It wasn’t your usual earnings call.
Dr. Patrick Soon-Shiong opened a routine report on his company NantHealth’s first quarter results with this: “Before I go into the details about our business, I would like to take this opportunity to get something off my chest.”
In a remarkable minute-long speech, the biotech billionaire then railed against what he characterized as “all this false reporting” — a reference to a series of critical investigative reports from STAT and other media organizations. The articles have been followed by a plunge in NantHealth’s stock price in recent weeks.
The outburst on the earnings call was the latest instance of Soon-Shiong lashing out against a news media that he believes is treating him unfairly while he wages a noble quest to cure cancer.
He’s taken his defense to social media (“Nobody should be a target just because they want to help our country,” he wrote on Twitter last month), blasted it out in press releases, and, last weekend, aired his grievances at a technology conference. The video of his keynote speech at that conference, called TiEcon, is blacked out, but an attendee tweeted that Soon-Shiong spoke about his frustration with the media.
On the Wednesday evening earnings call, Soon-Shiong focused on what he characterized as “a truly egregious false statement” in a story by Politico. He disputed Politico’s reporting last month about exactly how much his umbrella company, NantWorks, paid his philanthropic foundation for the Los Angeles area property where his companies are housed.
#TIEcon Keynote @DrPatSoonShiong breathtaking speech about the cure of cancer #NANT and his struggle with #fakenews inspiring and disturbing pic.twitter.com/33fZ0aBRap
— Oliver Naegele (@oliver_naegele) May 6, 2017
Politico reported that NantWorks in 2012 paid $6 million — an apparently undervalued price — to Soon-Shiong’s NantHealth Foundation for that property. On the call, Soon-Shiong claimed that NantWorks actually paid $15.5 million, and that Politico had ignored his statements to that effect both before and after the publication of the story.
Katie Pudwill, a spokeswoman for Politico, said that the news organization stands behinds the article, which was the product of months of investigation, and is evaluating the specific concerns raised by Soon-Shiong’s team.
Soon-Shiong did not dispute any other specific element of Politico’s reporting, which detailed numerous instances of Soon-Shiong receiving commercial benefit from his philanthropy.
“We will no longer be distracted or even to react to all this false reporting, and the details of this particular egregious statement will be put on our website for all to review,” Soon-Shiong said.
From there, Soon-Shiong turned the normal part of the call — in this case, reporting lackluster financial results for NantHealth in the first three months of this year.
The company reported $41 million in net losses for the quarter. It also reported that it had seen a slight increase in commercial orders — 365, up from 326 the previous quarter — for its GPS Cancer test, a diagnostic tool designed to help oncologists pick treatments that match the genetics of a patient’s tumor. The test has been slow to take off.
Last quarter, NantHealth actually reported 452 orders for GPS Cancer, and told investors and analysts that number included the 326 commercial orders plus 126 ordered for research purposes, including genetic sequencing work carried out as part of a deal with the University of Utah.
For this report, NantHealth did not include mention of any research orders.
Asked by an analyst from the financial services firm Cowen why GPS Cancer hasn’t taken off as expected, Soon-Shiong said that he and his team had underestimated several factors: the complexity for doctors of interpreting a vast amount of genetic data, the need for marketing about the usefulness of the test, and the time it would take to educate payers.
“Once the education occurs, the utilization and adoption will take place. I believe it’s just a matter of time,” Soon-Shiong said.
NantHealth has seen its stock price drop by 52 percent since STAT reported in March about how Soon-Shiong’s philanthropic donation to the University of Utah brought commercial benefit to his business.
In other news out of Soon-Shiong’s world, NantKwest recently took a loss in its quest to bulk up its intellectual property rights to its experimental cancer therapy, called NK-92. The US Patent and Trademark Office had previously refused to grant the company patent protection on certain claims about the cell line’s power — and last week, a federal appeals court upheld that decision.
This article has been updated with comment from Politico.