Sioreci-I Letr£; · Aug~St ·31;]993

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rim ri:ru:~ 6rr£Rso:N >:sioreci-I LETr£; · Aug~st ·31;]993. >. NUMBER 3 ~ 3.5 ..

THE ECONOMY

l. It was difficult to miss the headline, "County jobless rate: 9.2%" emblazoned across the front page of last Saturday's San Diego Union-Tribune, but the increase from the April figure of 6.9 percent was a bit obscured in the accompanying graph. "It is cert~y an indicatio Diego's economy is still experiencing significant difficulty," the pape~ qtwted Mgf-~~~rf' the Greater San Diego Chamber of Commerce. as-.say in g..... Because the percentage is made up of both jobless numbers and workers available for employment, both he and University of San Diego economist Alan Gin predict that the rate will fall some before the end of the year. But the economy remains the number one issue in San Diego.

NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)

2. According to most observers, NAFT 1J ~ in serious difficulty ~ the third ranking Democrat in the House, Rep. David Bonior, D-~ openly fighting ~* President on national TV. Bonior's position, the position of orgamzed labor, is unequivocal opposition. Senate Republican leader, Robert Dole, R-Ka.p: hinks he can get support in the Senate and suggests that the issue be brought up in that bod first. Robert Matsui, D-Sacramento, a supporter points to the 200,000 new jobs to be created in the U.S. as a result of lower tariffs on U.S. products in Mexico, as a result of the pact. According to the Greater San Diego Chamber of Commerce, San Diego should be a great beneficiary of NAFTA, as trade between to the two nations increases.

WARD VALLEY

3. The California State Supreme Court ruled that state senators excee wir constitutional authority when they made a deal with Govemo Pe Wilson which required him to hold adjudicatory hearings on the Ward Valley I.,B' tsp~ ai s"ite. This lets stand a California Court of Appeal Third Appellate District ruling which stated that Department of Health Services (DHS) must proceed without regard to the illegally coerced "agreement" for adjudicatory hearings by the Senate Rules Committee.

The Supreme ~ urt decision will not affect the request made by Secretary of the Interior Bruce Babbitt's request that Governor Wilson hold hearings before Interior transfers the federal lands to California. Governor Wilson has not yet responded to Interior Secretary Babbitt's Letter.

4. Keith Boesky, President, National Association of Cancer Patients (NA CP), sent a letter to members of the State and Federal legislature to alert them of the anti-Ward Valley billboard unveiled last week in Hollywood. Boesky refers to the billboard, which depicts a mutated and deforn1ed couple, as the " .. .latest inflammatory act by project opponents." Boesky concludes

1 by stating, "The Ward Valley project must proceed based on science, not the politics of fear and irrationality."

JOINT HOUSE RESOLUTION 111

"National Biome

Bert Watson, President of W a/son & Company, fon~ legislative Aide to Congressman Bill Lowry and CONNECT volunteer, reports that 218 co-sponsors are necessary to bring the bill to the floor. As of today, there are 184 co-sponso s; Only 34 additional sponsors are needed. California has 36 members who have not yet signe on . Watson has contacted nearly 40 additional Congressional offices this week, with one new sponsor confirmed. Many of the offices require a request from a constituent, before considering co-signing a commemorative bill. If ymu r epreseata~ e a ove · , a-U.. A united effort by the California delegation on Res.ll1, would be an important step for biomedical research in California. At this time, only Representatives Bob Filner, Duncan Hunter, on Packard, and Lynn Schenk have signed on as co-sponsors from San Diego.

TRIP REDUCTION PLANS (TRP) UrJNf3C:r~ cEV5 6. A legislative alert has been mailed to all of the CEOs &f-eu-r ,m ember ~ and s onsor# requesting letters to Governor Wilson in support of the EPA reclassification of our regTo n from "severe" to "serious." The letters also ask the Governor's support for SB-119, or its equivalent, which would put teeth into the smog check system to catch the "gross polluters." is D\~~Frv--fr~ .-.~~=W(~;pll:as.!~W-JLeaJa.tlllll-lQ;Hf-tt;ttk ,e-sttj3fHffi-from State Senator Lucy Killea for the EPA reclassification. This clears the way for the joint letter sponsored by State As e l.ymember Dede Alpert to EPA signed by all of the San Diego state delegation. CO arector of Public Policy, Teny Bibbens, and the San Diego Air Pollution Control Officer, Rich Sommerville, briefed all of the delegation's staff on the positive impact this reclassification would have on jobs--without compromising the environment.

FOOD AND DRUG ADMINISTRATION (FDA) STREAMLINING PROJECT ~ G~ 7. Progress continues in building support for the project with thJaddition of David Hale, CE~ Gensia, to the Advisory Committee. The Working Groups will be formed in September, with preliminary reports to the Advisory Committee in October. 7 8. Bill Otterson and Teny Bibbens gave a short briefing to Carol Sche~ ~. FDA Deputy Commissioner for Extern on the ~CONNECT project of FDA Stream linin ~ after she addressed EOs ~ biotech · Cl t1.T- b reakfast on Friday~g sponsored by BICIBIOCOM/San Diego Business Journal. She spoke to the audience about solutions the FDA was addressing to reduce the approval delays; however, she understood that

2 most of the delays involved continuous communication between FDA staff and the companies. promised to provide her with solid information that many of the delays are bureaucratic and due to understaffing, and do not contribute to the safety or efficacy of the product.

CV~e~ ning to build a reasonable data base on the extra cost to the patients in dollars and delayed health care caused by the long FDA approval cycle. The data is also quite clear that companies are starting to shift their manufacturing of new products overseas-when they obtain approval in other countries before the FDA approval. And the manufacturing stays there.

INTERNATIONAL AIRPORT

9. In an open letter to Transportation Secretruy Federico Pena, the San Diegp Jl~Jion-Tribune asked for support for an international airpor.t for San Diego. The ~~ne cited the need for a new airport as ~ keyQ~ uture economic needs of this city., ~· . ee&s- .. __ 1 _ .th.is-a+rport order for industries, such as high-tech and~iot ch to prosper) ~YEJ'LIUZ.90 ~ ~ ~y io ~ ~~~· ~o._ CONNEcr

10. The Ernst & Young and CONNECT A nnua/ San Diego Biotech/Biomed Survey is under way! This year marks the seventh anniversary of this well known survey sponsored by CONNECT and Ernst & Young. This year, Maggie Watkins of Ernst & Young, with some recent help from CONNECT volunteer Philip McClendon, have polled 200 San Diego companies for information about their size, when they were founded, how local politics have affected them, and various other pertinent facts. Each survey is held confidential and used only in aggregate to supply useful information to the community about the biotech and biomed industries. The surveys are still slowly coming into the Ernst & Young office and more are expected. The infonnation that is reaped from this survey is made available to the participating companies at a reception on September 22 at 4:30p.m. at the Hyatt Aventine. If your company has not yet submitted their survey, please fill out the short fonn and fax it as soon as possible to Maggie Watkins at Ernst & Young at 232-6055. If you have any questions or need more forms or would like to give the survey over the telephone, please contact Phili11 McClendon at 534- 6114. The more surveys that are received, the more useful and accurate this survey is to the community, so please submit them!

UCSD

11. UCSD Extension's Channel 35 will expand from its low-powered transmitter on Mount Soledad to Southwestern Cable Channel 15 at 5:00p.m. on Tuesday, August 31. "This brings the resources of UCSD to your living room ," said CONNECT Director Bill Otterson.

LOCAL POLITICS

10. Congressman Duncan Hunter is collecting data on the burden of government regulations on small companies. If you want to supply inforn1ation on your problems with the existing regulatory structure, please request a copy of Congressman Hunter's survey from Deborah Abblitt at CONNECT 534-4750.

3 PAST WEEK

11. San Diego celebrated Governor Pete Wilson's 60 Birthday, and local party affectionados were out in force at Sea World to fete him. UC Regent Peter Preuss and Bill Otterson posed for the obligatory photograph, which will join its companion from Pete's 58th Birthday Party and may make it to the CONNECT Newsletter. UC Regent John Davies was hidden under an Elvis Presley wig, as he epitomized the theme of the party. UPCONITNG aDS

12. Entries are being sought for the "1993 Most Innovative New Products Awards" competition. Awards may be given in up to four categories: Biotechnology/Biomedical; High-tech Electronics; Software; and "X." Finalists will be announced in November and winners will be named on Dec. 8 at a special lunch. To be eligible, products must have been developed in San Diego and had their first sale between Sept. 16, 1992 and Sept. 15 , 1993. For more information, contact Teesha Hanson at 534-6114.

13. CONNECT's seminar on "Financing and Planning Cost-Effective Facilities" for biotech companies is scheduled Sept. 23. Participants will learn how to finance a facility, who should be on the team , the role of the strategic plan in evaluating alternatives, and how to decide between leasing vs.owning. For more information, call CONNECT at 534-6114.

14. The 1993 National Association for Biomedical Research (NABR) conference "Launching Our Best Ideas: Back to the Future" addresses contemporary challenges in animal care regulations, animal research and congressional health care policies. This will take place Sunday, October 3-5 at the Capital Hilton Hotel in Washington, D.C. For information call NABR at 202-857- 0540.

NEWS FROM SPONSORS AND MEMBERS

15 . !DEC Pharmaceuticals has appointed William R. Rohn, age-49-, to the newly created position of senior vice resident, s.ommercial and ..c..o rporate evelopment. Mr. Rohn came to the p. -;::r.. - - - company from Adria Laboratories, where he served as Senior Vice President of Sales and Marketing, and was responsible for strategic and commercial partnerships. "Bill Rohn has a wealth of experience in the pham1aceutical industry and in the oncology market, specifically," said William H. Rastetter, Ph.D., President, !DEC.

16. Mycogen Corp. is consolidating its seed operations in an effort that could trim expenses and grow some profits. They are combining four recently acquire ~ d ~ubsidiaries into a single division---a restructuring that will eliminate 111 employees!z,about i'>2% of its work force, and shave several million dollars from expenses. Mycogen has approximately 1,000 employees nationwide. @nly 12 employees will be laid off in San-Bieg6. Mike Sund, company spokesman said, "The restructuring plans focus on developing seeds and plants that are more resistant to insects and to lay the groundwork to become profitable."

17. CONNECT would like to welcome new M~ Energy Compression Research Corp. Founded in 1983 , they are involved in military and commercial markets in the U.S. for devices and systems in the fields of pulsed power, high power microwaves, lasers and electro-

4 optics.

5 BILL'S EDITORIAL August 31, 1993. and their supporters.

Kudos For Maureen

As related above, when Overland Data needed the The alternative is more joblessness in San Diego. City, Maureen StaJ•Ieton and her staff were there. The only way we can get out of this recession is by This is the kind of support that should not go job growth. The fastest way to get growth is to unrecognized, and if this columnist is going to earn stem the tide of companies moving out of the sobriquet, "Rally Committee Chairman for San California and to make it easier for companies Diego:Q:his is the time and space for the already located here to expand. recogmtion. Overland Data is on a tight schedule for moving into expanded facilities to permit them Because there is so much unnecessary regulation to move a product-line and its accompanying jobs now, the only way to resolve the problem is with from Singapore back to San Diego. Any sledge hammer tactics. A moratorium on new unnecessary hold-up in the permitting and regulations is a start. Now lets put "sunset inspection process could set back the conversion provisions" on old regulations. Under the latter, schedule, costing the company monew nd the every regulation automatically expires at the end of economy jobs. The City's response was exemplary. two years unless reauthorized. And no blanket Hoorah! reauthorizations.

Overregulation and the California Economy David Hale and NAFfA

If manufacturing companies move out of California, Why did David Hale, Pres and CEO of Gensia ask taking their jobs with them, because of high labor me to get CONNECT behind NAFTA? The costs and high real estate costs, there's not much we argument for the biotech industry is a bit far out · can do, right? Wrong, says a growing number of time, since few are shipping produc ~ yet, but it says observers. If new housing costs are inflated thirty that an increasingly wealthy Mexico will want to percent due to regulation, then there's lots we can buy the "latest and greatest" pharmaceuticals, and do . NAFTA will lower tariffs on thos tj , ~~~t are manufactured in the U.SQBut ~main thrust The new logging rules in the Northwest have is that NAFT A would be good for San Diego. already increased the cost of lumber, the single ~pruz.itl , and may other high-tech CEO's, really do highest cost item in building new homes. That, in care about the future of their city, and this is a turn, increases the cost of fire and homeowners reflection of this care. insurance (replacement costs of the structure). All these costs must be born by the homeowner, who Senator.. Barl>ara Boxer and Dianne Feinstein and must look to his or her employer for a higher sa la ry smcn Duncan Hunter, Bob Filner and Lynn to cover the higher costs! In fact, the new home ~~~..a nd City Council candidate Peter Navanu owner bears all the costs placed on the developer. a oppose NAFT A, for reasons that Mary Alice cevido and I think are wrong. Boxer, Feinstein, 1 But you say the ,S)i ty or ~ unty needs additional . Filner, S n k and Navarro may just be throwing revenues to compensate for the losses from their vote with organized labor, but Hunter's

) oposition . The alternative, as cities like reasons are more emotional. Since the NAFTA vote Indianapolis, St. Paul, Jersey City, and others are is expected to be close, we need all the help we can discovering, is to CUT EXPENSES. Combining get in changing these votes. NAFT A can serve as functions, privatizing, and eliminating unnecessary the beginning of the opening of markets in all outflows are all ways that embattled local South America to U.S. manufactured goods. That governments are finding to balance their budgets. would be good for ALL of us. But it takes real will on the part of elected officials

6 When Peter Navanu was walking the precinct last week, Anne and I had a chance to talk with him one-on-one for a half hour. The conversation started with the unemployment problem and migrated immediately to the problem of San Diego's decreasing per-capita income, \1'\J~~~~ which I was first alerted last year by ~We 'both agree it is San Diego's biggest problem. But we parted agreement on the question of NAFTA, and perhaps I now understand why. Peter is an economist, an academic economist. He projects into the future, based upon the past. I am an entrepreneur. I see opportunities where others see problems. To wit: I see the NAFT A agreement as an endorsement by my country of "doing business with the Mexicans" (we already "do business" with the Canadian bl see NAFTA as legitimatizing international trade, first with Mexico, and later with all South America. I see new markets opening up in South America as countries like Chile and Argentina begin to adopt free market systems, leaving behind stultifying statism.

Some complain that the Maqiladoras add little to our economy because they don't buy their piece parts from Tijuana or San Diego. I look at this fact as an opportunity for a ~ to exploit. Let meet the plant managers and find out what we have to do to become local suppliers. That's entrepreneurism!