NantHealth/Soon-Shiong ch. 2: pay for play research at University of Utah?

Stat has returned to digging in the NantHealth/Dr Patrick Soon-Shiong garden to see if any more bones turn up. The writer examined the $12 million donation to the University of Utah and confirmed the POLITICO assertion that most of it ($10 million) went right back to NantHealth through a contract arrangement to pay for genetic sequencing of blood, tissue, and tumor samples. In this article are snippets of emails dating back to 2014 that indicated that even though NantHealth was at the time of the deal not yet capable of performing the work, they were specified along with the Utah Genome Project as one of the two teams to do the genome analytics. NantHealth by their own admission delayed for a few months when due in 2015 as they were not yet ready. The deal with Utah also gave NantHealth access to anonymized genetic and health data on hundreds of patients, specifically disease traits in families, their medical conditions, and relationships, if any, to others providing samples for analysis. This would have been of value not only to GPS Cancer but also to yet another Soon-Shiong company, GPS Heritage, which assesses a patient’s risk of inherited and rare diseases.

Pay for Play, which is what marketing types like your Editor call arrangements like this, removes any objectivity from this research. This is in addition to the donation arrangements, which present all sorts of taxation implications.

Regrettably, instead of trying to clear things up or being upfront about this business arrangement, Dr Soon-Shiong has chosen to make this a War of the Tweets, accusing Stat and POLITICO of bias, and to hide behind a now long-ago meeting with President Trump. (Sorry, Doctor, POTUS has other things on his mind like North Korea, ISIS and the American Economy–and he tweets more skillfully than you.) Everyone knows that finding treatments and cures for cancer is noble work, but there is also the appearance of cutting corners and a general air of dubiousness around the whole NantHealth enterprise. Mr Market is having its say as well in the share price. By the way, NantHealth lost $184 million in 2016Stat, Healthcare IT News.

Read Chapter 1, ‘Another Theranos on boil?’, here.

Another Theranos on boil? Patrick Soon-Shiong’s companies and the NantHealth Foundation (update)

Billionaire Patrick Soon-Shiong‘s drive to take down cancer through vaccines, genomics, software, and related health tech is one of the key missions of his NantHealth group and also the Foundation. Both fund research efforts such as Cancer Breakthroughs 2020, which is supported by former Vice President Joseph Biden. Reportedly, the well-wired Dr Soon-Shiong wooed President Trump for a role in his new Administration, one that has not materialized. In February, we noted his appearance at HIMSS17 promoting his cancer vaccine which was approved by FDA to advance to later clinical trials, and also unveiled Nant AI and the Nant Cloud–but also an article published in Stat that gazed through the NantHealth veil and found little to compliment, including the trademark infringement suit brought by the MD Anderson Cancer Center in Texas.

Apparent self-dealing among various NantHealth companies and investors, which started to be unwrapped in Stat, is now further investigated in a long POLITICO article. The report looks at transactions among the Chan Soon-Shiong NantHealth Foundation, the NantHealth companies, and other non-profits controlled by Dr Soon-Shiong, then at charitable donations to universities and hospitals that in turn support his research and other companies. Three citations in the article will attract the Reader’s notice (Editor’s emphasis):

Of the nearly $59.6 million in foundation expenditures between its founding in 2010 and 2015, the most recent year for which records are available, over 70 percent have gone to Soon-Shiong-affiliated not-for-profits and for-profits, along with entities that do business with his for-profit firms.

The foundation contributed $3 million out of a total of $12 million donated by Soon-Shiong-controlled entities to a University of Utah program to map the genomes of 1,000 state residents. University officials say they let Soon-Shiong’s entities write the grant specifications. The specifications gave a major advantage to his for-profit firms, which got the $10 million gene-mapping contract.

Soon-Shiong-controlled charities gave a total of $15 million — including $10 million from the NantHealth Foundation — to a fund that benefited Phoenix Children’s Hospital, which concluded a pair of deals with Soon-Shiong’s for-profit companies for many millions of dollars.

It’s dizzying, certainly by design. If true, it appears that Dr Soon-Shiong’s favorite charities happen to be his own businesses, which raise all sorts of ethical and legal questions. The investigation also calls into question not only these dealings but also the Foundation’s tax-exempt and additional special status as a medical research organization. Will the IRS come calling? How Washington’s favorite cancer fighter helps himself    Also Healthcare IT News, which delightfully called them ‘funding indiscretions’.

Updated. A canary in the coal mine is the NantHealth (NASDAQ: NH) share price, which has crashed from a 52-week high of $21 to a current value of $4.32. To clarify, it has been in precipitous decline since January, and not just from this report. There is trouble in Culver City. A quick look over at Yahoo!Finance news items now reveal a brace of law firms offering class action lawsuits to shareholders who believe they have suffered losses due to “materially false and misleading statements”, now updated for the above information.