1. 6A Pacific Coast Business Times August 5-11, 2016
Technology
www.pacbiztimes.com
When word leaked that the
FoodandDrugAdministration
declinedtoapproveaNovartis
biosimilar of an Amgen drug
July 19, there was silence from
the pharmaceuticals.
Butwhenregulatorslikethe
FDA or the European Medi-
cines Agency approve new
drugs, the news is celebrated
by companies as if fireworks
should explode and people should break
intosonganddanceinthestreets.Journal-
ists,likemyself,getbombardedbynewsre-
leasesaboutthepositiveeffects
of the new drugs.
Reuters quietly reported
that the FDA declined to ap-
prove Novartis’ biosimilar of
the drug pegfilgrastim, which
ThousandOaks-basedbiotech
giant Amgen sells under the
tradename Neulasta.
Reuters reported Vasant
Narasimhan, head of develop-
ment at Novartis, said the FDA issued a
lettersayingitwouldnotapprovethedrug
at the end of June, “without giving further
details.”
CreatedbyAmgenin1998andapproved
bytheFDAin2002,Neulastastimulatesthe
growth of white blood cells to fight infec-
tions. With $4.7 billion in sales last year, it
was second only to Amgen’s Enbrel, which
had $5.3 billion in sales.
A biosimilar, or essentially a generic
version, of Neulasta could help patients by
makingacheaperversionofthedrugavail-
able.ItalsocouldhurtAmgen’sbottomline.
Soitwasoddtomethatsuchimportant
By Philip Joens
Staff Writer
Lurking in Stefany Hedman Westenskow’s office is a
ghost.
The room is quiet. Blinds are drawn and it’s fairly dark,
butsomesunlightslipsinbetweentheshadesandshineson
the faded dark green carpet and an old puffy leather couch.
Hedman Westenskow sits at her desk — her father’s desk
— preparing to talk about his company, which is now her
company.
David Hedman founded ThermaPure in the late 1990s
anddevelopedtechnologytokillinsectsandpestswithhot
airinsteadofchemicalsharmfultohomeownersandtheen-
vironment. On May 13, he died at age 59 after a two-month
battle with cancer.
Less than a month later, on June 8, his daughter moved
into his office at ThermaPure’s headquarters near Ojai. Now
Hedman Westenskow is learning to be a CEO on the fly
while also carrying on his legacy.
“It was an interesting life growing up with someone
who’s an inventor,” she said. “My dad was just so passionate
aboutthetechnology.Hewouldtalkaboutitwitheveryone,
everywhere he went.”
Until his death, Hedman also served as the CEO of Ther-
maPure’s sister company, Ventura-based Precision Environ-
mental.Hedmanstartedthatcompanyin1986asanasbestos
removal company and his daughter will also now fill that
role.
ThermaPure owns nine patents for its ThermaPure heat
technology and licenses the technology to customers.
Since its founding, Precision Environmental has broad-
ened its services to include mold, pest, water and termite
remediationservicesusingThermaPure’stechnology.While
working at Precision in the mid-1990s, Hedman began tin-
kering with something called “structural pasteurization.”
ThermaPure’s heat system essentially creates a heat tor-
nado that traps bugs and kills them by overheating them.
Fansattachedtopropaneheatersblowshotairthroughout
a structure and heats the interior to about 115 degrees for
two hours.
Small probes are also placed into cracks, crevices and
Stefany Hedman Westenskow, CEO of ThermaPure, stands outside a testing facility in Ojai.
PHILIPJOENSPHOTO
see THERMAPURE on page 8A
September launches
planned at Vandenberg
Twolauncheswillhappeninoneweekat
Vandenberg Air Force Base next month.
Between 11:30 a.m. and 11:44 a.m. Sept.
15, the United Launch Alliance, a joint ven-
ture between Lockheed Martin and Boe-
ing, will launch the earth imaging satellite
WorldView 4 from launch pad SLC-3E.
RocketgazerswillalsogetatreatSept.19
from SpaceX when another Falcon 9 rock-
et lifts off at 9:49 p.m. carrying 10 Iridium
constellationcommunicationssatellitesinto
orbit.
Iridium hopes to launch a second batch
of 10 satellites in December and five more
batchesof10satellitesfromVandenbergby
the end of 2017.
So,bringyourcamera.Thephotoscould
be stunning.
Land O’Lakes completes
acquisition of Ceres
Minneapolis-based Land O’Lakes com-
pleted its acquisition of Thousand Oaks-
basedag-biotechcompanyCeresonAug.1.
On June 17, Land O’Lakes, an ag and
food conglomerate that had $13 billion in
salesin2015,announceditwouldbuyCeres
for $17.2 million.
For about two decades, Ceres had been
devotedtodevelopingbiofuelsusingcrops
like sorghum, alfalfa and corn and invested
heavily in repeated tests in Brazil. Last sum-
mer, Ceres switched its focus to developing
traits for food crops instead.
Under the deal, Ceres will become part
of Land O’Lakes subsidiary Forage Genet-
ics International. Land O’Lakes will pay 40
cents per share for Ceres, which had been
tradingat22centspershareonJune16be-
fore the deal was announced.
Procore adds Wallack
to board of directors
Procore, a Carpinteria-based manufac-
turerofcloud-basedconstructionsoftware,
added Perry Wallack, co-founder of Corner-
stone OnDemand, to its board of directors
July 7. Cornerstone OnDemand, based in
Santa Monica, is a cloud-based talent man-
agement software company.
Goleta Entrepreneurial
Magnet to host Demo Day
The Goleta Entrepreneurial Magnet will
host its Demo Day from 5:30 p.m. to 7:30
p.m. Aug. 9 at the Bacara Resort and Spa.
Sixcompanieswereacceptedforaseven-
weeksummeracceleratorthroughthecen-
ter. At the event each team will pitch their
productstoinvestorsanddemonstratethem
afterward.
August 5-11, 2016 A report on business at the cutting edge Page 7A
see TECHNOLOGY on page 8A
Briefcase
Taking over for dad
ThermaPureCEOseizesthereinsafterfatherdiesofcancer
Silenceisdeafeningwhennewdrugsarenotapproved
United Airlines dropping flights from Santa Maria airport
By Marissa Nall
Staff Writer
The Santa Maria Public Airport will no longer have
United Airlines flights to San Francisco after Oct. 5.
Operated by SkyWest, the carrier will continue to pro-
videtwoflightsdailyuntilthenandwillcontactcustomers
with reservations past that date to offer alternate accom-
modations,saidUnitedspokesmanJonathanGuerin.Until
May of last year, the company provided daily flights to Los
AngelesInternationalAirportbeforerelocatingthosetoSan
Francisco.
“We continually review supply and demand for service
in all of the markets we serve,” Guerin said. “We made the
decisiontoendservicebetweenSantaMariaandSanFran-
ciscobecausethatroutewasnotmeetingexpectationsand
was not sustainable.”
TheSantaMariaPublicAirportDistrictexpresseddisap-
pointmentoverthedecisioninastatementAug.2.Itattrib-
uted the move to United’s “failure to address military and
governmentfares,scheduleissuesandthelocalfarefornon-
connecting passengers to San Francisco.”
Whilethereweremanyfactorsaffectingtheoverallper-
formanceoftheroute,aregionalpilotshortagecontributed
tothedecisiontoendtheservice,Guerinsaid.Unitedisad-
vising its customers that they can still fly out of the neigh-
boring Santa Barbara and San Luis Obispo airports.
Flights to Las Vegas from Santa Maria are still available
via Allegiant.
The district will pursue other airline options to replace
United’s service, the statement said.
FOOD FOR FIESTA
PublichealthconcernssurroundingtheannualOldSpan-
ish Days Fiesta prompted the Santa Barbara police, parks
andhealthdepartmentstoannounceacrackdownonillegal
food vendors for the duration of the festival.
“Rovingfoodvendors”thatoperatewithoutapermitis-
sued by the tax and permit inspector risk citations, arrest
and property seizure by city enforcement agencies, said a
statementreleasedbytheSantaBarbaraPoliceDepartment.
The city offers special event and single day licenses for
vendors as well as outdoor dining licenses for restaurants
alreadyoperatingunderabusinesslicense.Healthpermits
arealsorequiredbycountyandstateordinances,whether
vendors are operating at a fixed or mobile location.
ThefiestawilltakeplacethroughAug.7,featuringSpan-
ish,NativeAmericanandMexicanculturalevents,costumes
andmenusalongStateStreetinSantaBarbara.Thefiesta’s
executivecommitteeanticipatesmorethan100,000people
will attend the festival, which got its start in 1924.
APPROACHABLE ADVERTISING
Ventura’s 2017 visitor magazine will get a redesign
courtesyofapartnershipbetweentheVenturaVisitorsand
ConventionBureauandGreensboro,N.C.-basedPaceCom-
munications,announcedExecutiveDirectorMarlyssAuster.
Of the 120,000 copies that will be printed annually, al-
most50,000willbedistributedincitiesthroughoutCalifor-
nia and 20,000 will go to area hotels, motels and cultural
centers.Theremainderwillbescatteredthroughoutregional
welcomecenters,airlinesandtradeshows,savedforevents
and mailed to consumers upon request. Visit Ventura will
host digital copies and send 10,000 to its target markets in
Canada, the Pacific Northwest and other states.
“There are a lot of coastal cities but why do they want
to come to ours?” Auster asked. “I think it’s the commu-
nity,thelocalbusinesseswehavehereandwhatweshare
with the visitors that come here. Immediately, they feel
like they belong.”
Pacehasmovedintothecontentcreationspacefromits
roleinpublishing,overhaulingthetraditionalvisitorguide
afterexperiencewritingfeaturesoncitiesforin-flightmaga-
zines.
“Visitor magazines, first of all, are as old as the tele-
phone,but,unlikethetelephone,visitormagazineshaven’t
changed,”saidSteveMitchem,Pacevicepresidentandpub-
lisher of travel media. “They still keep trying to do what,
now, mobile devices do.”
Anoutdated,phone-book-likeformathastouriststuning
outandbusinessesparticipatingoutofobligation,Mitchem
said. The new format will do away with display ads that
brokeupreaderengagementandreplacethemwithpromo-
tional content in a story format.
“The old visitor guides provided information,” he said.
“What we’re trying to do is tell stories.”
The brand will align with the VVCB’s focus on outdoor
activities and “approachable authenticity,” Mitchem said.
Businesses can purchase space in the guide for $2,000-
$4,500 until Sept. 9.
MASCOT AND MURALS
San Luis Obispo is requesting input from residents this
monthtodetermineanewlocationforitsBoxArtProgram,
aswellasapplicantsfortheopenroleofDowntownBrown,
the farmers market mascot.
Started in 2010, the Box Art Program has covered 33
traffic signal utility boxes with art pieces commissioned
fromlocalresidents,artistsandstudents.Withthedualpur-
poseofgraffitiabatementandcommunitybeautification,the
city is soliciting votes from community members to priori-
tize the 31 remaining utility boxes by Aug. 28.
Applicants to portray area bear mascot Downtown
BrownonThursdayeveningsatthefarmersmarketcansend
resumes to the SLO Downtown Association.
• Contact Marissa Nall at mnall@pacbiztimes.com.
Travel & Tourism
Philip Joens
Technology

2. 8A Pacific Coast Business Times August 5-11, 2016
The Pacific Coast Business Times/UCSB
Economic Forecast Project Index rose 0.95
percentfortheweekendedJuly29.Thena-
tional indices had mixed gains and losses.
Deckers Outdoor had the strongest per-
formance after reporting its quarterly earn-
ings.TheGoletafootwearandapparelcom-
pany jumped 8.8 percent, ending at $66.01.
Camarillo’s Semtech ended the week
with a 5.9 percent boost. Shares ended at
$25.42, just down from new 52-week highs
set the prior two days.
Medical technology company Inogen,
out of Goleta, rose 5.5 percent to $53.74.
SantaPaulacitrusgrowerandrealestate
developerLimoneirafell3.4percent,ending
at $17.69, and Lockheed Martin, an aero-
space and defense company with locations
throughouttheTri-Counties,dipped1.8per-
cent to $252.73.
Paso Robles-based Heritage Oaks Bank
surpassed analyst estimates on both earn-
ings per share and revenue in its second
quarter earnings.
The bank reported net income of
$4.2 million, or 12 cents per diluted share,
forthesecondquarterof2016comparedto
$3.7million,or11centspershare,inthesec-
ond quarter of 2015. It beat
estimates by a cent. Heri-
tageOaksreportedrevenue
of $18.88 million, up 7.8
percent on the year, surpassing projections
by $260,000.
Gross loans increased by $142.6 million,
or12percent,to$1.33billionforthesecond
quarter compared to $1.19 billion last year.
Total deposits increased by $95.5 mil-
lion, or 6.3 percent, to $1.61 billion for the
second quarter compared to $1.51 billion a
year earlier.
LTC MISSES ON REVENUE
Westlake Village-based LTC Properties
matchedanalystprojectionsonfundsfrom
operationsbutmissedonrevenueinitssec-
ond quarter earnings.
The publicly traded
real estate and investment
trust earned $29.2 million
in funds from operations for the second
quarter, up 22 percent from $24 million for
thecomparable2015period.Thatmatched
analystexpectationsof77centsperdiluted
share.
LTC reported $22.1 million in net in-
come, or 58 cents a share, up from $17 mil-
lion,or48centsashare,lastyear.Itreported
$33.1 million in revenue, up 21.9 percent on
theyear,butmissedestimatesby$390,000.
LTC is a real estate investment trust that
buys facilities like nursing homes through
sale-leaseback transactions and mortgage
financing.Investorsinsuchcompaniesoften
usefundsfromoperationsasasubstitutefor
earningspersharebecauseittakesdeprecia-
tion and amortization into account.
Duringthesecondquarter,LTCacquired
two memory care communities in Kansas
totaling 120 units for $25 million. It also
purchased a newly built 60-unit memory
care community in Kentucky for $14.3 mil-
lionanda70-unitassistedlivingandmemo-
rycarecommunityinGeorgia,alsofor$14.3
Heritage Oaks Bank beats earnings estimates
• Don’t give up on international stocks,
writes Gene Dongieux at Ariadne Wealth
Management of Santa Barbara. Citing work
by Nobel laureate Harry Markowitz, he
writesthatatrulydiversifiedportfoliowould
contain more than 50 percent international
stocks,reflectingrisingglobalequityvalues
that are largely ignored by today’s pundits.
Forty-five years ago, when Markowitz per-
formed his initial research, the figure would
havebeen65percentU.S.and35percentin-
ternational stocks.
• Amid a rally in defense stocks, General
Dynamics has been left behind. But the St.
Louis-based maker of nuclear submarines
and Gulfstream jets could get a lift if it’s
business jet business stabilizes, according
to a recent article in Barron’s. The Crown
family, which counts the Ojai Valley Inn &
Spaamongitsholdings,owns10percentof
General Dynamics stock.
• Scott Anderson at Bank of the West
is still counting on a “rebound in U.S. real
GDPgrowth”inthesecondhalfof2016with
a target of “around 2.4 percent annualized.”
After five quarters of shrinking inventories,
a turnaround in companies stocking their
shelves with goods should help push GDP
higher,hewrites.Amodestgaininbusiness
fixedinvestmentandresidentialinvestment
shouldalsohelpreverseadisappointingQ2. see FIN BRIEFS on page 10A
August 5-11, 2016 A weekly report on personal finance and investing Page 9A
Biz Times index up;
national indices
show mixed results
Index Update
One-week One-month 52-week
change change change
Biz Times index . . . . 0.95%. . . . . 4.40%. . 10.37%
DJIA. . . . . . . . . . . . . . . -0.75%. . . . . 2.69%. . . 4.20%
S&P 500. . . . . . . . . . . -0.07%. . . . . 3.36%. . . . 3.32%
Nasdaq. . . . . . . . . . . . . 1.22%. . . . . 6.16%. . . . 0.66%
Russell 2000. . . . . . . . 0.58%. . . . . 5.46%. . . -1.51%
Note:Seepage11AforcompaniestrackedbytheBusiness
Times/UCSB stock index.
Portfolio watch
$FINANCIAL BRIEFS
TAKING STOCK
Workers secure solar panels to a rooftop during a SolarCity residential installation.
Tesla’s bid to buy SolarCity
unlikely to draw other offers
By Christopher Martin
Bloomberg News
Tesla Motors’ lowered $2.6 billion bid
forSolarCityisunlikelytodrawacompet-
ing offer for the largest U.S. solar power
supplier, two analysts said.
The deal announced Aug. 1 includes a
45-day “go-shop” period for SolarCity to
solicit a better price. Not many clean-en-
ergy firms are in a position to make a bid,
andpotentialbuyersfromotherindustries
would need more time to put together a
compelling offer.
Elon Musk, Tesla’s CEO and Solar-
City’schairman,hastoutedthelong-term
benefits of combining solar-powered
homesandbusinessesthatproduceelec-
tricity for emissions-free vehicles. In the
short term, he said the merger will initial-
ly yield $150 million in synergies, and it
eventuallymaytransformthetransporta-
tionandenergyindustries.Asadisruptive
force, other companies will want to see
Musk move first, said Michael Morosi, an
analyst at Avondale Partners LLC.
“It’s probably too early for a Ford Solar
Co.,” Morosi said in an interview Aug. 1.
“But Musk has a vision that can bring it
all together. GM and Ford and the utility
industry are all watching.”
A large utility might be able to make
a better offer for SolarCity if they want
to get into solar in a big way, said Jeffrey
Osborne, an analyst at Cowen & Co. That
wouldmeanenteringthemarketatadiffi-
culttime,withresidentialdemandslowing.
SolarCity reduced its guidance Aug. 1
byabout10percent,andnowexpectstoin-
stall900megawattsto1gigawattofpanels
thisyear,thesecondtimethisyearit’slow-
ered the 2016 forecast.
“That’s not the best way to attract a
BLOOMBERGNEWSFILEPHOTO
see TAKING STOCK on page 10A
news was reported in such a discrete way.
After all, Novartis issued a Dec. 7 news release
tootingitsownhornbysayingitsdrugworkedjustas
well as Neulasta, which screamed to investors that it
would d be approved.
WhenNovartisandtheFDAtiptoedaroundtheis-
sue, the silence was deafening.
“The FDA issued a CRL regarding the BLA for
the proposed biosimilar pegfilgrastim,” a Novartis
spokesman said in an email. “We are working closely
with the FDA to address their comments. The CRL
doesnotimpactotherregulatoryapprovalsorplanned
regulatory filings for other biosimilars in our pipe-
line.”
An FDA spokeswoman declined to confirm the
report. Instead, she walked me through the approval
process.
“The FDA is prohibited by law from commenting
onpendingapplicationssincetheseconversationsare
consideredconfidentialandproprietarytotheappli-
cant,” she said.
“Ifacompanyreceivesacompleteresponseletter,
itwouldbeuptothecompanytodisclosethatinforma-
tion.Ina(completeresponse)lettertheFDAprovides
thereasonswhyanapplicationisnotbeingapproved
initspresentformandprovidesrecommendationsto
the sponsor.”
NowIknow,acompleteresponseletterisjustalet-
ter. It’s an early part of the process letting companies
know the FDA will not approve a drug, but also gives
companiestimetoamendtheirapplicationandrefile
later.
Givenallthenoise,though,that’smadeaboutposi-
tivenewsregardingpositivestudiesandpositivedrugs
beingapproved,thesilenceandlackoftransparencyat
this early stage seem odd.
• Contact Philip Joens at pjoens@pacbiztimes.
com.
TECHNOLOGY
Continued from page 7A
THERMAPURE
Continued from page 7A
evenbedstoheatthoseplacesandkilltermites,bedbugs
and other pests.
“We’re trying to steer away from exposure to chemi-
cals because some of these chemicals are carcinogenic,”
ThermaPure Vice President Jared Perez said.
HedmanWestenskowadded,“Alotofthesechemicals
are designed to break down the nervous system of the
creatures. If you have something that’s breaking down
the nervous system of something that tiny, you worry
about the potential.”
DaveHedmanlovedinventingthings.Afewyearsago
he tried to invent a way to clean pools but it didn’t work.
“The pool turned completely green and we couldn’t
use it,” Hedman Westenskow said with a laugh.
Like any good inventor, he also used his own family as
guinea pigs, testing the ThermaPure system on his own
homeandcar.Once,HedmanevenusedtheThermaPure
heat system to sanitize his speedboat.
“He would say if I know it’s safe for my family, then I
knowit’sgoingtobesafeforeverybodyelse,”Perezsaid.
Hedman was also a pilot. He passed down that love
to his other daughter, Rachel Hedman, who’s currently
studying and working at the Santa Paula airport to be-
come a flight instructor.
The year has been a trying one for Hedman Westens-
kow. In January, she married her husband Max Westens-
kow shortly before her father’s diagnosis.
It’s still hard for Hedman Westenskow to talk about
her father, and she was reluctant to discuss his death.
While giving what little detail she wants to share, she
twiddles her thumbs and looks up at the ceiling, holding
back a lump in her throat.
Hedman Westenskow said her father was misdiag-
nosed with an autoimmune disease in January and in
March he was diagnosed with cancer.
“He went through one round of chemo. He made it
through that, he was doing better, and after that he just
took a quick downturn,” she said.
HedmanWestenskow’sbackgroundisnotinbusiness.
She studied English literature at Utah Valley State Uni-
versity, and later paralegal studies at UC Santa Barbara.
Before taking the reigns as CEO, Hedman Westenskow
workedalongsideherdadinvariousrolesatThermaPure
— most recently as the director of the company’s legal
department.
After just two months on the job as a young CEO and
settling into her new office, Hedman Westenskow said
shelearnsnewthingsaboutherdadeveryday.Occasion-
ally, while cleaning the office, she’ll find notes or papers
that influence the way she sees the technology.
“Since he’s passed, I draw on that literature back-
ground because even though Aristotle and Shakespeare
are dead, we still learn so much from them,” Hedman
Westenskow said. “Even though I really miss my dad, as
I’m doing his old job I think about things he did, that I
didn’t appreciate then, that I appreciate more now. “
Later, in the parking lot, she shrugged her shoulders
and said that, as she lives longer, she knows loss is some-
thing she’ll have to confront more.
While she’s struggling to come to grips with why her
fatherdied,HedmanWestenskowstillhasastrongvision
for what she wants ThermaPure to become.
A large part of that vision is expanding ThermaPure
to new parts of the country by building on relationships
her dad forged.
ThermaPurelicensesitstechnologytoabout50licens-
ees throughout the U.S., 14 of which are in California.
The company also has a handful of customers in Florida,
Texas and Virginia and a few other states. Three employ-
eesworkforthecompanyfull-time,thoughseveralmore
serve as part-time consultants.
She and Perez also want to fend off competitors that
arereplicatingthecompany’stechnologyandinfringing
on its patents for structural pasteurization.
“I think I understand the importance of the Internet
more than my dad and how emerging technologies can
bring our ThermaPure process forward,” Hedman West-
enskowsaid.“We’vechangedourlicensingprogramand
we’ve really focused on trying to reach more people and
get this technology out to the whole country.”