The parent of four Providence hospitals in Los Angeles County has made a multimillion-dollar investment in one of the county’s largest physician practice management companies.
The California unit of Providence Health & Services, a nonprofit Catholic hospital chain based in Seattle, is taking an equity stake in privately held Lakeside Systems Inc., which provides management services for more than 1,600 primary care doctors and specialists from Ventura County to the San Gabriel Valley.
The strategic partnership is grounded in the fact that many Lakeside doctors practice and serve patients in the San Fernando Valley, where two of the hospitals Providence Saint Joseph and Providence Holy Cross are located.
Providence declined to disclose its stake in Lakeside or the specific dollar amount, but did acknowledge it was well over $1 million.
The investment is a first for Providence, which sees the move as a way to further its mission of expanding health care access in underserved communities, said Providence Saint Joseph spokesman Dan Boyle.
“In Lakeside we saw an organization with a very similar mission to ours in improving access to health care,” Boyle said.
Dr. Keith Richman, a former state assemblyman and a Lakeside co-founder, said the capital infusion will help Lakeside expand its clinic sites, information technology, and services such as disease management and patient education.
“We recognize the crisis in health care and this was a good time to enter into a strategic partnership with a company like Providence,” Richman said.
L.A. Ties
Shares of RXi Pharmaceuticals Corp., an East Coast spinoff of CytRx Inc., have largely maintained their value since beginning to trade on the Nasdaq Capital Market a month ago.
The stock price of RXi, which surged 74 percent to $10.51 when trading began March 12, was off less than 8 percent to $9.70 as of April 9. That figure is 61 percent above its opening.
The price gain is due in large part to the bulk of Worcester, Mass.-based biotech’s 12.7 million shares still being in the hands of insiders. The insiders include Los Angeles-based CytRx officers and the University of Massachusetts scientists responsible for RXi’s Nobel Prize-winning technology. CytRx itself still owns 49 percent.
The technology allows therapies to target the genes at the root of diseases without affecting other genes or cells. The approach could provide treatments for conditions such as cancer with fewer side effects than traditional therapies.
The company has a public float of only about 500,000 shares, but expects to eventually issue more to raise funds.
For board Chairman Sanford Hillsberg a Los Angeles attorney who has done work for CytRx since 2003 the successful spinoff is the latest in a long line of life science and technology companies that he has either advised or had a hand in launching.
Hillsberg, a partner at Los Angeles-based TroyGould PC, started his life science work in 1979 when a client, Dr. Manfred Mosk, came to him for help for help in turning his drug testing company into a drug development company.
“He said he wanted to own his own oil well rather than helping others build theirs,” Hillsberg said.
Los Angeles-based Medco Research Inc. went on to develop a handful of successful drugs before being acquired by Bristol, Tenn.-based King Pharmaceuticals in 2000.
Hillsberg estimates he’s since been involved in founding or serving on the board of at least a half-dozen companies, in addition to representing numerous others over the years.
But Medco still holds a special place in his heart both he and his father have used products first developed by the company. Hillsberg credits adenosine triphosphate for boosting the effectiveness of cancer treatments he received after being diagnosed with lung cancer in 2005. The substance became an energy-boosting supplement after being rejected as a standalone cancer treatment.
“When some of the scientists I had known at Medco learned I had cancer, they encouraged me to try it,” said Hillsberg, a nonsmoker. “If I hadn’t been involved with the company, I probably would have never as found out about it.”
Abraxis Acquisition
Abraxis BioScience Inc. earlier this month expanded the ways it can develop cancer and other therapies by acquiring Shimoda Biotech Ltd. and its subsidiary Platco Technologies Ltd. for $15 million and future milestone payments.
Shimoda, based in South Africa, has a technology that seeks to make oral drugs work more quickly by also making them injectable.
The deal gives Abraxis the company’s injectable painkiller Dyloject, which already is sold in the United Kingdom. Late-stage clinical trials for approval in the United States are under way.
Platco also develops cancer treatments, making it a good fit for Abraxis, which has a breast cancer therapy called Abraxane.
Staff reporter Deborah Crowe can be reached at
[email protected]
or at (323) 549-5225, ext. 232.
