A vice president of Memorial Sloan Kettering Cancer Center has to turn over to the hospital nearly $1.4 million in light of a series of for-profit deals and industry conflicts at the cancer center that has forced it to re-examine its corporate relationships.
A vice president of Memorial Sloan Kettering Cancer Center has to turn over to the hospital nearly $1.4 million of a windfall stake in a biotech company, in light of a series of for-profit deals and industry conflicts at the cancer center that has forced it to re-examine its corporate relationships.
The vice president, Dr. Gregory Raskin, oversees hospital ventures with for-profit companies. As compensation for representing the Manhattan-based hospital on the biotech company’s board, Raskin received stock options whose value soared when the startup went public a little over a week ago.
The move to hand over his stake is one of several steps underway as the cancer center tries to contain a crisis that has led to the resignation of its chief medical officer and a review of its conflict-of-interest policies. Several board members and some executives of the nonprofit institution have maintained close ties to the health and drug industries at a time when stunning cancer breakthroughs are generating excitement among investors and spawning a flurry of biotech startups.
At other cancer centers and research institutions, employees are barred from accepting personal compensation when they represent their institution on corporate boards. But Memorial Sloan Kettering had no such prohibition until now.
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Raskin has been involved with the startup, Y-mAbs Therapeutics, since 2015, when he signed off on the deal with Memorial Sloan Kettering, where the company’s experimental treatments for children with cancer have been developed. His vested stock options are worth about $675,000, at least on paper. Stock options that will vest in the future are worth about $616,000 more. In addition, shares he had personally purchased earlier at a discounted price are now worth about $106,000 more than he paid for them.
After The New York Times and ProPublica asked about Raskin’s compensation, Memorial Sloan Kettering said it would change its policy so that he and other employees in similar roles would not profit personally from such arrangements, and that all proceeds would revert to the hospital and its research.
The hospital itself has an equity stake in the company of 8.45 percent, which is worth $73 million.
On Friday, the cancer center issued a memo to thousands of employees, announcing that it would restrict some interactions with for-profit companies. It said it was imposing a moratorium on board members investing in or holding board positions in startups that originated with Memorial Sloan Kettering.
For now, the moratorium on board investments only applies to new deals, the hospital said. It would not affect the exclusive deal the hospital made with an artificial intelligence company, Paige.AI, to license digital images of 25 million tissue slides. Three insiders, including a member of Memorial Sloan Kettering’s executive board, were company co-founders, and three other board members were investors. Staff turmoil over the deal caused Dr. David Klimstra, chairman of the pathology department, to announce that he would divest his equity stake in Paige.AI.
The proposed policies stopped short of barring hospital executives from receiving compensation for their work on outside boards, although officials have said that is a move they are considering. Dr. Craig Thompson, the cancer center’s chief executive, sits on the board of the drugmaker Merck. Dr. José Baselga, the chief medical officer who resigned under fire this month after an article in The Times and ProPublica about his undisclosed industry ties, sat on the board of the drugmaker Bristol-Myers Squibb and Varian Medical Systems, a manufacturer of radiation equipment. He resigned both positions after he stepped down from his role at the hospital.
In an email, Raskin said that all his compensation for work with Y-mAbs “is being committed to Memorial Sloan Kettering and the amazing work we do.”
Christine Hickey, a spokeswoman for Memorial Sloan Kettering, said Raskin brought the matter to hospital leadership Sept. 21, the same day that Y-mAbs began trading publicly and a day after the article about Paige.AI was published online. She said he had fully disclosed his ties to the company, as required by the hospital.
Y-mAbs, based in New York, was formed around immunotherapy treatments developed by the lab of Dr. Nai-Kong V. Cheung, a pediatric oncologist at Memorial Sloan Kettering. As part of a commercialization agreement, he received a stake worth $64.5 million on Friday. Researchers whose discoveries lead to new drugs are not covered by the new policy.
With help from those promising therapies, the company’s market value has skyrocketed to nearly $867 million.