Patrick Soon-Shiong Sued Over 'Catch and Kill' of Cancer Drug

Roxanne Nelson, RN, BSN

April 09, 2019

Patrick Soon-Shiong, MD

Biotech entrepreneur Patrick Soon-Shiong, MD, has been accused of orchestrating a "catch and kill" plan that prevented a cancer therapy entering the US market.

The product, known as Cynviloq and developed by Sorrento Therapeutics, is a biosimilar version of Abraxane (albumin-bound paclitaxel), which was developed by Soon-Shiong and sold to Celgene in 2010 (a company of which Soon-Shiong is the largest shareholder).

Two lawsuits filed by Sorrento Therapeutics allege that Soon-Shiong purchased Cynviloq from Sorrento Therapeutics but then prevented it from ever reaching the market.

Sorrento filed two lawsuits against Soon-Shiong and his NantWorks network of companies on April 3, according to an SEC report.

The civil case, filed in Los Angeles County's Superior Court, is seeking $90 million, and the arbitration case, filed with the American Arbitration Association in Los Angeles, is seeking damages in excess of $1 billion, as well as additional punitive damages related to alleged fraud and breaches of the stock sale and purchase agreement.

Soon-Shiong has denied any wrongdoing and says the lawsuits are without any merit.

Medscape Medical News reached out to Soon-Shiong, and he issued this statement: "The lawsuit is a cynical attempt to deflect from Sorrento's own breach of contract. The allegation that we have not developed Cynviloq to protect the sales of Abraxane is false and it ignores the facts. Because it is totally without merit, we shall defend ourselves vigorously against this baseless allegation."

This rather complex story began nearly a decade earlier, when Celgene bought Abraxis BioScience (owned by Soon-Shiong) in 2010 for cash and stock totaling $2.9 billion.

This buyout gave Celgene control of Abraxane, which had been approved for breast cancer, along with other investigational agents in the pipeline. While Soon-Shiong no longer owned Abraxane, he became Celgene's single largest individual shareholder, with well over $1 billion in Celgene stock and contingent value rights shares.

In its complaint, Sorrento notes the "catch and kill" scheme of "acquiring the rights to a damaging news story (the 'catch'), and then paying the publisher to ensure it never becomes public (the 'kill'), has been well-publicized recently."

This case, however, "involves a far more egregious and damaging version" of the "catch and kill" scenario in that this is about the "catching and killing of a cancer drug that — had it been brought to market as planned — would have saved patients, hospitals, and the US government in excess of $1 billion."

Killing the Competition

Cynviloq has been approved in South Korea and several other countries, and is marketed as Genexol-PM by Samyang Biopharmaceuticals. Sorrento had already acquired exclusive rights from Samyang for Cynviloq to be sold in the United States once it became available.

When Soon-Shiong approached Sorrento about acquiring Cynviloq in November 2014, the drug was already on the fast track to approval and poised to enter the market as a direct competitor to Abraxane. 

Sorrento points out in its complaint that Abraxane has virtually no competition, and so Celgene has been able to sell the product for an "artificially" high price. A single dose of Abraxane retails for $1378 in the United States, it points out.

Having a competitor would likely force down the price — as has happened in South Korea, where Genexol-PM is sold alongside Abraxane, and the price of Abraxane had dropped to about $270 per dose, while Genexol-PM sells for $180 per dose.

If it was approved for use in the United States, Sorrento believes that Cynviloq would have had a similar competitive effect on Abraxane pricing.

Thus, the entry of a competitor into the market would be "financially devastating for Soon-Shiong personally, given the large amount of his wealth that was, and remains, tied up in Celgene," says Sorrento. The company alleges that Soon-Shiong was seeking to avoid these financial losses when he approached Sorrento about arranging an acquisition of Cynviloq.

The story then becomes increasingly complicated. According to the complaint, Soon-Shiong had hoped to broker a deal between Sorrento and Celgene for the drug, as that could help offset any losses to sales of Abraxane. But in early 2015, when it appeared the Federal Trade Commission would object to the deal, Soon-Shiong then proposed that his own company, NantPharma, acquire the drug instead.

His company paid $90 million in cash and agreed to $1.2 billion in milestone payments, some of which were contingent on FDA approvals, but these payments were never made.

The goal was to bring Cynviloq to market by mid-2016, but the complaint alleges that "it became increasingly clear that Soon-Shiong had defrauded Sorrento." Soon-Shiong did not move forward with obtaining FDA approval, he allowed critical patents to lapse and demonstrated "zero interest" in reaching the approvals that both parties had agreed upon.

Thus, this was all a scam that "intended to lure Sorrento into giving up Cynviloq" while ensuring it would never be approved for the US market, "thereby protecting Soon-Shiong's billion-dollar interest in Celgene and Abraxane," according to the allegations.

Secret Transactions

But there was still more. Sorrento alleges that Soon-Shiong subsequently orchestrated a "secret, illegal transaction" to get back the $90 million he had paid for Cynviloq.

At about the same time that the negotiations for Cynviloq were taking place, Sorrento and NantCell, one of Soon-Shiong's companies, created a joint venture called NANTibody. Sorrento invested $40 million of the $90 million it received for Cynviloq in this joint venture, but 2 years later, Soon-Shiong and his chief legal officer, Charles Kim, who is also named as a defendant in this suit, signed a "secret deal" that moved almost all of the $40 million out of NANTibody and over to another company, NantPharma, without Sorrento's knowledge.

Among other demands of its lawsuits, Sorrento is seeking an injunction to return the more than $90 million that was drained from the account, so it can "return to the business it was devised to do: research, develop, and bring to market innovative immunotherapies to win the battle against cancer."

In addition, Sorrento is also seeking an injunction that would bar both Soon-Shiong and Kim from serving as NANTibody directors or officers.

Sorrento did not respond to multiple inquiries from Medscape Medical News.

Other Side of the Story

Soon-Shiong denies these allegations and gave his side of the story in his comments to Medscape Medical News.

Importantly, he noted that when his company acquired Cynviloq from Sorrento, it was part of a larger transaction in which they also acquired the exclusive rights to over 75 antibodies.

"Sorrento has only provided 15 antibodies to date, in breach of its contractual commitments, and has refused to otherwise honor its exclusivity and other obligations," he said. "As one example, despite having exclusively licensed a PD-L1 antibody to us, Sorrento has since licensed the same PD-L1 antibody to a Korean company and announced a Phase 1 study, in breach of our agreement."

Second, he pointed out that NantPharma acquired Cynviloq with the public representation from Sorrento that the molecule was bioequivalent to Abraxane and the FDA had agreed with Sorrento's finding of bioequivalence based on a meeting with the FDA.

"Following the acquisition, we discovered that Sorrento had misrepresented this information," said Soon-Shiong. "Upon digging into the raw data from the Sorrento clinical trial, our statisticians in fact discovered that the drug was indeed not bioequivalent and reported this finding to the company. We shared these findings with Sorrento and informed them that it would not be possible for us to file under the bioequivalence approval pathway because the data did not support that approach."

There were also problems with drug impurity and manufacturing processes, Soon-Shiong said. When they requested a new supply of the drug from the Korean manufacturer, they discovered that the formulation contained an impurity. This in turn required the supplier to identify the cause of the impurity and to modify the manufacturer's process in order to remove it.

"This process was attempted by the supplier who presented their results to us recently, but unfortunately the process improvement further increased the instability of the drug," he said. "The need for further development to improve the stability by the manufacturer is currently under review while we pursue the safety analysis of the original formulation in a Phase 1 study."

Due to the fact that the drug required a new process, further stability testing, and a complete new Phase 1 clinical study, the decision was made to sell it to their joint venture with Sorrento, which had both regulatory and formulation expertise.

"We initiated a Phase 1 study and this study is currently open and we are actively trying to recruit patients as of this date," he said. "The statements and claims made by Sorrento are thus puzzling in light of our diligent and responsible activity ever since we acquired the drug, and can only be viewed as a cynical attempt to deflect from their breach of contract."

Moon Shots and Controversy

In addition to his other holdings, Soon-Shiong also owns the Los Angeles Times and San Diego Union-Tribune, and has an estimated worth of $8.6 billion. But in the past few years, Soon-Shiong has been in and out of the news amid some controversy.

In addition, shortly after the Cancer Moon Shot program was announced by President Obama in 2016, Soon-Shiong announced his own huge cancer research project, which was also shooting for the moon. At a press event in 2016, he laid out provocative plans for the launch of the National Immunotherapy Coalition (NIC), which was to form the basis of Cancer MoonShot 2020.

However, a year later, an investigation by STAT found very little progress had been made despite some large claims from the program. Some of Cancer Moonshot 2020's heralded milestones, STAT reported, 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 Soon-Shiong's private companies. The tool analyzes tumors and recommends treatment, and costs $11,000 per test.

Shortly afterwards, STAT published another investigation into a $12 million philanthropic donation from Soon-Shiong to the University of Utah, which returned $10 million of that gift to NantHealth, when it paid for the expensive genetic sequencing of blood, normal tissue, and tumor samples of 1000 of its patients. This arrangement raised many ethical questions, including whether the Utah patients consented to have their data transferred to a for-profit company.

A few months later, the pot was again stirred when Soon-Shiong was named to a committee that would advise the current administration on health information technology policy. He was to join the 25-person Health Information Technology Advisory Committee established by President Barack Obama under the 21st Century Cures Act, but a number of news outlets including Politico and STAT flagged potential conflicts of interest of this appointment.

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