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NantKwest's Patrick Soon-Shiong Hopes to Catch Lightning in a Bottle (Again)

By Motley Fool Staff – Aug 5, 2016 at 9:35AM

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Patrick Soon-Shiong is the planet's richest doctor. He also has a track record that includes the multibillion-dollar sales of two companies, which suggests investors might not want to ignore his latest venture.

Patrick Soon-Shiong's billionaire status makes him the planet's richest doctor, and his track record includes creating two multibillion-dollar companies. Soon-Shiong's APP Pharma sold for $5.7 billion, and Abraxis sold for $2.9 billion. Does Soon-Shiong's success mean that investors ought not ignore NantKwest (NK), his latest venture?

In this clip from The Motley Fool's Industry Focus: Healthcare podcast, analyst Kristine Harjes and contributor Todd Campbell discuss Soon-Shiong's auspicious goal of reshaping cancer treatment.

A full transcript follows the video.

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This podcast was recorded on July 27, 2016.

Kristine Harjes: Patrick Soon-Shiong is a good bit well known. He's the world's richest doctor. He's got a net worth of over $12 billion. He has a pretty long track record of success in the healthcare industry.

Todd Campbell: Yeah. Soon-Shiong is definitely somebody that people should be watching. He's kind of like, I guess, the Steve Jobs, if you will, of healthcare. He's not a household name yet; he's in the making possibly. He is working on Cancer MoonShot 2020. He's leveraging his decade-plus of experience in running two multibillion-dollar companies and then selling them for big bucks. He's leveraging that experience and that network of people to form a collaboration of industry leaders that hope to make a really, really major impact on treatment in cancer over the next few years.

Harjes: This MoonShot 2020 collaboration was just announced in January, and I'm pretty sure we've actually talked about it on this show before. Essentially what it is, is a collaboration between some of the leading cancer companies to try to accelerate research, particularly in combination immunotherapy areas, which, that by all means seems like how immunotherapies should work, is in collaboration with one another.

Campbell: Right, the listeners can go back to January if they want to find out more about the MoonShot 2020 that Kristine and I chatted about on that episode. One of the companies that's participating in this MoonShot 2020 is Soon-Shiong's own company, and that company is NantKwest, symbol NK. It's an under-the-radar company; not many people are paying attention to it right now. And that's because it hasn't begun to enroll a lot of human trials yet. It's a very early-stage company, but just because of that I wouldn't ignore this company. I think it's definitely one to watch, because Soon-Shiong has said that he plans to have six human clinical trials under way before the end of this year.

Harjes: Yeah, I think this is a great example of a company where management really makes all the difference. If I were to look at this company and it didn't have this amazing CEO sitting up at the top, I'm not, if I would really think about it more than a few minutes or so. They're down about 80% since their IPO in July 2015. They're really early stage. They're working on something that's similar to CAR-T, potentially safer, we're not really sure. Their most advanced drug in phase 2.

But with Patrick Soon-Shiong at the helm, this is the guy that, we mentioned Abraxis earlier, that was his company, which was sold to Celgene for $3 billion. This is the company that makes Abraxane, which is a huge drug for Celgene. Celgene reported about $2.25 million in revenue just from Abraxane in Q1, just for some context on what a great acquisition that was for them. The other company that Soon-Shiong has created and then sold is called American Pharma Partners. They market generic injectables to hospitals. This one was sold back in 2008 for $5.6 billion.

Campbell: Yeah, he's had a lot of success, but to your point, this is a high-risk investment because there really have been no trials, no trial results to digest. We're not anywhere near commercialization. This is one to watch.

Kristine Harjes has no position in any stocks mentioned. Todd Campbell owns shares of Celgene. The Motley Fool owns shares of and recommends Celgene. The Motley Fool has the following options: short October 2016 $95 puts on Celgene. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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