Dr. Patrick Soon-Shiong’s diagnostics company, NantHealth, on Thursday reported that it had lost $184 million last year as the company’s signature GPS Cancer diagnostic test struggled to gain traction.
The biotech billionaire has touted GPS Cancer — which analyzes tumor genetics, including protein expression, and recommends possible courses of treatment — as a revolution in cancer diagnostics. The company said more oncologists have been trying out the pricey tool; it reported that 264 physicians ordered a test at some point last year.
“Clearly, the adoption is now beginning to take hold,” Soon-Shiong said on a conference call with investors.
But the actual number of tests ordered dropped in the last few months of the year: NantHealth reported 524 orders in the third quarter of 2016 and just 452 in the fourth quarter. More than 300 of those tests were for research purposes, not for diagnosing existing cancer patients.
All told, NantHealth has sold fewer than 1,000 commercial GPS Cancer tests.
NantHealth reported net revenue of $100 million last year, but spent nearly $62 million just on research and development. It also reported other expenses, leading to the net loss of $184 million on the year — more than double the losses it notched in 2015. The company blamed some of the loss on “delay in the sales growth of the GPS test compared with the company’s expectations.”
In a press release, the company said it expects “to continue to incur operating losses over the near term” as it seeks to build the market for GPS Cancer.
The company has contracts with eight payers, including insurance companies, to cover the test for qualified patients. It continues to talk with additional payers, including the Centers for Medicare and Medicaid Services, about possible coverage.
Soon-Shiong told investors during the earnings call on Thursday that NantHealth’s plans for this year include “aggressively expanding our sales efforts,” including sending teams into the field to educate doctors about GPS cancer.
Soon-Shiong repeatedly voiced confidence that more physicians would warm to the test, at point likening it to an addictive drug.
“Once the doctor understands the test, the way they actually describe it to me, they say it becomes like a drug, meaning it’s addictive, they almost cannot do without it,” he said.
Soon-Shiong’s company has been reeling since it went public with fanfare in June of 2016.
Last month, STAT published an investigation finding that Soon-Shiong has been using his much-touted cancer moonshot initiative, which aims to develop a cure for cancer by 2020, as a marketing vehicle for GPS Cancer.
In a second investigative piece, STAT described how Soon-Shiong made a $12 million donation to the University of Utah for research — but reaped significant commercial benefits from that gift, as the contract was written in a way that led the university to conclude it had no choice but to send $10 million back to NantHealth to pay for genetic sequencing. Some of the genetic tests that Utah researchers ordered as part of that project are counted in NantHealth’s tally of total GPS orders.
NantHealth’s stock has dropped considerably since the publication of STAT’s second report three weeks ago. It closed Thursday at $5.09 a share.
In the wake of the STAT reports, at least three investors have also filed suit against Soon-Shiong and NantHealth, alleging violations of federal securities law.
In recent weeks, Soon-Shiong has repeatedly tweeted that he intends to “solve cancer” no matter the obstacles.
He also tweeted an emotional video of a patient who said she believes that an experimental treatment being developed by another of his companies cured her of cancer, though it remains in early-stage testing and has not yet been approved by the Food and Drug Administration. After STAT raised questions about that video, Soon-Shiong’s team edited it to remove the NantHealth logo and to delete the spoken lines and text that implied the treatment was a breakthrough that could cure cancer.
Soon-Shiong, who has been called the world’s richest doctor, owns stakes in the Los Angeles Lakers and in the media company Tronc. His brash promises to find a cure to cancer by 2020 have attracted attention from politicians — including President Trump and former Vice President Joe Biden — and even from the pope. After Trump’s election, Soon-Shiong reportedly pitched himself to Trump’s team as a national health care czar.