1. October 14-20, 2016 Proudly serving Santa Barbara, Ventura and San Luis Obispo counties Vol. 17, No.32
By Philip Joens
Staff Writer
Tenpharmaceuticalcompanies,including
Amgen, have donated almost $54 million to
opposeProposition61,aballotinitiativethat
proponentssaywouldstoppricegougingon
prescriptions.
A Business Times analysis also shows
theThousandOaks-basedcompanydonated
more than $190,000 over the past two years
to members of three congressional panels
whosehearingsquestionedpharmaceutical
executives about skyrocketing costs.
If approved by California voters on Nov.
8, Prop. 61 — the California Drug Price Re-
lief Act — would require California to pay
the same price or less for prescription drugs
that the federal Department of Veterans Af-
fairs pays for patients under Medi-Cal or the
California Public Employees’ Retirement
System.
Roger Salazar, spokesman for Califor-
nians for Lower Drug Prices, which is lead-
ing the Prop. 61 campaign, said drug prices
AmgenspendsbigtodefeatProp.61
You might call it “Rick Caruso mo-
ment, take two.”
A couple of years ago I coined the
phrase “Rick Caruso moment” to de-
scribethecuriousphenomenononthe
CentralCoastwhereprojectsdon’tre-
allybegin–theyjustmoveforwardon
theirownmomentumafterthelastop-
ponents fade away.
Such was the case, I argued, with
legendary Los Angeles developer Rick
Caruso’s decade-long quest to build a
newhotelonthelong-abandonedMira-
mar property near the San Ysidro Road
exit on Highway 101 in Montecito.
But on Oct. 10, there was Caruso,
his irreplaceable community affairs guru Rick
LemmoandthetopbrassfromRosewoodHo-
telGrouptoturnaceremonialshovelfulofdirt
at the 16-acre site and, as Pink might have put
it, get the party started.
Under a blue sky broken by a few puffy
Semtech,
Comcast
team up
By Philip Joens
Staff Writer
A new partnership with Comcast could
transform Semtech’s fledgling LoRa technol-
ogy in the United States.
One day LoRa, or Low Power Wide Area
Networks, could connect everything from
sidewalks to light bulbs to the Internet. Com-
cast wants to use the technology as the com-
pany continues to grow its Internet business
servicesdivisionforretail,manufacturingand
other industries.
Under the agreement, Comcast will set
up trial LoRa networks in San Francisco and
Philadelphia to learn about customers’ needs
and uses for the evolving technology.
Thoughmanyforeigncompanieshaveused
LoRa so far, Comcast’s trial will be the first
big stateside test for the technology.
“We’ve been working with partners across
the world on their rollouts of (Internet of
Things) networks. It’s been going on for quite
a few years,” said Semtech CEO Mohan Ma-
heswaran. “The USA market is one where we
CarusobreaksgroundonMiramarresortnotamomenttoosoon
see PROP. 61 on page 22A
see SEMTECH on page 23A
see DUBROFF on page 19A
henry
dubroff
Editor
$1.50
Patagonia and Fair Trade USA representatives participate in a panel discussion on Oct. 6.
Patagonia pioneer
ApparelbrandpartnerswithFairTradeUSA,debutsbeer
By Marissa Nall
Staff Writer
Two Patagonia projects came to frui-
tion this month as the Ventura-based ap-
parelbrandpartneredwithanagricultural
certification group and launched a new
beerlinemadewithregenerativegrowing
practices.
Fair Trade USA was founded in 1998
and works to ensure that farms provide a
living wage and engage in safe business
MARISSANALLPHOTO
see PATAGONIA on page 16A
Education
UCSB engineering
50 years young
See page 7A
Montecito Country Club
builds new golf course
See page 3A
THE INDEX
THE LIST
Private companies. . . . . . . . . . . 17A
Commentary. . . . . . . . . . . . . . 18A
Leads. . . . . . . . . . . . . . . . . . . . . . 12A
Newsmakers. . . . . . . . . . . . . . . . 5A
REAL ESTATE . . . . . . . . . 4A
Ventura land donated to trust
AGRICULTURE. . . . . . . . 6A
Farm lab teaches students
MONEY. . . . . . . . . . . . . . . 9A
Invoca has new CEO
Inside
•PatagoniaonTop25privatecompanieslist.Page17A
practices.Startingoutinthecoffeeindus-
try, it expanded to tea, cocoa and other
foodproductsbeforepartneringwithPa-
tagonia to adapt its certification to fit ap-
parel factories.
Patagonia is the largest supplier of
2. 22A Pacific Coast Business Times October 14-20, 2016 October 14-20, 2016 Pacific Coast Business Times 23A
PROP. 61
Continued from page 1A
have gotten out of hand because federal
andstatelegislatorshaverefusedtoenact
price controls.
“The skyrocketing price of prescrip-
tiondrugshaslefttoomanypeoplehaving
to decide between paying for their life-
saving medication and paying for other
necessities,” Salazar said.
An Amgen spokeswoman told the
Business Times that the company thinks
the initiative will hurt Californians and
said that it is poorly written.
“Bottomline,werecognizethatpeople
are concerned about prices,” said Kathy
Fairbanks, a spokeswoman for the No
Prop. 61 campaign. “But drug companies
are not going to lower prices (because of
the initiative). It could increase costs for
Californians.”
Proponents said they want to tie the
price the state pays to the price the VA
pays because, unlike Medicare, the VA
negotiatesthepriceitpaysfordrugs.Cali-
forniaspentabout$3.8billiononprescrip-
tion drugs in 2014-15. Between 3 million
and5millionpeoplewouldbeaffectedby
Prop. 61 price controls if enacted.
“This was the simplest, most effective
way that we could reduce prices,” Salazar
said.
COSTLY CAMPAIGN
When the dust settles, Prop. 61 may be
one of the most expensive California bal-
lot measures in 2016.
AsofOct.2,opponentsofthebillraised
A scientist works in a lab at Thousand Oaks-based Amgen in this courtesy file photo.
COURTESYFILEPHOTO
$86.9 million and spent about $49.5 mil-
lion.The10drugcompanieswhomakeup
the largest donors to the opposition have
given a combined $53.9 million to defeat
the bill, according to the California Fair
Political Practices Commission.
Of those, Amgen ranks No. 4 on the list
of donors, contributing $5.6 million so far
tothecampaign,behindMerck,Pfizerand
Johnson & Johnson, which each contrib-
uted $7.21 million.
AbbVie and Sanofi-Aventis rank No. 5,
each giving $5.2 million.
The Los Angeles-based AIDS Health-
care Foundation has raised most of the
$14.5milliondonatedbyproponentswho
are being outspent six-to-one.
In 1990, Congress passed its first at-
tempt to rein in soaring drug prices when
the Medicaid Prescription Drug Rebate
Program was created. A report from
Harvard University says between 1990
and 2000, the federal government saved
$19.8 billion because of the program. At
thesametime,though,Medicaidprescrip-
tiondrugcostsincreased14.8percentbe-
tween 1990 and 1997.
Fairbanks said the way to rein in drug
pricesisthroughstatewidelegislation,not
the ballot box.
Earlier this year, drug company lobby-
ists were able to kill a bill that would have
required advance notice of health care
price increases of more than 10 percent.
CONGRESSIONAL DONATIONS
On the federal level, Amgen’s political
action committee has spent $1.43 million
lobbying members of Congress over the
last election cycle.
Amgenspent$142,000oncontributions
tocampaignsorPACsassociatedwithtwo
congressionalcommitteesassignedtoin-
vestigate the high price of drugs.
Amgen spent $127,000 on contribu-
tions to 16 of 22 members on the Senate
Health, Education, Labor and Pensions
Committee, which drafts bills related to
biomedical research and development,
public health and aging.
Amgen also contributed $15,000 dur-
ingthattimetonineof43membersofthe
House Oversight & Government Reform
committee, including four of 17 members
of the Healthcare Benefits and Adminis-
trative Rules Subcommittee.
Rep. Jason Chaffetz, R-Utah, chairs
theHouseOversightCommitteeandover
the last year has scolded former Turing
Pharmaceuticals CEO Martin Shkreli
and Mylan Pharmaceuticals CEO Heath-
er Bresch over steep price hikes by their
companies.
Chafetz accepted a donation of $1,000
from Amgen earlier this year.
Additionally, 12 of 19 members of
the Senate Special Committee on Aging,
whichhasnopowerbutconductshearings
and writes recommendations for legisla-
tionbytheSenate,acceptedabout$55,000
from Amgen during that time.
Candidates or PACs close to them also
returned $92,285 in contributions from
AmgenbetweenJanuary2015andAugust
2016.
“The members of Congress and candi-
datesthatreceivedAmgenpoliticalaction
committee contributions are generally
supportiveofimportantissuessuchaspa-
tientaccessandinnovationpreservation,”
said Amgen spokeswoman Kelley Daven-
port in an email.
Federal rules allow PACs like Amgen’s
to give a maximum of $5,000 per year per
candidate.
“Amgen strongly believes that com-
panies and their employees should be
actively engaged in civic life and as a re-
sult make contributions, as appropriate,
especially when they support Amgen’s
mission to advance the coverage of exist-
ingandfutureproducts,”Davenportsaid.
GUARANTEED ACCESS
When asked if Amgen tries to influ-
ence congressional efforts to regulate
drugprices,DavenportsaidAmgenworks
in a highly regulated industry influenced
by Congress and works to provide leader-
shiponmanyregulatoryissues,including
Medicare and Medicaid coverage and re-
imbursement and the Food and Drug Ad-
ministration.
Herbert Gooch, a California Lutheran
Universitypoliticalscienceprofessor,said
donationsdon’tguaranteefavorablevotes,
buttheydoguaranteecongressionalmem-
bers will take phone calls.
Gooch also said candidates are very
aware of where money is coming from.
“Amgen,they’dbefoolsnottobeplay-
ers in the political game,” Gooch said.
“But a large amount of money gets a hell
of a lot of access.”
A sign welcomes visitors to the Semtech campus in Camarillo.
PHILIPJOENSPHOTO
SEMTECH
Continued from page 1A
have a lot of activity, and smaller private
companies doing networks, but we just
didn’t have the big guy.”
LoRa is a young wireless technology
similar to Bluetooth technology, Wi-Fi and
cell phone signals. LoRa can connect sen-
sors,systemsandcomputers.Itssignalsare
longerthanBluetoothandWi-Fi,butshort-
er than cell phone signals.
The system is comprised of chips and
towers made by Camarillo-based semi-
conductor manufacturer Semtech that
transmit LoRa signals. LoRa enabled de-
vices operate at low power levels so bat-
teriesdon’tneedtobereplacedoften,and
LoRa networks require fewer transmitting
towers than cell phone networks.
Companies like Comcast see great po-
tentialforthetechnologyastheInternetof
Things slowly connects everything to the
Internet to make life easier and businesses
moreefficient.Semtechbeganalargeroll-
out of the technology at the beginning of
lastyear,butbegandevelopingthetechnol-
ogy about 11 years ago.
Machina Research, a London-based In-
ternet of Things think tank and advisory
firm, said global revenue from businesses
using the Internet of Things will increase
from $750 billion in 2015 to $3 trillion by
2025.
Comcast,meanwhile,beganlookingfor
new services last year to offset declining
cable TV subscriber numbers. Since 2007,
Comcast has sold Internet, TV and phone
services to small and mid-size companies.
Ithasbeenoneofthefastestgrowingparts
of Comcast’s business, generating about
$4.7 billion in revenue last year. Last Sep-
tember,Comcastannouncedplanstotarget
Fortune 1000 companies.
“It’s a rapidly expanding segment of
themarket,”saidComcastspokesmanJoel
Shadle.“There’snewtechnologiesnowthat
arebeingdevelopedlikeLoRathatprovide
good connectivity over large distances.”
As one of the largest Internet and cable
providers in the U.S., Comcast has already
spentbillionsofdollarsbuildingitsInternet
network.
In Comcast’s LoRa network, Semtech
LoRa transmitters will send LoRa signals
to LoRa devices connected to preexisting
Comcast network infrastructure. Those
devices will then relay that information to
other devices or the cloud and allow Com-
cast or its clients to review that data.
Comcast is based in Philadelphia and
the company wants to try out the network
in hip and techy San Francisco. Eventually,
Maheswaran said, Comcast plans to build
LoRanetworksin30citiesacrossthecoun-
try. If the trials are successful, Comcast
saidcommercialdevelopmentcouldstartin
the next 18 to 30 months.
To help Comcast build the LoRa net-
work,SemtechgrantedComcastawarrant
for $30 million worth of Semtech stock, or
about 1 million shares.
Tenpercentofthewarrantvestedwhen
the companies announced the deal Oct. 5.
Another10percentofshareswillvestwhen
50 percent of San Francisco and Philadel-
phia are covered by LoRa networks. About
athirdoftheremainingsharesthenvestfor
every 10 cities Comcast builds LoRa net-
works in.
Because of the announcement, Sem-
tech lowered its revenue guidance for the
third quarter by $3.8 million, or 6 cents per
share, and to $130 million to $138 million
— down from previous estimates of $134
million to $142 million.
Overthepastyear,severalgroupshave
announced plans to use LoRa technology
globally. In July, the LAAX resort in Swit-
zerlandsaiditwoulduseLoRatechnology
to track ski student’s locations via an app
so students could be rescued in case of
emergencies.
InDecember,SemtechsaidLoRawould
monitorthe47mostactivevolcanoesinJa-
pan. LoRa is even being used to track Afri-
canRhinostoprotectthemfrompoaching.
OnOct.11,thelargestInternetofThings
network in the United Kingdom also an-
nounced it would use LoRa technology.
Maheswaran said he is pleased with
Semtech’s U.S. progress because smaller
networks are being built.
In April, a Lincoln, Neb. company an-
nounceditwoulduseLoRasensorstotrack
vital signs and locations of cattle. The Fox
CanyonGroundwaterManagementAgency
also is using a LoRa network to monitor
groundwaterusagebycustomersinVentura
County.
“We have a lot of projects in the pipe-
line,” Maheswaran said. “Organizations
lookingathowtheycangetmoresensorin-
formationintothecloudandmanagethat.
A lot of private companies want to go on
a private network. In the U.S., outside of
Comcast, there’s a lot going on.”
• Bloomberg News contributed to this
report.