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Thursday, Jun 8, 2023

Human-Milk Firm Buys Facility to Nurse Growth

Looking to feed demand for its human milk-based drinks for tiny babies, Prolacta Bioscience Inc. is doubling its footprint.

The City of Industry firm was scheduled to close escrow last week on a 58,000-square-foot warehouse in Duarte. The new facility will receive and test all milk donations from mothers, while the City of Industry headquarters will process that milk into fortifiers and formula for premature infants.

Separating operations, said Prolacta Chief Executive Scott Elster, “creates a physical barrier between the bacteria that can come in milk and the milk that’s actually being processed.”

Elster added that Prolacta will fill the freed-up space at its headquarters by quadrupling the size of its massive processing tanks.

“We’re frankly running out of space,” said Elster, who plans to have his products in more than 200 neonatal intensive care units by year’s end. He added that the build-out of special clean rooms in Duarte should take a year to 18 months and Prolacta has tried to time the building purchase to keep pace with projected growth.

The company was guided by Lee & Associates in the $7.3 million purchase of the Duarte warehouse.

The firm is also preparing to bring aboard 120 employees to run the new facility, many of which will be manufacturing technicians.

Prolacta has been working with Citrus College professor Barbara Juncosa, who recently launched the school’s first technical training program for biomanufacturing and quality control lab work. Juncosa spent three weeks shadowing Prolacta workers in order to train her students for those exact positions.

“We had a full class within two days of opening registration and added another section in the winter,” Juncosa said. “Prolacta has been a huge champion for this.”

Hot market

The skyrocketing value of health care mergers and acquisitions is making for an attractive market, as evidenced by Thomson Reuters’ July year-to-date tally of $396 billion in global deals, which has already bested last year’s total.

Brentwood’s Intrepid Investment Bankers had that surge in mind as it recently moved to grow its 35-person team by adding a dedicated health care division.

“What’s so exciting about health care right now is so many industry sectors are booming, commanding a lot of interest from both financial and strategic acquirers,” said Intrepid Senior Vice President Jonathan Bluth, who heads the health care group. “There’s so much appetite to put investment money to work.”

Bluth, who previously worked for Deloitte’s health care investment banking group in Los Angeles, said there’s been rapid consolidation across the medical industry. The deal-making has been fueled partly by new reimbursement models and cost savings, he explained, which came about in the wake of federal reforms aimed at improving transparency in care quality.

“There are so many opportunities for health care companies to have substantial growth, and for private equity investors to put money to work and participate in that growth at this particularly unique time,” he said.

Target areas for consolidation include behavioral health and physician practices with a certain critical mass in their communities as well as businesses with novel reimbursement models or those participating in care management.

“We’re seeing hospitals and health plans buying physician practices and physician practices buying each other,” Bluth said.

While Intrepid had already been handling health care deals, Bluth will be its first executive focused solely on the industry. The firm is also looking to beef up its portfolio in the future.

“We’ll be aggressively pursuing health care companies across the spectrum, whether to raise capital, look at acquisitions or help sell outright,” Bluth said.


Santa Monica’s MD Insider has added five members to its medical advisory board: Dr. Thomas Krummel, chair of the department of surgery at Stanford University; Dr. Nancy Ascher, chair of the department of surgery at the UC San Francisco; Dr. Matthew Walsh, chair of the department of general surgery at Cleveland Clinic; Dr. Nathaniel Soper, chair of the department of surgery at Northwestern Medicine; and Dr. Michael Marin, chair of the department of surgery at Mount Sinai. … Jennifer Love has given up her seat on the board of West Hollywood’s Medbox Inc. as she assumes an executive post at Royal Caribbean Cruises in Miami. … Santa Monica’s Heal has added United Talent Agency Managing Director Jay Sures to its board. …Doheny Eye Institute in Boyle Heights has added Nelson C. Rising and Dr. Robert K. Maloney to its board.

Staff reporter Marni Usheroff can be reached at musheroff@labusinessjournal.com or (323) 549-5225, ext. 229.

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