Is billionaire Patrick Soon-Shiong Tribune Publishing's white knight?
By Samantha Masunaga and Melody Petersen
Los Angeles Times|
May 24, 2016 at 6:00 AM
Patrick Soon-Shiong has developed a reputation for big ideas.
His boldest mission is to fix the healthcare system and turn cancer into a treatable condition using super computers, genomics and "big data."
But it's Soon-Shiong's business acumen and adept skills as a negotiator that have made him a billionaire and an outsized figure in Los Angeles.
His most recent venture is a $70.5-million investment in newspaper group Tribune Publishing, parent of the Los Angeles Times. That makes him the company's No. 2 shareholder and plunks him into the middle of the newspaper industry's liveliest takeover fight, a white knight in Tribune Publishing Chairman Michael Ferro's efforts to ward off Gannett Co.
Forbes estimates Soon-Shiong's net worth at $11.8 billion as of Monday. In building his fortune, and distributing some of it through philanthropy, the entrepreneur has steadily woven himself into the fabric of Los Angeles institutions.
After buying Magic Johnson's minority stake in the L.A. Lakers, the surgeon could be seen courtside, rubbing shoulders with pop stars such as Will.I.Am and actor Denzel Washington. When L.A. County and the University of California wanted to reopen Martin Luther King Jr. Hospital in South L.A., Soon-Shiong and his wife's foundation gave a $100-million underwriting guarantee.
Monday's announcement of Soon-Shiong's investment in Tribune Publishing was accompanied by a notice that the company had reached an agreement with one of Soon-Shiong's companies to license more than 100 technology patents and to produce video at his NantWorks firm's subsidiary, NantStudio.
Through machine learning, a type of artificial intelligence in which computers learn from data they collect, Soon-Shiong said the printed page could be transformed into virtual reality with the help of a smartphone or tablet. He compared it to the newspaper in Harry Potter's wizarding world, where images move and change.
"He's a man of big ideas and big resources," said Dr. Eric Topol, director of Scripps Translational Science Institute in La Jolla, who interviewed Soon-Shiong about the cancer effort at a Scripps conference in March. "What no one knows yet is whether he can fulfill these lofty expectations he's set forth."
Born in South Africa, Soon-Shiong is the son of a practitioner of traditional Chinese herbal medicine.
After earning medical degrees in Johannesburg and Vancouver, British Columbia, he joined UCLA Medical School in 1983 as an assistant professor in the gastro-intestinal surgery division. He later became director of UCLA's pancreas transplant program and was the first to perform a pancreas transplant on the West Coast.
In 1991, he invented the medicine that helped create his fortune. The drug called Abraxane was not so much a new drug as it was a repackaging of Taxol, one of the top-selling cancer drugs. When it was approved in 2005, a group of top oncologists questioned whether the expensive drug was "just old wine in a new bottle."
Los Angeles billionaire Patrick Soon-Shiong is now Tribune Publishing's second-largest shareholder.
By Samantha Masunaga and Melody Petersen
May 23, 2016 at 6:29 PM
Indeed, the new drug may never have made it to market without Soon-Shiong's aggressive business style and his insistence that he remain in charge of his idea -- a rare accomplishment in the pharmaceutical industry.
In the end, he showed the drug was more tolerable than Taxol and sold it to Celgene for $2.9 billion in 2010.
Soon-Shiong now leads NantWorks, a growing network of start-up companies, which include NantHealth, NantKwest and NantOmics. The companies have significant operations in Culver City.
NantWorks' website says the Nant name comes from the Apache word "nantan," which means leader or "he who speaks for the people."
But Soon-Shiong's businesses have not been without controversy.
He was once sued by his brother, Terrence Soon-Shiong, who sided with an investor in a lawsuit over a diabetes research firm. Patrick Soon-Shiong said he won an arbitrator's award, but ended the conflict by paying investors $37 million, $32 million of it to his brother, and leaving the company.
More recently, NantKwest prompted a lawsuit from investors when it announced that it was restating its financial statements just months after selling shares to the public in July.
Those accounting errors related, in part, to Soon-Shiong's compensation package of stock and options, which NantKwest has valued at almost $148 million, according to corporate filings. That was one of the highest pay packages for any CEO last year.
Soon-Shiong has also been criticized for what some say are exaggerations about his work. There have been questions, for example, about his assertions that NantHealth can analyze a human genome in 47 seconds.
In an interview with The Times in January, Soon-Shiong said he was used to the critiques.
"The fact that there are doubters means it's big and important," he said.
In January, Soon-Shiong announced he had convinced a group of pharmaceutical companies to work together in an effort to conquer cancer. The effort -- which he calls Cancer MoonShot 2020 -- will focus on using the human immune system to control tumors.
The project calls for conducting dozens of small-scale clinical drug trials with as many as 20,000 patients over the next three years, followed by larger trials. Its focus is the emerging field of immunotherapy, which seeks to use the body's own immune system to fight cancer.
Soon-Shiong is one of more than two dozen experts on a blue ribbon panel that is advising Vice President Joe Biden on a separate national research initiative also dubbed the cancer "moonshot."
Despite his lack of experience with media, biotech industry experts say Soon-Shiong's involvement with Tribune Publishing could make sense.
"He has the ability to see where technology will lead you even when there is high risk," said Ahmed Enany, the president of the Southern California Biomedical Council, an industry trade group. "It's both positioning and good luck."
Times staff writer James Rufus Koren contributed to this report.
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