From one billionaire investor to another: NantPharm raises $125 million
This article was originally published in Scrip
Blackstone, the New York-based investment firm with $190 billion under management, has put $125 million as a minority investor into the biologics and pharmaceutical manufacturing unit of Nantworks - NantPharm - established in September 2011 by serial entrepreneur and billionaire philanthropist Patrick Soon-Shiong. The NantPharm unit is principally involved in pharmaceutical development and manufacturing.
NantWorks is a diversified Los Angeles-based technology company. Senior vice president Bob Peirce told Scrip that the philosophy behind NantPharm and NantWorks was that "big leaps forward in science, particularly in medical science, come when you bring different technology together. [Patrick Soon-Shiong] believes that mathematicians, engineers, chemical scientists and biologists need to get together."
NantWorks has been assembling an intriguing set of relationships in the healthcare and pharmaceutical space, in effect, an infrastructure to deliver healthcare based on 'big data'. NantWorks' Bob Peirce told Scrip that Dr Soon-Shiong had invested "hundreds of millions of dollars" into NantWorks.
An underpinning part of the NantWorks' network is the Chan Soo-Shiong Institute, a non-profit medical research entity, was established in 2011. The Institute, which has facilities in California and Arizona has linked supercomputing power with genome sequencing facilities as a way of providing researchers and physicians with access to the power to analyse that 'big data'.
By the time NantWorks was formed in September 2011, Dr Soon-Shiong had already acquired at least two components of his commercial health-related network. In August, he bought ConjuChem LLC, a Los Angeles-based company which develops medicines that incorporate albumin as a way of protecting and prolonging the action of peptide-drugs. And before that, in February 2011, he had acquired Vitality, a company that developed the first wireless Internet-connected smart pill bottle to improve patient compliance.
Shortly after than, in October, Nantworks entered a collaboration with the US phone and network provider. The first joint project between the two Verizon and NantWorks’ first initiative will be to create the Cancer Knowledge Action Network, an integrated information infrastructure that give physicians immediate access to the most up-to-date best practice information about effective protocols for the treatment of specific cancer conditions. The goal of the project according to NantWorks is to create "actionable information at the point of care, enabling better care through mobile devices in hospitals, clinics and homes."
Subsequently, in October 2011, it bought Ziosoft, a supercomputing and medical imaging firm with a strong commercial presence in Japan.
The NantPharm unit into which the Blackstone investment has been made is, perhaps, at the more mundane end of NantWorks' business. In January, NantPharm announced it had bought Pfizer's manufacturing plant in Terra Haute, Indiana and committed $85.5 million to redevelop and modernize the facility by 2015 to produce human blood products and injectable cancer drugs.
The new money will be channelled into accelerating that redevelopment. In a statement welcoming the Blackstone collaboration, Dr Soon-Shiong "Our country must have absolutely reliable sources of blood plasma products. ... Safety is paramount with such products." He also added that the US needed to enhance its "capabilities to manufacture injectable and next generation drugs."
The engagement between NantPharm and Blackstone was personal before it became financial. Dr Soon-Shiong and Blackstone senior managing director Chinh E. Chu have known each other for several years.
Mr Chu, Blackstone senior managing director Anjan Mukherjee, and Arthur Higgins from Blackstone Healthcare Partners will join the NantPharm board of directors.
Mr Higgins is a former chairman of the board of management for Bayer HealthCare, who led the company’s restructuring effort, which included acquisitions of Schering and Roche's over-the-counter medicines business. He's also a former head of Abbott Laboratories’ US pharmaceutical business.
Dr Soon-Shiong has put his profits from the sale of two biopharmaceutical companies – APP Pharmaceuticals, which sold for $5.6 billion to Fresenius in 2008 (scripintelligence.com, 7 July 2008) and Abraxis BioScience, which sold for $2.9 billion plus milestone payments to Celgene in 2010 (scripintelligence.com, 30 June 2010) – into NantWorks.
Dr Soon-Shiong has experience with injectable cancer drugs from his days running Abraxis, which developed the second-line metastatic breast cancer agent Abraxane (protein-bound paclitaxel).