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Sorrento Therapeutics Is Not Happy

I have not been a fan of Patrick Soon-Shiong and his approach to the biopharma business (and the publicity thereof). There’s a new lawsuit that (should its accusation hold up) will make anyone even less of a fan. Here’s a rundown at Endpoints, and one at Forbes. It’s a mess, so I’ll try to untangle the story:

Back in 2015, Sorrento Therapeutics sold one of its drugs to a Soon-Shiong company (NantPharma). That was Cynviloq, a nanoparticle formulation of paclitaxel (which is famously in need of formulation help, being quite insoluble and most likely to dissolve in vehicles that some patients can’t tolerate). Another Soon-Shiong company (Abraxis) had already developed its own paclitaxel formulation some years before (Abraxane), where the drug was already bound to albumin protein, and Celgene had bought the whole company in 2010 for $2.9 billion to get that one into their portfolio.

So this newer Soon-Shiong venture paid Sorrento $90 million plus potential milestone payments if the Cynviloq nanoparticle form went on to success in the clinic and approval. So far, this looks like a case of going back to the well with reformulated paclitaxel (after all, it worked great with Abraxis, didn’t it?) But this new lawsuit, filed by Sorrento, alleges something else. They claim that NantPharma was engaging in a “catch-and-kill” deal to protect the earlier drug’s market position, since Soon-Shiong was (after the earlier deal) Celgene’s largest individual shareholder. And if Cynviloq had been successful, it would have hurt Celgene’s business and Soon-Shiong’s stock position. The lawsuit alleges that Soon-Shiong had originally thought to sell Cynviloq to Celgene to add to their portfolio yet again, but that Celgene passed on the idea.

And here’s where things get complicated. Sorrento actually took $40 million of the $90 million they’d gotten from NantPharma, and turned right around and invested in a new joint venture with another Soon-Shiong company (NantCell) for developing antibody therapies. The lawsuit alleges that Soon-Shiong and his company’s legal counsel then caused the joint venture company to transfer all its cash over to NantPharma itself, effectively reclaiming $40 million of the upfront payment that they’d made to Sorrento and leaving the joint venture company as basically an empty husk. So Sorrento claims that they have been left without a useful joint venture, losing $40 million along the way, and with a drug that is not going to generate any further milestone payments because Soon-Shiong and NantPharma now intend to sit on it.

As the Endpoints article mentions, this is not the first time that Soon-Shiong has been accused of such creative accounting. STAT had a very interesting series of articles about how he donated money to the University of Utah but apparently structured the deal so that much of the money would flow back to one of his own companies (Soon-Shiong has denied the accusations), and this Politico article details several other controversies. So for what it’s worth, this isn’t a charge that comes out of a clear blue sky. I take the point that what we have so far is one side of the story, but it will be interesting to see where this goes. My guess is some sort of expensive settlement, after a few more rounds of legal maneuvers, but we’ll see.

 

13 comments on “Sorrento Therapeutics Is Not Happy”

  1. myma says:

    The Soon-Shiong giveth, and the Soon-Shiong taketh away.

  2. Anon2 says:

    But I thought medical doctors are suppsoed to help people? /s

    It would be good to know of Shiong’s companies so that those of us in hiring positions know the applicants to watch out for and those in job pool know where to avoid.

    1. NJBiologist says:

      NJB’s rule for reading resumes: Do a thorough web search on *ANYTHING* you don’t recognize or understand before taking the next step. Don’t recognize a company name? Find out if they dissolved amid accusations of shenanigans. Don’t recognize a technique? Understand it well enough that you can see if the applicant understands it, too.

      This rule has helped me find some very bright applicants (see second example above), but has also probably kept me away from some bad situations.

  3. Anon says:

    Patrick Soon-Shiong’s “catch and Kill” policy did a disservice to cancer patients. Sorrento Therapeutics has reasons to be pissed.

  4. David Young MD says:

    After all these years, I don’t think that a new formulation of Paclitaxel is going to be any more effective against cancer (breast, ovarian, gastric, sarcoma, lung, etc). Rather than recycle drugs with proven but limited effectiveness, we could use novel drugs that overcome resistance, are more effect and hopefully well tolerated. There is not much (visible) research into new cytotoxics and it is debatable whether this is good or not. I would like to see a novel drug in a nanoparticle formulation that somehow is better tolerated and more effective…. but of course this is just wishful thinking on the part of this Medical Oncologist.

    1. MrXYZ says:

      Thanks for this comment. I’m on the Discovery side so hearing from the clinical side is always useful. I think the general thinking is that a better formulation would lead to greater effectiveness. Is Abraxane considered (by clinicians) to be more effective than paclitaxel (Taxol) alone?

      Regarding the discovery of new cytotoxics, while I can’t speak about new chemotherapy drug agents, per se, I know that there is discovery work on new cytotoxic agents for antibody-drug conjugates. Those fall under my own personal Things I Won’t Work With (I am sure all scientists have a personal no-go zone for experiments).

    2. Barry says:

      Eg5 inhibitors currently being explored are certainly novel (whopping) cytotoxics. They don’t target cancer cells per se. But they do kill any cell that attempts mitosis.

  5. David E. Young, MD says:

    Is Abraxane better than Taxol alone. Probably a little. Perhaps somewhat less neurotoxicity. And there is almost never any of the myalgia that last a day or two after each Taxol infusion…. so better tolerated. Similar neutropenia. And, of course, there is no requirement for premedication as one does with Taxol. And keep in mind that there are patients who do have anaphalactoid reactions to Taxol even when they are premedicated. Those reactions never happen with Abraxane. So, there are some advantages in terms of better tolerance with Abraxane. Is it a better drug. Maybe, but not all studies have shown this. Some have showed Abraxane to be better then Taxol. Is it enough better to yield 6 billion dollars in profit for Patrick SS? Maybe not. The biggest disappointment, of course, is that the concept behind Abraxane was never realized in any other drug. Sure… for a while Abraxis tried the nanoparticle concept with other cytotoxics, including Taxotere and several unapproved cytotoxic drugs. But none of them should enough benefit to be pursued to late phase studies. (I guess Taxotere went to a late phase study and failed). So, the purported mechanism of making Abraxane did not work with anything else. To me this has been a huge disappointment. The drug, Abraxane succeeded, the concept failed.

    1. milkshake says:

      there are two main reasons why therapeutic nanoparticle field is slightly over the hill: 1) Low standards of research integrity throughout the field. Lots of mostly academic institution producing impressive SEM images and miraculous xenograft mice curves, but little reproducibility 2) formulating a drug into nanoparticle adds extra level of complexity (free drug in circulation, nanoparticle-bound drug in circulation, nanoparticles being filtered out by kidneys and liver, etc. and you really need good people in DMPK to unravel what is going on. Also, the excipients used to manufacture these nanoparticles could be finicky and behave in poorly predictable ways during the formulation, or they could be difficult and expensive to manufacture. And you have to worry about the biologic effects of the excipient. And so on. It is not a kind of a project that an academic group or a small biotech should take on.

    2. Imaging guy says:

      Professor Warren Chan of University of Toronto suggested that poor delivery of nanoparticles to the tumor is the reason why many nanoparticle therapies fail. He did a literature analysis and found that less than 1% of the injected nanoparticles is delivered to the tumor.
      “Analysis of nanoparticle delivery to tumours”, DOI: 10.1038/natrevmats.2016.14

      1. milkshake says:

        It depends very much on what nanoparticles, and what tumors. Even if the nanoparticles released their cargo outside tumor it could be useful as a fancy excipient that can prolong the time of the drug in circulation. A bigger problem is intentional misrepresentation, if for example a company claims fivefold increase of AUC for the benefit of the investors but carefully hides the fact that the number is calculated based on the data that sums up the free drug and the drug in circulation as nanoparticles (because the technique used to extract the the drug from plasma destroys the nanoparticle). This is cheating, full stop. A lack of science integrity endemic in the therapeutic nanoparticle field is what is killing it, not a lack of performance of this or that formulation.

      2. David E. Young, MD says:

        Curious, of course, because one of the important selling points of Abraxane was that it delivered the drug primarily to the tumor and therefore had a selective advantage over the plain Paclitaxel. As you state, maybe not. And that might be while attempts at using the technology for other anticancer drugs failed. So…. maybe the only advantage of Abraxane over Taxol is the ease of administration. And for that, Patrick SS made 6 billion dollars.

  6. Mulv says:

    Did the Sorrento team not bake diligence provisions into their asset purchase agreement?

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