Troubles of the Billionaire 'Moonshot' Doctor

Nick Mulcahy

April 26, 2017

Patrick Soon-Shiong, MD, has hit a rough patch.

Only a few months ago, the 64-year-old surgeon, who has an estimated worth of $8.6 billion and whose various enterprises collectively have a strong focus in oncology, seemed on top of the US healthcare world.

After the presidential race, he met twice with President-elect Trump to discuss ideas about healthcare in the United States. In January, he appeared to be in the running for a top position in the new administration.

But with the very high profile came some very high scrutiny. And that's when various troubles surfaced.

Dr Patrick Soon-Shiong (right) and Kobe Bryant. Source: Danny Moloshok/AP

First, in February, an investigation by STAT into Dr Soon-Shiong's Cancer Moonshot initiative, which was started in 2016 as an effort to "solve cancer," found that very little progress had been made despite some large claims from the program. (The initiative was later renamed "Cancer Moonshot 2020" after a lawsuit was filed by MD Anderson Cancer Center in Houston and after the Obama administration launched its own "moonshot." In 2016, Medscape's Eric Topol, MD, interviewed Dr Soon-Shiong on the concept.)

"The clinical breakthroughs touted by Patrick Soon-Shiong are less than modest — they are the most miniscule and vague findings," said Vinay Prasad, MD, a hematologist-oncologist at Oregon Health and Science University in Portland, who is quoted in the article by STAT. He said they were "overblown beyond what is reasonable or fair."

The report also observed that some of Cancer Moonshot 2020's heralded milestones were simply related to doctors' or institutions' agreeing to use a cancer diagnostic test, called GPS Cancer, which is owned and distributed by one of Dr Soon-Shiong's private companies. The tool analyzes tumors and recommends treatment and costs $11,000 per test.

But the next bit of bad press was much more damaging.

In March, STAT published another investigation into a $12 million philanthropic donation from Dr Soon-Shiong to the University of Utah. As it turned out, Utah returned $10 million of that gift to one of his companies, NantHealth, when it paid for the expensive genetic sequencing of blood, normal tissue, and tumor samples of 1000 of its patients.

In short, Dr Soon-Shiong used a charitable donation to steer a robust amount of business back to his for-profit company, NantHealth.

Furthermore, the arrangement gave NantHealth access to genetic and health data on hundreds of patients at the University of Utah. The deal "will help us with our product," a NantHealth vice president wrote in an email cited in the story.

The arrangement raised many ethical questions, including whether the Utah patients consented to have their data transferred to a for-profit company, experts said in the STAT article.

Since the publishing of that investigation, NantHealth's stock price dropped by more than 40% and is now trading at $3.54 per share. Furthermore, at least three investors have filed suit against Dr Soon-Shiong and NantHealth, regarding violations of federal securities law, alleging that the Utah deal (and its lack of transparency) "artificially inflated" the value of NantHealth stock (before the price dropped).

More Questionable Donations

Earlier this month, an investigation by Politico  found that more than 70% of the $59.6 million in donations from Dr Soon-Shiong's medical research foundation, the NantHealth Foundation, have been given to not-for-profits and for-profits affiliated with him or to organizations that conduct business with his for-profit companies. The donations occurred between 2010, when the foundation was started, and 2015.

"The abuse is taking money that is supposed to be irrevocably dedicated to charitable purposes…and using it for other, self-benefiting purposes," Lloyd Mayer, a University of Notre Dame professor who specializes in not-for-profit law, said in the Politico article.

Donations totaling $15 million in 2014 from Dr Soon-Shiong to Phoenix Children's Hospital also raised these same concerns. The city of Phoenix had a special fund to accept donations for the pediatric hospital that would then be tripled by the US Centers for Medicaid & Medicare Services. So, the $15 million became $45 million. However, the city required that donors to this fund had to sign a form stating that they were not suppliers of health materials or services or acting on behalf of such suppliers. 

The investigative report observes that Dr Soon-Shiong signed the forms — even though he had previously executed a deal with the hospital to create a pediatric cancer research consortium that is co-owned by the hospital and NantHealth.

Dr Soon-Shiong defended his actions, saying that they were within the letter of the law.

The Politico investigation also questions whether the NantHealth Foundation is a legitimate medical research organization. To qualify as such, it must affiliate and conduct research with a hospital. Founded in 2010, the foundation had a 3-year grace period, by law, to establish such a relationship.

The NantHealth Foundation indicates that the Providence Saint John's Hospital in Santa Monica, California, is its primary research affiliation. But the hospital has no record of any research projects, said a hospital spokesperson quoted in the article. Dr Soon-Shiong said this was nonetheless legal because no research actually has to take place — the hospital just has to be available for research.

However, Politico cited Internal Revenue Service documents that say such organizations must maintain close cooperation in active medical research.

Dr Soon-Shiong countered that the foundation also worked with Windber Medical Center near Johnstown, Pennsylvania, through an entity known as the Chan Soon-Shiong Institute of Molecular Medicine. The agreement between the medical center and the Soon-Shiong Institute was released publicly in 2015.

From Surgeon to Billionaire

In March, Dr Soon-Shiong also got into hot water when he touted an experimental cancer therapy project at a health software convention in Orlando, Florida.

He reportedly showed a video with a banner headline that declared a "new cancer breakthrough helps patients kill cancer." The supposed breakthrough was an experimental therapy from NantKWest, one of Dr Soon-Shiong's companies. He was criticized for describing an experimental therapy with promotional language.

Dr Soon-Shiong has garnered  a lot of attention as he has moved from being a surgeon to being an entrepreneur. He was born and educated in South Africa before moving to Canada for a master's degree from the University of British Columbia. He then moved on to the University of California, Los Angeles.

According to Politico, the surgeon performed an experimental surgery at UCLA in 1993 that was an effort to cure a case of diabetes by transplanting pancreatic islet cells into a patient. The patient had a period of not needing insulin but eventually relapsed. However, the American Diabetes Association criticized Dr Soon-Shiong for "inappropriate hype" related to the case. Tragically, the patient later committed suicide.

Dr Soon-Shiong's transition into mega-wealth included his participation in an effort that led to the development of  nab-paclitaxel (Abraxane), an old chemotherapy in a new liposomal formulation. The product  was then sold to Celgene in 2010 for a reported $3 billion. The drug, now approved for breast and lung cancers, was first approved for pancreatic cancer.

Nab-paclitaxel is a rare clinical success in this notoriously difficult-to-treat cancer. But the drug provides scant benefit, said a pair of experts soon after the pivotal phase 3 clinical trial of nab-paclitaxel was published in the New England Journal Medicine in 2013.

Notably, the title of the published study was "Increased Survival in Pancreatic Cancer with nab-Paclitaxel plus Gemcitabine."

In a letter to the editor, Leonard Saltz, MD, and Peter Bach, MD, from Memorial Sloan Kettering Cancer Center in New York City, objected to the title. It's "inappropriately rosy, given the modest benefits and substantial toxic effects observed," they wrote.

"The addition of nab-paclitaxel increased the median survival by 1.8 months, or 55 days. The chance of being alive at 2 years was increased from 4% to 9%. Meanwhile, an additional 10% of patients had grade 3 (severe) fatigue…. Grade 3 (severe) neuropathy was increased by 16%," they stated. In addition, they continued, the treatment was costly.

"A more neutral title, such as 'Nab-Paclitaxel plus Gemcitabine in Pancreas Cancer,' might help avoid an imbalanced perception of the study findings," they concluded.

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