With biotech pioneer Alfred Mann's announced $3.28 billion sale last week of his Northridge-based MiniMed Inc. and a related company to Medtronic Inc. of Minneapolis, L.A.'s roster of home-based companies continues to dwindle.
Once more, a high-growth company has been plucked from the business landscape by a larger outsider that has no plans to move its headquarters into town.
Instead, MiniMed will become a unit of Medtronic, the world's biggest medical device maker.
MiniMed joins such technology companies as Alpha Therapeutic and Chiron Vision that were born and bred in the region only to be sold off or merged once they matured a bit.
"You get that kind of sinking feeling in your stomach," said Ahmed Enany, executive director of the Southern California Biomedical Council, a trade group that promotes the region's biotech industry. "MiniMed is our star in L.A., and it's going to be bought by an outsider from somewhere else."
But at least in MiniMed's case, Medtronic has a reputation for giving its subsidiaries a measure of autonomy, and the company said it has no plans to move the insulin-pump maker from its new $70 million headquarters on the campus of Cal State Northridge. Current management, with the exception of Mann, also will stay, officials said.Mann's windfall
The pending deal will earn MiniMed founder Mann, who owns a little more than 25 percent of MiniMed, nearly $1 billion, including his stake in the privately held Medical Research Group, which was also sold to Medtronic for $420 million. MRG has been conducting research into the development of an artificial pancreas, considered the end-game in diabetes management.
Mann, 75, who so far has sold off six of his startups, is expected to use that money to promote his other companies. Stepping down from the chairmanship of MiniMed also will give the aging entrepreneur time to pursue his avowed goal of taking public two of his other companies, Advanced Bionics Corp. and Mannkind Corp., over the next two years.
Advanced Bionics, based in Valencia, makes cochlear implants for the hearing impaired, while Mannkind, based in Sylmar, is a recently formed enterprise that combines three of his businesses and is developing a cancer vaccine, among other biotech innovations.
Nevertheless, for the L.A. economy, the fact remains that another successful local business has passed into out-of-town hands.Foreign ownership
Alpha Therapeutic, a successful blood product company incorporated in 1978, is now in the hands of Wellfide Corp., a giant Japanese pharmaceutical company.
Chiron Vision was an original maker of intraocular implants, but was sold to Bausch and Lomb in 1997 for $310 million. The eye care giant later left the company's Claremont headquarters.
Examples are far from limited to the biotech sector. Los Angeles County is currently home to only about a dozen Fortune 500 companies, only a fraction of the number based here a couple decades ago.
The small number of large companies headquartered in Los Angeles has prompted the Milken Institute to considering mounting a study of the matter, based on the premise that the region is clearly suffering from a bad reputation linked to smog, traffic congestion and the high cost of housing.
"It's very serious, and I don't think it has a lot to do with city government," said Perry Wong, a Milken Institute economist. "The question is, are we competitive enough?"
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