Said to be America’s richest doctor, Los Angeles billionaire Patrick Soon-Shiong also is a medical innovator and a basketball nut. He doesn’t shy away from controversy either with his publicly traded biotech companies or his big stake in Tronc, owner of major U.S. newspapers.
LOS ANGELES — Said to be America’s richest doctor, Los Angeles multibillionaire Patrick Soon-Shiong also is a medical entrepreneur, anti-cancer crusader, scientist, inventor, philanthropist, visionary, negotiator and a basketball nut.
With his fortune and cutting-edge cancer research, Soon-Shiong enjoys a global status at the same time he’s increasingly woven himself into the cultural fabric of Los Angeles, where he’s one of its wealthiest residents.
Soon-Shiong has met with President Donald Trump and Pope Francis, and he’s also friends with Lakers legend Kobe Bryant and a familiar courtside presence at Staples Center after buying a minority stake in the team. He also is a major stockholder of media company Tronc, which owns the Los Angeles Times.
Early career: He has medical degrees in Johannesburg, South Africa, and Vancouver, B.C. Joined UCLA Medical School in 1983 as an assistant professor. Later became director of UCLA’s pancreas-transplant program.
On Twitter: Inspirational tweets like: “Push yourself! No one is going to do it for you”
Source: L.A. Times
But Soon-Shiong, 64, lately has been battling turbulence surrounding his business interests, which is nothing new for the South Africa native. He has faced skeptics and short-sellers — traders who bet on stock prices dropping — with his past companies, yet ended up making huge sums for himself and shareholders who stuck with him.
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This time around, two cancer-fighting startups that he took public in the last two years have racked up major losses and each of their stocks has fallen more than 70 percent from their highs.
The companies also are the target of shareholder lawsuits that allege management misled investors by artificially inflating results, claims Soon-Shiong and the companies flatly deny.
There also have been published reports that contended Soon-Shiong’s research foundations made grants that ended up benefiting his for-profit businesses or entities that have business deals with his firms. Soon-Shiong denies those claims as well and said the reports were “maliciously false.”
Beyond the health-care sector, Soon-Shiong is locked in a fight with Tronc Chairman Michael Ferro. This year, the two — Tronc’s largest shareholders — exchanged acrimonious letters through their lawyers about their stakes in the company.
It’s the battle against cancer that mainly drives Soon-Shiong, who leads a network of firms called NantWorks — Soon-Shiong calls it an “ecosystem” — that include the two he took public, NantHealth and NantKwest.
“I am driven to solve cancer in my lifetime,” Soon-Shiong, known as “Dr. Pat,” said on Twitter in March. “Despite the naysayers, skeptics, and doubters, we are making incredible progress. #SolveCancer”
In addition to his medical expertise, futuristic goals and savvy investing history, Forbes once said that Soon-Shiong also has “a deep streak of P.T. Barnum showmanship — and a talent for pissing off investors and colleagues alike.”
“I’ve seen this movie before,” Soon-Shiong said in an interview with the Los Angeles Times at NantWorks’ Culver City headquarters, referring to the events besetting his companies. “My focus should be on the fundamental progression of advancement we’re making” in developing anti-cancer remedies, he said.
Soon-Shiong — with a net worth of $8.5 billion, according to Forbes — uses Twitter both for company updates and to routinely relay inspirational messages such as “Life begins at the end of your comfort zone.”
His companies have tested investors’ comfort.
NantKwest, a biotech firm focused on harnessing the immune system to counter cancer cells, went public at $25 a share in late July 2015 and reached nearly $35 the next day. The stock then steadily declined, dropping below $4 a share this spring, but it has rebounded lately. Soon-Shiong controls 64 percent of the stock, according to the company’s latest proxy statement.
NantHealth, whose key products include a genetic test known as GPS Cancer that helps doctors prescribe the best treatments, was priced at $14 a share when it went public last June and traded as high as $18.59. But that stock now trades below $4.
NantHealth’s shares took a particular drubbing in early March. That was after Stat, a news group affiliated with The Boston Globe, reported that Soon-Shiong and his charitable foundation donated $12 million to the University of Utah for genetic-disease research, of which the college paid $10 million back to NantHealth for genetic analyses.
NantHealth disputed the assertion that the donation was made to benefit Soon-Shiong’s commercial interests and said the college was free to choose any vendor. NantHealth issued detailed statements to dispute other “multiple inaccuracies” in the Stat story and to assert that “investors were not misled.”
That didn’t stop some investors from filing lawsuits that alleged the company had reported false and inflated financial figures for the third quarter of 2016.
Then in April, the website Politico said its review of Soon-Shiong’s research foundation found that “the majority of its expenditures flow to businesses and not-for-profits controlled by Soon-Shiong himself, and the majority of its grants have gone to entities that have business deals with his for-profit firms.”
A spokesman for Soon-Shiong called the report “false and misleading,” and said Soon-Shiong “has not received any tax benefit from the $200 million of grants and commitments his nonprofits have made since 2015.”
NantHealth’s 2016 revenue rose to $100.4 million from $58.3 million in 2015, but its losses ballooned to $184.1 million from $72 million the previous year. The company said it lost an additional $41.1 million in this year’s first quarter.
Some of that red ink flows from the slow sales of its new GPS Cancer test, which the company contends enables doctors to pinpoint the best treatments based on the patient’s genes. The $11,500 test uses supercomputers and intricate software to perform genomic sequencing on a patient’s tumor.
Like many other companies selling laboratory tests, NantHealth did not need U.S. Food and Drug Administration approval to sell GPS Cancer, and it has not done the extensive scientific trials needed to convince doctors that it is worth its high price. Many insurers don’t yet cover the test. BlueCross BlueShield of Louisiana, for example, calls the test “investigational” because “there is no published evidence” of its “validity or utility.”
Asked about the insurers’ conclusions, Soon-Shiong pointed to recent trials that he said had shown benefits of the test. He said more studies were in progress.
When Soon-Shiong unveiled his cancer test with much fanfare at a health-care conference in New York in October 2013, he said that his computers could analyze a patient’s genome in just 47 seconds.
Later, when questioned further by a Forbes reporter, he pulled back and said he was aiming to do it in 24 hours. Now the company promises to send back the results “in less than 21 days,” according to its website. On May 10, during a call with investors, Soon-Shiong said doctors had ordered 365 of the tests in the first three months of the year, up from 326 in the fourth quarter of 2016.
Soon-Shiong blamed the disappointing sales on the difficulty of educating doctors about the usefulness of the elaborate test, which produces a 20-page report of detailed scientific data.
Charles Rhyee, an analyst with the investment firm Cowen & Co., said in a May 11 research note that NantHealth’s first-quarter results were “weaker than expected.” But Rhyee has a bullish “outperform” rating on the company’s stock and a 12-month price target of $8 a share, and he said NantHealth “has the potential to transform oncology diagnostics.”
Meanwhile, Soon-Shiong has been in a growing dispute over the Los Angeles Times’ owner, Tronc, which owns several other newspapers including the Chicago Tribune and San Diego Union-Tribune. Soon-Shiong initially invested in Tronc in mid-2016 to help the company fend off a buyout bid from Gannett, and has since lifted his holdings to 26.7 percent.
Soon-Shiong said his interest in a vibrant press partly stems from being born and raised in apartheid South Africa, where, he said, he “grew up under repression personally.” People of Chinese descent were not afforded all of the rights of whites, such as the right to vote, he said.
In 1991, he developed the cancer drug Abraxane, which spawned his fortune. In 2005 Soon-Shiong secured a huge victory when Abraxane was approved by the FDA. He eventually split his company and in 2008 sold the generics business, called APP Pharmaceuticals, for $4.6 billion.
Two years later he sold the business that included Abraxane, Abraxis Bioscience, to Celgene for $4.3 billion. Soon-Shiong owned about 80 percent of each of his firms when they were sold.