Patrick Soon-Shiong caught his first glimpse of Los Angeles from the crest of the Sepulveda Pass nearly 35 years ago.
“I drove down from Vancouver in a U-Haul truck,” Soon-Shiong said. “I hit the 405 and I had never seen a freeway with eight lanes, 10 lanes, and I said, Where the heck am I? The enormity and the beauty of the place at the same time hit me.”
It was 1983, and the South African son of Chinese parents was, like millions of others in Southern California, an immigrant of modest means in search of opportunity. He was making $27,000 a year – a sum he thought lavish – splitting time between an assistant professorship at UCLA and a research position at the then-VA Wadsworth Medical Center in West Los Angeles.
Three-and-a-half decades later, the surgeon-turned-biotech mogul has sold two companies for multibillion-dollar sums and founded a third for which he serves as chief executive, NantWorks of Culver City. Soon-Shiong said in an April interview that NantWorks is worth $8 billion based on a valuation drawn from outside investments.
That sum, coupled with proceeds from the previous company sales along with other investments, placed Soon-Shiong atop the Business Journal’s List of Wealthiest Angelenos for the ninth consecutive year, with an estimated net worth of $18 billion. (See page 18.)
The doctor and entrepreneur said he plans to take the bulk of the sprawling company public next year as NantBio to raise capital and further his goal of curing cancer and transforming the American health care system by 2020.
While the hard-driving billionaire is an almost singular success story, his place as an immigrant entrepreneur in Los Angeles is shared with millions of others. More than one-third of Los Angeles County’s 10 million residents are foreign born and they accounted for 51.5 percent of all self-employed workers in the region in 2014, according to a study released in February by the Los Angeles Area Chamber of Commerce.
Immigrants also make up one-quarter of the billionaires living in Los Angeles. Tesla Inc. founder and Chief Executive Elon Musk – also born in South Africa – holds the No. 2 spot with an estimated net worth north of $14 billion. He and Soon-Shiong are joined on the wealthiest list by 13 others, people who first called China, Hungary, Egypt, Israel, South Korea, Iran, France, Lebanon, Saudi Arabia, or Canada home.
National debate At a time when immigration is at the forefront of the political debate in Washington, the jobs, tax revenue, cultural influence, and philanthropic contributions of foreign-born residents in the nation’s largest metropolitan area are difficult to ignore. From a purely fiscal perspective, the area’s immigrant population generates a staggering amount of economic activity: some $233 billion in 2014, according to the chamber study, or almost 36 percent of the region’s entire gross domestic product.
Linda Lopez, head of the city of L.A.’s Office of Immigrant Affairs, said 65 percent of new businesses in the city are started by immigrants. The city’s ability to stay competitive as a job market is tied to entrepreneurs such as Soon-Shiong and Musk.
“For a place like Los Angeles to continue to be a hub for innovation, it’s important for immigrants to continue to come here and contribute,” Lopez said. “The economic growth we’ve seen can, in large share, be attributed to immigrants building companies here.”
Despite a shift toward anti-immigration policies under the administration of President Donald Trump, the United States remains a role model for many other countries, according to John Emerson, who was the U.S. ambassador to Germany from 2013 until January.
“Something I was constantly talking to the Germans about was all the U.S. Fortune 500 companies that were started by immigrants,” Emerson said. “If you come to the United States, the path to citizenship is much more viable than in almost every European country, and that is hugely important as an incentive to get immigrants to integrate. In terms of economic migrants, I think Europe has a lot to learn from us.”
Yet Germany’s handling of the Syrian refugee crisis and the country’s proactive steps to integrate immigrants displaced by wars in the Middle East made Emerson realize America could lose its position as the global destination of choice.
“In terms of refugees, the U.S. clearly has a long way to go,” he said. “We’re losing out on some of the immigrant entrepreneurial energy by not allowing in more refugees.”
Lopez said L.A. city leaders are trying to offset some of the anti-immigrant sentiment fomented by Trump.
“Despite what’s happening at the national level, we will continue to move forward and advance programs supporting immigration and immigrants in Los Angeles,” she said. “For the mayor, it’s really important that immigrants are included in our initiatives and that they thrive economically.”
The immigrant billionaires on the list are clearly thriving already, having enjoyed incredible success in a broad swath of industries.
Haim Saban, a native of Egypt who came to the United States from Israel in 1983, made a bet on a quirky Japanese television program, which ultimately became the “Power Rangers” franchise. The success of the monster-fighting, spandex-clad ninjas helped vault his estimated net worth to $4.3 billion this year.
Married couple Do Won and Jin Sook Chang, both born in South Korea, started fast-fashion giant Forever 21 in 1984 out of a 900-square-foot storefront in Highland Park and turned it into a retail behemoth with estimated revenue of more than $4 billion in 2016. The success of the brand has made the Changs, with a net worth calculated at $3.4 billion this year, a fixture among L.A.’s wealthiest.
Private equity investor Alec Gores came to the United States from Israel with his family as a 15-year-old in 1968 and started his professional career bagging groceries for 25 cents an hour in Flint, Mich., before coming to Los Angeles and starting Gores Group. The buyout specialist, whose brother Tom is also on the wealthiest list, now has a fortune of some $2.63 billion.
Jeffrey Skoll, one of three Canadians on the list and the first employee at eBay, turned his tech fortune into a burgeoning media empire headlined by his stake in Participant Media, the studio behind 2016 Best Picture winner “Spotlight.” Skoll also partnered with another L.A. billionaire on the list, Steven Spielberg, to form Amblin Partners, helping his overall wealth reach $2.87 billion this year.
Nicolas Berggruen, a Paris-born investor with dual U.S.-German citizenship, settled in Los Angeles after an itinerate career as a private financier. His Berggruen Institute think tank – a project he’s described as a “secular monastery” – was funded through a $500 million endowment donated by Berggruen himself. Even after that gift, his wealth is estimated at $1.9 billion.
Other immigrant entrepreneurs on the list this year include Sean Parker ($9.07 billion, Canada), John Tu ($8.95 billion, China), Steven Udvar-Hazy ($5.11 billion, Hungary), Neil Kadisha ($1.89 billion, Iran), Ray Irani ($1.55 billion, Lebanon), Shane Smith ($1.08 billion, Canada), and Bassam Alghanim ($1.12 billion, Saudi Arabia).
Soon-Shiong said the recent backlash against immigrants is misguided and would only harm the country’s prospects going forward.
“The innovation this country spawns is the only way I think that America continues to be the leader of the world,” he said. “We still have the best universities, and I think it’s crazy that (foreigners) come here and we train them as masters and PhDs and then we kick them out. That’s ridiculous.”
The number of highly skilled international students who can’t get a U.S. work permit after graduation continues to grow. In the 1985-86 school year, when Soon-Shiong was an assistant professor in the surgery department at UCLA, there were only about 342,000 international students in the United States, according to the National Center for Education Statistics. By the 2015-16 academic year, that number had tripled to more than 1 million.
Compounding the issue, there’s a hard cap of 85,000 visas for highly skilled workers – known as H-1B visas – issued each year through a lottery. This year, 199,000 applications were filed within five days, the fifth consecutive year the cap was reached within that time frame, according to U.S. Citizenship and Immigration Services. As a result, the application pool is so competitive that many international students return to their home country or head somewhere else.
The visa crunch is not likely to ease under the Trump administration. The president signed an executive order in April aimed at reforming the H-1B program with the goal of ensuring more companies “hire American.”
But for those who do stay, finding a community – whether ethnic, academic, religious, or otherwise cultural – can be a key part of building bridges and planting roots in a new land.
Soon-Shiong remembers fondly the connections he made when he and his wife, Michelle Chan, moved to Los Angeles from British Columbia.
“What stood out was the spirit of the community in this little apartment building with a little garden on Veteran Avenue,” he said. “No matter what, I would walk home and there would be somebody there at night that I could commune with. That was my first year in L.A. and amazingly one of the happiest, because it was all excitement at figuring out how are we going to get through the day.”
Soon-Shiong’s other network back then – and one that he still leans on today – was the scientific community in Los Angeles.
“My community (became) my scientists from the Jet Propulsion Lab, UCLA, USC, and Caltech,” he said. “The proximity – we’ve never moved more than five miles from UCLA for all my (time here) – created a cauldron of collaboration that has spawned amazing breakthroughs.”
While not all immigrant entrepreneurs have access to top-tier research facilities or the scientific aptitude to create cancer-fighting drugs, the city of L.A.’s Lopez said they do possess an almost universal thirst for basic business skills. To address the demand, the city has implemented programs with the Mexican Consulate in Los Angeles to educate immigrants about raising capital and provide strategic advice for getting a company off the ground.
“There’s a lot of interest from immigrants in how to get a loan and how to create a real business plan,” she said. “These programs help people both start and expand their businesses.”
But capitalism is a sink-or-swim proposition, and for Soon-Shiong, risk-taking is ultimately what defines the immigrant experience and distinguishes the United States from other countries.
“This is a country of dreamers, and it really supports entrepreneurs and facilitates those dreams,” he said. “South Africa sadly has no resources, and Canada and England and Europe – the risk-taking there is significantly less. Here people actually take risks on you … (and) we took risks on ourselves.”
The doctor’s latest gambit, consolidating his NantWorks empire in preparation for a public offering as NantBio next year, seems to have him back on message after a tumultuous year.
Not one to play it safe, Soon-Shiong continues to take risks, ones that have led him into a public battle over control of tronc Inc., owner of the Los Angeles Times, and over his Cancer MoonShot 2020 initiative. That effort, announced last year, came under fire after trademark litigation and confusion with a federal program initiated by former Vice President Joe Biden and was renamed Cancer Breakthroughs 2020. In addition, he has been stung by reports that his charitable organizations made donations that found their way back to for-profit entities he controls, allegations Soon-Shiong has called “maliciously false.”
As he preps to roll out NantBio as part of his final push to cure cancer and fix the U.S. health care system, Soon-Shiong must convince politicians on both sides of the aisle to work together, no easy task, even for an ambitious billionaire.
“I was saddened that we had this big fight,” he said of the effort to repeal the Affordable Care Act this year. “There needs to be change with regards to this health care bill in the sense that we can’t leave anyone behind.”
Immigrants would be among the biggest beneficiaries of continued health care reform. Last year, 21 percent of uninsured persons were immigrants, according to a study by the Kaiser Family Foundation, even though the immigrant population in the United States represents just 13 percent of the whole.
Soon-Shiong said California could lead the way in the effort despite regulatory challenges in the state.
“I believe California could lead and take the indigent, the poor, the Medicaid population together with the self-insured and the wealthy of Beverly Hills and the national employers and create an amazing integrated health system for the dense population we have and create a pilot that will lead the nation to show that health coverage is not health care,” he said. “Everybody needs access.”
However, if the doctor does not succeed in this endeavor by the next presidential election, it could signal the end of Soon-Shiong’s presence on the Wealthiest Angelenos list – and in Los Angeles.
“I’ve tried to change health care in this country since 2008, and I’m going to try from here until 2020. If I can’t make it work here, I’m going to leave and do it in South Africa,” he said. “So that is what I think my job is for the next four years. I think I can do it, and L.A. has given me that opportunity.”
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