 |
| NantWorks founder Patrick Soon-Shiong |
NantWorks, the nebulous empire of biotech billionaire Patrick Soon-Shiong, is handing over $90 million to partner Sorrento Therapeutics ($SRNE) in exchange for a Phase III cancer drug heralded as a successor to the blockbuster Abraxane.
Under the deal, Soon-Shiong's company will pay $90 million up front for Sorrento subsidiary Igdrasol and the rights to Cynviloq, a spin on Celgene's ($CELG) Abraxane that uses similar nanoparticles and the same cancer-killing ingredient but, according to Sorrento, can be delivered more efficiently and sold at a lower cost. NantPharma, a subsidiary seemingly created just for the Cynviloq deal, is promising Sorrento another $600 million in potential payments tied to regulatory milestones and up to $600 million more if the drug meets its sales goals.
Cynviloq is in the midst of a Phase III study in breast and lung cancers with the goal of demonstrating bioequivalence to Abraxane, which uses the protein albumin to deliver a targeted blast of paclitaxel and kill tumors. Earlier this month, Sorrento said an early look at the trial's pharmacokinetic data "suggests" Cynviloq is hitting the mark on bioequivalence, a vague pronouncement that was enough to send its shares up about 10% and, apparently, convince Soon-Shiong to take the plunge on the drug.
The bull case for Cynviloq is based on Sorrento's belief that success in a single bioequivalence trial could be enough to convince the FDA to approve the drug through its 505(b)(2) pathway, which would allow the company to use old Abraxane data in its application. Soon-Shiong helped invent Abraxane at Abraxis BioScience before selling it to Celgene for $3 billion, and the drug grossed $848 million in sales last year. Now Sorrento believes handing over Abraxane's heir is the best path forward for all parties, CEO Henry Ji said.
"This major transaction will enhance Sorrento's mission of bringing innovative therapies to patients in need quickly and efficiently," Ji said in a statement. "It puts our lead program into the hands of a team that has the experience, commitment and resources to develop and launch a major cancer drug."
The deal follows a series of tie-ups between Sorrento and Soon-Shiong's ever-expanding fleet of subsidiaries. In December, the pair combined to form NantiBody, a joint venture to develop cancer immunotherapies with $20 million in seed funding. Months later, Soon-Shiong's NantCell paid $10 million in cash and $100 million in equity to use Sorrento's antibody discovery platform to develop oncology treatments of its own, promising the biotech royalties on any successful products.
The unveiling of NantPharma adds another tenant to Soon-Shiong's crowded house of biotech ventures, sitting alongside NantBioScience, which raised $100 million this month for its Celgene-partnered R&D projects; the aforementioned NantCell and NantiBody; and NantOmics, a molecular diagnostics venture. Soon-Shiong has long said the underlying goal of his expansive startup farm is to unite cloud computing, genomic analysis and targeted drug development to create an end-to-end oncology system that can eventually manage a patient's cancer much like the industry currently handles chronic disease.
Underpinning Soon-Shiong's expansive vision is NantHealth, which he calls "the Google of genome mapping." But a pair of former employees have alleged that Soon-Shiong's empire is founded more on savvy marketing than actual innovation, claiming in a lawsuit that NantHealth has repeatedly violated federal regulations, endangered patient privacy and misled the public about what its technology can do. For its part, the company has said the lawsuit is "baseless" and "filled with inaccuracies and false statements," dismissing the plaintiffs as disgruntled ex-employees out to smear NantHealth.
- read the release
Special Report: The 25 most influential people in biopharma in 2015 - Dr. Patrick Soon-Shiong