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Monday, Oct 3, 2022

Soon-Shiong Plans Nant IPO

Billionaire cancer physician Patrick Soon-Shiong plans to merge pharmaceutical startups under his NantWorks Inc. umbrella into a single entity called NantBio and take the company public next year.

The new venture, according to Soon-Shiong, is valued at more than $8 billion based on equity investments from Blackstone Group, Celgene Corp., Amgen Inc., and the Kuwait Investment Authority, as well as Soon-Shiong’s investment vehicles Nant Capital and California Capital.

The businesses forming NantBio would include NantBioscience, NantOmics, and NantCell. The public companies that grew out of the Culver City-based Nant empire, NantKwest Inc. and NantHealth Inc., would remain separate along with Soon-Shiong’s nonpharmaceutical entities: NantMobile, NantStudio, NantCloud, and NantShield.

“We’re going to launch NantBio, and it will surprise the country because it will be the most comprehensive immuno-oncology company on the planet,” Soon-Shiong said in a recent interview. “We anticipate launching by 2018 maybe six or seven Phase 3 registration trials and taking the company public.”

NantBioscience specializes in protein-based drug development, NantOmics focuses on DNA sequencing, and NantCell emphasizes cell-based therapies.

When grouped together, the combined company would have two drugs in Phase 3 trials with the Food and Drug Administration, 21 in Phase 2, and 26 in Phase 1, according to Soon-Shiong. It would also count 63 molecules in the pre-initial new-drug application stage.

Soon-Shiong would take an 85 percent stake in NantBio, which he said was the culmination of 10 years of work to develop the tools necessary “to fully interrogate the human body in real time.” The company has yet to submit any filings to the Securities & Exchange Commission or the California secretary of state.

The South Africa native’s latest project is part of an ambitious plan to find an effective remedy for cancer and remake the U.S. health care system. If he’s unable to accomplish his goals in the next several years, Soon-Shiong said he would leave Los Angeles and try his luck back home in South Africa.

“I’ve tried to change health care in this country since 2008, and I’m going to try from here until 2020,” he said. “If I can’t make it work here, I’m going to leave and do it in South Africa.”

Rocky year

The value of Soon-Shiong’s business empire gives him an estimated net worth of $18 billion, putting him atop the Business Journal’s 2017 list of Wealthiest Angelenos. The doctor made his fortune selling pharma firms American Pharmaceutical Partners and Abraxis BioScience in 2008 and 2010, respectively, through which Soon-Shiong pocketed more than $9 billion.

The valuation of Soon-Shiong’s private NantWorks subsidiaries more than compensated for the recent hit he took from NantKwest and NantHealth, which suffered amid a slump in biotech on the public market.

NantKwest closed its first day of trading in 2015 at $30.60 a share, while NantHealth’s June public market debut saw its stock close at $18.59 a share. Both are now trading just above $3 a share – a 90 percent fall for NantKwest and 82 percent drop for NantHealth. NantHealth also announced earlier this month that Robert Watson, its president, planned to step down and become a consultant to the company.

Soon-Shiong was also stung by reports that a $12 million donation he made to the University of Utah was used to pay for as much as $10 million in services performed by NantHealth. He has denied any wrongdoing associated with the transaction.

On a more positive note, NantKwest’s stock rose about 9.2 percent on May 9 after news that the FDA authorized its investigational new-drug application for a cancer vaccine, the first step in the agency’s drug review process. The proposed vaccine is part of Soon-Shiong’s Cancer Breakthroughs 2020 initiative, which aims to develop a vaccine-based immunotherapy for cancer.

But NantKwest has also experienced recent setbacks. The company on May 3 lost its appeal to secure a patent for a cancer therapy that uses natural killer cells after a judicial panel upheld a lower court ruling.

NantBio is taking its first steps amid a rocky climate for biotech growth. Only seven biotech companies have gone public so far this year. About 40 had IPOs in 2016, the smallest amount since 2012, according to media reports.

“For biotech, 2016 was one of the most painful years in recent history,” Bloomberg analyst Asthika Goonewardene wrote in a March report. “The gap between price targets and the actual prices of biotech stocks widened in early 2016 to levels not seen for six years.”

The challenges might continue this year, he added, partially due to uncertainty over drug pricing. Investors willing to ride it out for the long term, however, might be interested in snapping up shares at rock-bottom prices.

Some companies have managed to sail above the turbulence. Kite Pharma Inc., a Santa Monica-based developer of cancer immunotherapy drugs, saw its stock climb 64 percent over the past year to close at $74.98 on May 10.


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