Biotech's Soon-Shiong hiring bankers for Nant cancer drug IPO

Nanthealth

11/06/2018 12:00

By Deena Beasley
    LOS ANGELES, June 11 (Reuters) - Billionaire Patrick
Soon-Shiong plans to take an experimental cancer treatment
company public this year and has begun hiring bankers, the
biotechnology entrepreneur told Reuters.
    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.  urn:newsml:reuters.com:*:nL4N1PX513
    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. 
    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)
 ((deena.beasley@thomsonreuters.com; 213 955 6746; Reuters
Messaging: deena.beasley.thomsonreuters.com@reuters.net))