Billionaire Soon-Shiong’s NantKwest surges 39% in first day of trading
Patrick Soon-Shiong — pharmaceutical entrepreneur, part owner of the Lakers and the wealthiest man in Los Angeles — just got a little richer.
The stock of Soon-Shiong’s cancer treatment company, NantKwest Inc., surged 39% in its first day of trading Tuesday. It closed at $34.64, up $9.64 from its opening price but down from its high for the day of $38.48.
Based in Los Angeles, NantKwest is developing treatments for cancer and other diseases using “natural killer cells,” which target and destroy tumors.
The company, which does not yet have an approved drug, is initiating a Phase 2 clinical trial to use its cells as a treatment for Merkel cell carcinoma. It has the capability of creating an “endless supply” of killer cells that would be injected into patients to treat many types of cancer, said Soon-Shiong, NantKwest’s chief executive and chairman.
The company raised about $207 million by selling 8.3 million shares at $25 apiece Tuesday. NantKwest will use the money to fund research and development.
“I’m pleased that investors and shareholders see value in the platform,” Soon-Shiong said. “It’s very early times for us, but this has literally been decades in the making.”
Soon-Shiong would not say when the company might gain regulatory approval for its cancer therapies. “It’s way too early to speak about that,” he said.
One analyst said it could be two years or longer.
“It’s still fairly early,” said Boris Peaker, a biotech analyst with Cowen & Co. “This has not been investigated in large clinical studies.”
Investors probably were attracted to the company because of its novel approach to cancer treatment and because of Soon-Shiong’s track record, Peaker said.
“Immuno-oncology is a hot area in general and there’s a lot of people that want to own companies in that space,” Peaker said. “Patrick is a successful biotech entrepreneur. When people look for who to invest with, having somebody who’s a local billionaire and seems to believe in this is an encouraging sign.”
Soon-Shiong, whose net worth Forbes pegged at $12 billion, made much of his fortune by creating the cancer drug Abraxane, which was approved by the Food and Drug Administration in 2005. Biotech company Celgene bought Abraxane’s parent company in 2010 for $4.5 billion.
The son of a Chinese practitioner of traditional herbal medicine, Soon-Shiong grew up in South Africa, earning his medical degree in Johannesburg. At age 31, he came to UCLA as a surgeon and medical professor.
In 2010, Soon-Shiong bought Magic Johnson’s 4.5% ownership interest in the Lakers for an undisclosed price. A longtime Lakers season ticket holder, Soon-Shiong constructed an indoor basketball court at his Brentwood home. On Tuesday, he described natural killer cells as the “point guard” in the body’s defense against disease.
NantKwest’s successful debut on Wall Street added to Soon-Shiong’s sizable fortune. He owns about 40.5 million shares of the company’s stock, according to a regulatory filing. Those shares would be worth about $1.4 billion at Tuesday’s closing price.
The medical entrepreneur has been a big player in local philanthropy. His charitable efforts have included a $135-million donation to renovate St. John’s Health Center in Santa Monica and a $100-million guarantee he provided to University of California regents to underwrite the reopening of Martin Luther King Jr. Hospital.
Soon-Shiong, who turns 63 on Wednesday, has his sights set on yet another IPO this year.
He told The Times he intends to take his medical records company NantHealth public by the end of this year. NantHealth of Culver City says it will combine medical data and patients’ genetic information to find individualized treatments for cancer and other diseases.
Last month, Allscripts Healthcare Solutions Inc. agreed to pay $200 million for a 10% stake in NantHealth, valuing the firm at $2 billion.
Soon-Shiong is also investing $100 million of his personal wealth in Allscripts, which is based in Chicago. The financial investments strengthen the partnership between the two companies, Soon-Shiong said.
Analysts believe the new partnership benefits both companies by combining Allscripts’ medical data with NantHealth’s expertise with genetics.
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