D

r. Patrick Soon-Shiong just added six California hospitals to his sprawling medical empire.

The biotech billionaire’s privately owned umbrella company, NantWorks, picked up a majority stake in the management company of the nonprofit hospital chain Verity Health. The deal, which closed last Friday and was announced on Wednesday, makes NantWorks the operator of four hospitals in Northern California and two hospitals in Southern California — including St. Vincent Medical Center, Los Angeles’s oldest hospital — known for serving low-income communities.

This marks the first time Soon-Shiong, who made his name as a pioneering surgeon, will be in the business of operating hospitals. And, crucially, it provides him with a opportunity to test and get new customers for the many products his various public and privately held firms have in development and on the market, including cancer therapies, hospital software, and the diagnostic test GPS Cancer.

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“This [hospital] system will provide an experiment at scale,” Soon-Shiong told the Los Angeles Times. He also told the Times he plans to upgrade the hospitals’ physical infrastructure and expand services for cancer, transplant, orthopedic, and cardiology patients. (Soon-Shiong is the second-largest shareholder in the newspaper’s parent company.)

Soon-Shiong’s spokeswoman, Jen Hodson, told STAT that the Verity Health hospitals are not currently using any products sold by Soon-Shiong’s companies.

As a nonprofit, Verity Health doesn’t have an owner. But the hedge fund BlueMountain Capital Management in 2015 paid $260 million to gain control of the financially troubled system — and obtain an option to turn it into a for-profit chain after three years. The hedge fund, which had previously been the majority owner of the hospital chain’s management company, will retain a minority stake in that company, which oversees 1,650 inpatient beds and 6,000 employees spread across California.

Soon-Shiong in 2013 unsuccessfully tried to buy a different hospital, St. John’s Health Center in Santa Monica, which was ultimately acquired by the Pacific Northwest hospital chain Providence Health.

Soon-Shiong said in May that he plans this summer to open what he billed as a new world-class cancer center in Los Angeles. Hodson told STAT last month that Soon-Shiong will be on staff at the new standalone clinic but won’t own it. She said Wednesday that those plans are separate from the Verity Health deal.

The deal comes as Soon-Shiong tries to turn the page on a turbulent spring that saw the stock price of his diagnostics company NantHealth plummet following investigative reports from STAT and Politico detailing how Soon-Shiong’s philanthropic activities have brought unconventional benefits to his businesses. He has denied any wrongdoing.

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