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 The former surgeon said in a recent interview that the new company,
to be called Nant, would use most of the money raised from the
initial public offering to develop a pipeline of cancer drugs,
although the amount of financing has yet to be determined.
Soon-Shiong made billions by founding and selling an injectable
drugmaker, followed by a company that developed a way to make a
chemotherapy drug more effective.
Later, he founded Culver City, California-based NantWorks, from
which he has spun off two publicly traded companies – cancer-testing
company NantHealth Inc <NH.O> and immunotherapy developer NantKwest
Inc <NK.N>.
Shares of both have fallen sharply and losses have mounted amid
questions over whether funds from his charitable foundation have
been used to drive sales. Soon-Shiong called allegations of
donations being tied to sales of a cancer diagnostic test
"completely untrue."
Earlier this year, he agreed to buy the Los Angeles Times and other
California newspapers for $500 million, but the deal has not yet
closed.
Credit Suisse has been hired to work on the Nant IPO, and Soon-Shiong
said he was in talks with two other investment banks. Credit Suisse
declined comment.
Nant's portfolio includes six compounds in clinical trials against
nine tumor types. The pipeline includes versions of existing
chemotherapy drugs designed to make tumors more recognizable to the
immune system, methods of delivering cancer-fighting cells to
tumors, and immunotherapies.
Soon-Shiong believes a multi-drug regimen could help cancer patients
achieve long-term remission.
"Everybody is focusing on one little piece of the puzzle," he said.
"But the tumor is too smart. It has too many fail safes. We need to
attack the entire tumor system."
At least two of Nant's drugs are in late-stage trials: Ganitumab, an
antibody licensed from Amgen Inc <AMGN.O>, blocks a receptor linked
to cell growth and is being tested in combination with chemotherapy
for advanced sarcoma patients.
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Another compound, N-803, targets a protein involved in activating
immune system cells and is in late-stage development for bladder
cancer.
NANTHEALTH AND NANTKWEST
Shares of NantHealth have fallen to $3.41 from their IPO price of
$14 in 2015. The company reported a first-quarter loss of around $22
million.
NantKwest trades at $3.66, down from $25 when it debuted in 2016,
and reported a quarterly net loss near $27 million.
Jefferies analyst Biren Amin rates shares of NantKwest as "hold."
Citi Research has a "sell" rating on NantKwest and estimates the
company has enough cash for two years of operations. Soon-Shiong
said NantKwest was exploring "strategic partnerships" to fund
clinical trials. He owns controlling stakes and holds the chief
executive office of both companies, and will be a majority
shareholder in Nant.
Health news website STAT reported last year that Soon-Shiong and his
charitable foundations in 2014 gave the University of Utah $12
million for disease research, and the university later paid
NantHealth $10 million for testing services.
Utah's legislature determined that the university should have sought
competitive bids for the testing, but said the donation was not tied
to the purchase.
Soon-Shiong said of the Utah case: "That was a donation our
foundation made to the University of Utah. They had an opportunity
to go to any vendor, and they came to us."
(Reporting by Deena Beasley; Editing by Rosalba O'Brien and Peter
Cooney)
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