said he was just closing the purchase of the Lusk Design Center, which will become Qualcomm ' s headquarters and corporate park. (Qualcomm may be San Diego's fastest growing Large company). Panelists included Joel Schindall, Division President, Loral Conic, a defense contractor; Peter savage, President, Applied Digital Access; John Belden, President, OCTuS; Dave Flowers, President, Pulse Enginee~ng (3000 employees world-w ide and 165 headquarters people in San Diego); Terry Rickard, President, Orintech (a defense conversion spinout from Orincon); Gloria Ka, founder, XXSYS, and Larry Epp, President, Laresis Corporation . State Asse.blywo.an Oede Alpert, (Bill Otterson's sponsor at the California Economic Summit), spoke of the state's new-found interest in job creation as exemplified i n ~be Assembly Democrats Economic Progress Team Report (ADEPT). San Diego County Supervisor Pam Slater reiterated the county's need for increased jobs; San Diego City Council.an Ron Roberts praised the group for forming a high-tech equivalent of the biotech industry's BIC and BIOCOM, and cautioned the CEO's on the need to keep elected officials accountable. San Diego City Councilwoman Abbe Wolfsheimer cited her efforts, to open the City's SR Zones for research and related manufacturing, her opposition to the proposed HMBZ Ordinance, and her support for cutting federal mandates for Clean Air and Clean Water that miss the specific needs of regions Like San Diego . Vincent Kall, Area Representative for Congress.an Bob Filner, discussed the availability of funds for economic conversion, retraining of workers, and retooling of plants. City Councilwoman Valerie Stallings is "carrying the City's water (sewer water)" in its dispute with the U.S. Environmental Protection Agency regarding the need for this region to spend billions of dollars on unneeded secondary treatment of sewer water. Other elected officials in attendance or represented by staff included Congressaan Duncan Hunter and State Asse.blyaan Kike Gotch. UPCOIHNG

15 . The International Forum for Corporate Directors (IFCD) will present a program : "Establishing and Growing a Board at QUALCOMM", with Dr. Irwin Jacobs, Ph.D., Chairaan' & CEO, on Thursday, March. 18, at the La Jolla Mariott ' from 5:30 to 7:30p. m. Call IFCD at 597-4718.

16 . CONNECT's Meet the Rese'a rchers: " Advances in Computing" breakfast/ Lecture wilL be this Friday, Karch 19 at 7:30a•. at the Supercomputer Center at UCSD. Douglas Whiting, co-founder and Vice President of Technology at Stac Electronics, and Frank Talke, Professor in the Department of Applied Mechanics and Engineering Sciences, wiLL be speaking on "Mass Storage and Increas·ing Storage Capacity." Call 534-6114 to register.

17. CONNECT is offering a new, one-time course on communications technology and the changing Landscape of that industry in "Core Technologies and Business Strategies:Issues Affecting the Growing Communications Company." The one-day seminar, taught by some of the most prominent executives t n the Local communications industry, will offer an understanding of the major issues facing the industry as well as CEO's visions for the future in this exciting industry. The program will be held Tuesday, Karch 23, 7:30 a•- 5 pm at the La Jolla Marriott . Please call 534-4750 to register and receive the advance reading materials. Well over one hundred people have registered to date. 18. CONNECT Sponsors Ferris & Britton and Knobbe, Martens, Olson & Bear and the UCSD Center for Molecular Genetics are co-sponsoring the Ninth Annual California Biotechnology Conference, "Biotechnology '93: A GLOBAL PERSPECTIVE " . Bob Bohrer, Director, Biotechnology Progra•s, UCSD Center for Molecular Genetics, and conference chair, has brought together national and international speakers, including Or. Henry Killer, Director Biotechnology, FDA; ~C- Cartwright, Superintending Pharaacist, Medicine Controls Authority, UK; Or . Donald Kirksey, Director, Corporate Development, Glaxo, Inc.; and others. Luncheon speaker will be Dr. Frank Young, Deputy Assistant Secretary for Health, Science and the Environment, U.S. Dept. of Health and Human Services.

3 The following comments are the opinions of the author and do not necessarily reflect the opinions of the University, of CONNECT or of CONNECT Sponsors and Members. Bill's Editorial March 15, 1993 headquarters in San Diego, employs one millionI THE VISION THING people worldwide. And two other wireless companies are listed among the industry's giants. Come with me, if you will, to t~e end of the third Telephone systems throughout the world prouttly year of the 21st century. bear the emblem, "Made in San Diego-Tijuana". No self-respecting executive is without his or her The Chargers are touted as the 'team to beat in the personal digital assistant to keep in contact, Super Bowl. The San Diego Opera has just announced anywhere in the world, and it, too, says, "Made in its season will be increased to ten operas for the San Diego-Tijuana." coming year. The Symphony is out of debt. And San Diego is widely acknowledged as truly the first Other high-tech industries, including software, bi-national American city on the Pacific Rim. computer peripherals, and semiconductors have Tijuana-San Diego is now a metropolis of five shown that San Diego is hospitable to emerging million people, and we are the eighth largest companies. Using techniques learned at UCSD's metropolitan trading area of the U.S .. Our soon Advanced Manufacturing Institute, these companies to-open international airport is the dream of combine San Diego's intellectual capital with every other city in the country. It will have Tijuana's production capabilities and advanced direct flights on a daily basis to Mexico City, tooling to make this region the envy of America in Bogota, Tokyo, Peking, and Singapore. productivity and output per man hour . San Diegans use the airport for both business and The region surpassed the federal air quality personal travel. Our service industry is known standards again this year for the fourth straight throughout Latin America as knowledgeable and year, thanks to the reformulated gasolines and simpatico with the Latin market. Companies more efficient autp@obile engines that have come throughout the U.S. seek our service providers for into existence in the past six years. Despite the their dealings with South America. Many of our increased miles driven, highway congestion was manufacturing companies ship more goods to the down, as more and more business commuters either South than they ever did to Europe. The "American worked at home via fiber optics or commuted ~ n Market", a trading bloc stretching from Prudoe Bay smaller, electronically controlled vehicles, using to the Tierra Del Fuego, exceeds the moribund the new "electronic Lanes" replacing the old High European Community in Gross Regional Product. The Occupancy Vehicle (HOV) Lanes on our freeways. North American Free Trade Agreement, now expanded These innovations were pioneered by leading San to include all of South America, was the key that, Diego-based companies that we knew in the in 1994, opened the eyes of our people - early '90s. particularly our young people - to the opportunities and beauty of the "rest of America". Like it? Sure, we do. So how- did we get there? Starting with their Maquiladoras, first Japanese Well, it all started back in 1993. companies and then other Asian companies set up manufacturing in the Tijuana-San Diego region and We did two things. First, we got all the eli cted now ship throughout both North and South America. officials, university officials, service Our young Asian population, at home in both providers, and high-tech CEO's focused on the cultures, has done in Asia what the Hispanic above objectives. Really focused. We got a~L of American population did for us in South America, our educational institutions concentrating on.· how and the trade with the Orient, through our new we could help our companies, both in the service container port, is large and profitable. Our and manufacturing sectors, become world-class in children are also multi-Lingual, being required in their industries so they could serve not only San their schools to learn one South American and one Diego but the world. Asian language to compete in the new economy. Technical skills are also taught, beginning in Secondly, we went out to the other communities and Kindergarten. made them a part of the Vision. We asked the environmentalists what they wanted to see, what We have two pharmaceutical companies that promise their objectives were, and we incorporated them. to become billion dollar companies, and five As above, we changed our viewpoint to see the __ others that are entering the ranks of the Fortune minority populations as part of the solution, not 1000. There are now almost fifty thousand people part of the problem. We included everyone, even employed in this industry, including many those who didn't completely trust our intentions suppliers who have opened factories here to supply at first. the Local industry. ALL five of the leading investment banking organizations have opened We set up Science Advisory Committees that helped offices here to serve this new industry. Perhaps us differentiate between "good ideas" and "sound, even more importantly, several San Diego high technical" ideas. They were also the first to tech companies routinely make the Inc. 500 List of refute "junk scien_ce," which distracted so many the fastest growing companies in America, other communities.r we were the first in the supporting the view we had back in the 90's that country to learn how to rationalize the demands of high-tech would be the future of this nation, and environmentalists with the demands of job seekers. that San Diego knew how to create an environment And we became the paradigm for other cities. In in which these companies could thrive. fact, more, and more, the federal government , came to San Diego for solutions, not with unfunded The wireless communication industry, with mandates.

4 Of course, there were some problems we couldn ' t fix; there always will be. But we are still working on those. And we'll fix them, too. Because we're San Diego-Tijuana, and we know how!