When biotech billionaire Patrick Soon-Shiong bought Sorrento’s new cancer fighting drug, he might not have had the company’s best interests at heart. At least that’s what CEO of Sorrento, Henry Ji, is alleging in a lawsuit recently filed with the Los Angeles Superior Court.
In the complaint, Ji tells a Shakespearean tale of big dreams, broken promises and betrayal most foul with Soon-Shiong cast as the villain who brought woe onto Sorrento’s unsuspecting head. Their suit seeks judgment on Soon-Shiong’s dealings with Sorrento over the last four years. Their first claim outlines how the billionaire bought the company’s new treatment for pancreatic cancer – called Cynviloq – for $90 million up front and another $1.2 billion in milestone payments.
Cynviloq was to be a challenger to Soon-Shiong’s own Abraxane – a pancreatic cancer chemotherapy treatment already being marketed by pharmaceutical giant Celgene. The original intent, the company believes, is that Soon-Shiong’s company, NantPharma, bought Sorrento’s drug to protect his stake in the market. He would use the proceeds earned from new drug sales to offset Abraxane losses.
The suit also states that Soon-Shiong holds a significant stake in Celgene which is on the verge of being bought by Bristol-Meyers Squibb. Sorrento asserts their competing cancer drug would have hurt Celgene’s stock – leaving Soon-Shiong at risk of losing hundreds of millions in the deal.
When Celgene passed on purchasing Cynviloq due to antitrust issues and Soon-Shiong learned that drug competitor Sandoz was courting Sorrento, he balked and made an offer the company couldn’t refuse. They inked the deal and Sorrento was satisfied that it would be smooth sailing from there. Unfortunately, four years have passed and nobody is using the term ‘smooth’ to talk about Cynviloq sailing anymore.
In their statement, Sorrento has said that NantPharma engaged in a “catch and kill” scheme to shelve Cynviloq after making promises to turn their chemotherapy drug into a commercial success. When Soon-Shiong’s biotech business failed to renew patents and left the drug languishing in pharmaceutical purgatory, Sorrento lost out on potential profits.
But there is more to the story than the Cynviloq drug ‘pay and delay’ tactic that Sorrento was concerned about. At the time the San Diego-based business signed their 2015 contract with NantPharma, they also established a joint-venture devoted to immunotherapeutic antibody cancer drug R&D, aptly named Immunotherapy NANTibody.
As part of that arrangement, Ji put $40 million towards the $90 dedicated to the JV. Two years later, the fund was nearly depleted. “The transaction drained the NANTibody joint venture of nearly all of its contributed capital – including, most critically, nearly all of Sorrento’s $40 million contribution,” the complaint stated. Sorrento alleges that Soon-Shiong and his chief legal counsel conspired for NANTibody to secure Cynvoliq assets in exchange for a $90 million payout.
Soon-Shiong’s reply to the suit was both scathing and swift. His office issued its own statement within 24 hours of Sorrento’s release: “The lawsuit is a cynical attempt to deflect from Sorrento’s own breach of contract. The allegation that we have not developed Cynviloq to protect the sales of Abraxane is false and it ignores the facts. Because it is total without merit, we shall defend ourselves vigorously against this baseless allegation.”
The complaint cited NantPharma’s own list of Sorrento sins, including misrepresentation and breach of contractual obligations. How the pharmaceutical finger-pointing will play out in trial remains to be seen but both companies indicated they looked forward to litigating the case to the fullest extent of the law.
