L.A. biotech billionaire Patrick Soon-Shiong’s diagnostics company, NantHealth Inc., reported this week it lost $184 million last year, largely due to lagging sales of its much-touted GPS Cancer diagnostic test.
The report released Thursday says NantHealth experienced a 72 percent net revenue increase in 2016 for a total of $100 million. The company spent nearly $62 million on research and development, as well as other reported expenses, which resulted in the net loss of $184 million.
Culver City-based NantHealth reported that 264 physicians ordered the GPS Cancer test, which analyzes tumor genetics and recommends possible courses of treatment in 2016. In a conference call with investors, Soon-Shiong reportedly said the numbers indicated that adoption of the new tool is “now beginning to take hold.”
The report belies his enthusiasm, however. The number of tests ordered dropped in the last few months of 2016: NantHealth reported 524 orders in the third quarter of 2016 and 452 in the fourth quarter. The company blamed some of its loss on, “delay in the sales growth of the GPS test compared with company expectations.”
“We expect to incur operating losses over the near term as we drive adoption of GPS Cancer, expand our commercial operations, and invest further in NantHealth solutions,” the report said.
This isn’t the first time NantHealth and its GPS Cancer test have faced difficulties.
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Earlier this month, reports surfaced that Soon-Shiong had made a $12 million donation to the University of Utah for genetic research into rare diseases in 2014, but the university later paid $10 million of that amount to NantHealth to conduct genetic sequencing, including orders for the GPS Cancer test. The deal has raised questions about Soon-Shiong’s motivations in making the donation and caused the company’s stock to drop.
NantHealth’s stock also fell Friday morning on the heels of Thursday’s post-trading financial report. The company’s per-share value dropped to $4.37 from its $5.09 close, but rebounded to end the day at $4.95 a share.
The company’s stock was down from $7.64 on March 1 and from $18.59 when it went public June 2.
NantHealth offered no additional comment on the report Friday.
Soon-Shiong, who topped the Business Journal’s 2016 list of wealthiest Angelenos with a net worth of $15.4 billion, also owns about a quarter of tronc, the owner of the Los Angeles Times, and has been in a battle to take further control of the company.
Contact media and entertainment reporter Diane Haithman at firstname.lastname@example.org. Follow her on Twitter @dhaithman for the latest in L.A. business news.