But in another sense, the decision was a long time coming for Soon-Shiong, who has maintained top executive roles in a growing roster of have expanded.
His NantWorks family of health care/biotech businesses now has nine companies, including two that are publicly traded, Nant-Kwest and NantHealth Inc.
He also has his hands full with the Los Angeles Times and several related publications, which he purchased from the newspaper’s parent company, Tronc, in early 2018.
And in recent months, Soon-Shiong has plunged two of his companies — NantKwest and ImmunityBio Inc. — into the intense global race to develop effective therapeutics against the coronavirus that causes Covid-19.
The companies are part of the Trump administration’s Warp Speed program to rapidly develop vaccines and treatments to combat the virus, and in October the companies announced they were beginning clinical trials of their vaccine candidate at Hoag Hospital in Newport Beach.
This most recent effort apparently served as the trigger for the leadership transition at NantKwest, at least according to incoming Chief Executive Adcock. In an interview with the Business Journal last week, Adcock said Soon-Shiong wants to devote more of his energy to the fight against the coronavirus.
“When Patrick (Soon-Shiong) called me to offer me the position, he said he wanted to focus his energy on the deep science and research to develop treatments for many of the diseases that have proven so troublesome, most especially Covid-19,” Adcock said. “He said he wanted me to focus on growing and scaling up this company.”
Soon-Shiong has now become NantKwest’s executive chairman and remains its majority shareholder, with roughly two-thirds of all common shares under his control.
His spokeswoman said last week that Soon-Shiong was busy with the vaccine trial and other work related to the battle against Covid-19 and was not available for comment on the changes at NantKwest.
That Soon-Shiong would not have as much time to run and grow NantKwest as he would like should not come as a surprise, according to one local health care market analyst.
“A billionaire founder usually will not have the bandwidth to run the daily activities of a biotech company, especially Dr. Soon-Shiong who has multiple projects seemingly at all times,” said Sahak Manuelian, managing director and head of equity trading for downtown-based Wedbush Securities Inc.
“These companies require a lot of attention and detail work from not only a scientist type personality, but one who is a manager or has a successful track record in being able to get early and mid-stage biotech companies to the finish line,” he added.
Whatever the case, investors did not take kindly to the news of the leadership transition, which was announced after market close on Oct. 26. Over the next two trading days, NantKwest shares fell a cumulative 17.4%, to close Oct. 28 at $7.46, far outpacing the overall market drop on those days.
Long relationship
Soon-Shiong turned to Adcock because of the long working relationship that the two executives have had through a variety of roles and difficult circumstances. They first worked together about eight years ago, when Adcock was chief innovation officer for Sanford Health, a nonprofit health system based in Sioux Falls, S.D.
Adcock negotiated a technology licensing agreement at that time with Soon-Shiong’s NantWorks.
For the last several years, Adcock helmed Verity Health System, a financially struggling hospital chain that was based in El Segundo. He convinced Soon-Shiong’s NantWorks to invest more than $300 million in Verity as part of a recapitalization effort. Integrity Health, a management company majority-owned by Soon-Shiong, then was brought in to run the company.
But all that effort wasn’t enough to rescue Verity, which filed for Chapter 11 bankruptcy protection in 2018 with Soon-Shiong’s NantWorks listed as Verity’s largest creditor.
Earlier this year, as part of the winding down of the company through bankruptcy proceedings, Verity’s hospitals were sold off to a number of separate buyers. Locally, Ontario-based Prime Healthcare Inc. in April purchased St. Francis Medical Center in Lynwood for more than $350 million. And Soon-Shiong purchased the shuttered St. Vincent Medical Center in Westlake for $135 million.
Often during bankruptcy proceedings, the relationship between creditor and debtor gets strained, but Adcock said that wasn’t the case with Soon-Shiong.
Indeed, just a few weeks after the last transactions related to the bankruptcy proceeding closed, Soon-Shiong placed that call to Adcock, asking him to take the helm of NantKwest.
Adcock told the Business Journal that he has two near-term goals as NantKwest’s new chief executive: to continue the company’s work on developing “natural killer” immune cells to treat various types of cancers and to continue the company’s work on developing the vaccine candidate and other therapeutics to treat Covid.
“On the Covid treatment, ImmunityBio has taken the research lead, but NantKwest’s role is to do the natural killer cell manufacturing to bring the treatment to reality,” Adcock said.
