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Ten years ago, Pharmavite Corp. moved its manufacturing operations to San Fernando riding an early boom in the vitamin market. At the time, the company could barely fill the 300,000 square feet it had leased. Now, that plant is bursting at the seams. Later this year, the company will move its 500-plus manufacturing employees from the city of San Fernando to a 740,000-square-foot business complex in Santa Clarita, one of the biggest leases ever signed in L.A. County. The ’90s have seen a dramatic increase in the acceptance and use of herbal supplements. Over the last four years, nutritional supplement sales have increased nearly 40 percent nationwide, from $5.8 billion in 1995 to $8.8 billion in 1998. Companies in the San Fernando Valley have benefited considerably from the boom. Although there are plenty of supplement makers in other parts of the country, Los Angeles and specifically the Valley is home to several of the older and better-established ones. Chatsworth-based Natrol Inc., for example, has enjoyed a sales growth rate of at least 30 percent in eight of the last 10 years. Then there’s Natren Inc. in Westlake Village, which has seen revenue growth of 10 percent to 20 percent a year since it was founded 16 years ago to sell “probiotics” bacteria that allegedly helps combat cancer and yeast infections. But Pharmavite is by far the biggest supplement maker in the Valley and its sales have grown as fast as the industry itself. Revenues for 1999 are expected to reach $500 million, more than double the number of five years ago. It’s been a long road since a pharmacist and salesman opened the company in North Hollywood in 1971. Vitamin sales started out slow at some regional drugstores and struggled through the ’80s. “They at first had to market quite hard,” said Tom Fourt, director of marketing for products and brands. “(Dietary supplements) weren’t something that the mass market had seen a lot of.” The boom came in 1994, when Congress passed a law loosening restrictions on dietary supplements and claims that could be made about the products, while still allowing makers of the supplements to bypass the U.S. Food and Drug Administration approval that is needed for prescription and over-the-counter drugs. That same year, Time magazine published a cover story on the health benefits of vitamins and suddenly, business for Pharmavite and companies like it exploded. Supplements usually avoid the kind of peer review in scientific journals experienced by drugs, making claims of effectiveness difficult or impossible to measure. Regardless, the public is buying in. In the last five years, Pharmavite has added dozens of new products. “St. John’s wort didn’t even exist four years ago,” Fourt said. “As the popularity of herbs has exploded, many new items have been added.” The aging population and a growing interest in staying healthy longer has played a major role in boosting the market, Fourt said. “In terms of growth, (baby boomers) tend to be the most loyal users and they understand the benefits.” In 1995, Pharmavite branched out from the vitamin market to add herbal supplements, called the Nature’s Resource line. Today the company has 150 different products in its Nature Made line of vitamins and 100 more in the Nature’s Resource line. In March, the company and retailer GNC launched a SAMe (pronounced Sammy) line of supplements, which promise mood improvements and arthritis relief in one. Pharmavite is the first company in the U.S. to market the protein, which has been available in Europe by prescription for 20 years. It drew national media attention when it hit the market, and Fourt said sales are expected to reach $60 million its first year out. The nutrient is an amino acid naturally produced by the body, though less is produced as people age. With about 20 million people using St. John’s wort for mood enhancement and another 50 million who suffer from arthritis, Fourt said the market for SAMe has tremendous potential. In June, the company will launch a time-release line of herbs that promise to last all day. Despite all the new products, Pharmavite’s 10 percent share of the vitamin and supplement market is shaky, according to analysts. The vitamin and herbal supplement market is not expected to grow as quickly this year as in the recent past, and there is an increasing number of large players making these products. Matt Patsky, managing director with Adam, Harkness & Hill, a Boston-based investment bank, said the supplement market in general is expected to slow to 5 percent growth in 1999, following several years of double digit growth. Over the last decade, growth has been between 13 and 15 percent a year. “Their brand is under pressure in terms of market share,” Patsky said. Still, he said Pharmavite is a well-managed company, and while growth might slow from the pace of past years, that doesn’t mean the company will do poorly. When Pharmavite moves its factory to Valencia Vista Business park later this year, the employee ranks, which have grown 15 percent since 1995, will also grow, Fourt said. The move will be a noticeable loss in San Fernando, though Pharmavite is the biggest employer in the city of 24,000. But because of a lack of industrial space in the San Fernando Valley and a good economy, San Fernando Economic Development Manager Sarah Magana-Withers said the city expects the space to be re-leased quickly.

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