In evaluating the merits of a company, one promising indication of future success is to look at the pedigree of the company’s leadership. This is where most over-the-counter stocks fail miserably, and this is also wear success can beget further success for tenured executives who have proven their talents for creating value. One man, Patrick Soon-Shiong, has done just this and made himself the wealthiest American in the healthcare industry having amassed a fortune of $7.2 billion.
Soon-Shiong invented the first FDA approved nanoparticle delivery technology for the treatment of breast cancer, Abraxane, which is now approved in over 40 countries. The company he founded to develop and maufacture Abraxane, Abraxis Biosciences, was sold to Celgene for around $3 billion in 2010. Prior to that, Soon-Shiong founded and sold American Pharma Partners (APP) to Fresenius, a German dialysis company, for $5.6 billion, of which he got $3 billion. Now Soon-Shiong is looking to take his Midas touch and revolutionize healthcare with one of his NANTWORKS companies, NANTHEALTH.
Soon-Shiong has historically held on to a vast majority of the equity in his companies, and what better way to do so than through a holding company. NANTWORKS is Soon-Shiong’s holding company for various companies wearing the “NANT” brand as seen below:
Of the above companies, NANTOMICS, and NANTCLOUD are product offerings that fall under NANTHEALTH. NANTMEDIA and NANTBIOPHARMA seem to be operating in stealth mode with the latter taking in a $75 million investment from Celgene (NASDAQ:CELG) earlier this year. Nothing can be found yet for NANTMEDIA. NANTMOBILE is a technology company which is developing a mobile recognition technology platform. Of all these companies, it is NANTHEALTH that is emerging from stealth mode with some truly innovative products and solutions.
Founded in 2007, California based NANTHEALTH has taken in $166 million in funding so far including an undisclosed amount from Blackberry and a $100 million investment from the Kuwait Investment Authority, one of the largest sovereign wealth funds in the world. Just several weeks ago, Celgene (NASDAQ:CELG) also announced a $25 million investment in NANTHEALTH. Verizon has also made an undisclosed investment in NANTHEALTH to develop a secure fiber-optic, cloud-based data infrastructure to deliver multimedia healthcare information to mobile devices.
The Nanthealth Value Proposition
The entire ecosystem is referred to as the “clinical operating system” (cOS) and encompasses many potential verticals as seen below:
In order to enable the rapid data transmissions required when transporting healthcare data across the platform, NANTHEALTH has laid down 12,000 miles of fiber optics in 21 states across the United States. The cOS system which is installed at approximately 250 hospitals, connects more than 16,000 medical devices collecting more than 3 billion vital signs annually in 2013. NANTHEALTH’s drug discovery capabilities already include a comprehensive cancer clinical trials search engine, a database of thousands of clinical trials, and access to one of the fastest and most advanced infrastructures for genomic analysis in the world today. Using this infrastructure, NANTHEALTH has reduced reduced cancer genome analysis from months to seconds at a rate equivalent to 47 seconds per patient. 50% of oncologists in the U.S. are currently utilizing a fact-based software platform from NANTHEALTH called eviti. Using this platform, the number of cases where doctors have made incorrect recommendations has dropped from 32% to virtually zero. Over the past 12 months, over 2,000 oncology practices have installed and began using eviti to positively impact thousands of cancer patients lives. NANTHEALTH also offers a medicine adherence product called GlowCaps which is integrated into the cOS platform. GlowCaps are caps for prescription bottles that alert the user they need to take their medicine with visual indicators and sound.
The cap is also smart enough to know when you last took your medicine and can even send texts or emails to patient/doctor/family if it thinks you’re not following your medicine regime. It will also contact the pharmacy and arrange for your refill via a button you press on the cap. These are just some of the promising value propositions made available by the cOS platform. The amount of traction made already in cOS platform usage and adoption by oncologists is impressive for a company just exiting stealth mode.
Soon-Shiong has already closed $100 million in funding for his startups from Celgene, a company that knows him well having given him $3 billion for his last successful company, Abraxane. The KIA is no doubt a very scrupulous and risk averse investor given the fact that they are a sovereign wealth fund and yet they have invested $100 million into NANTHEALTH in a single round. Backing from these two entities shows that the aspirations Soon-Shiong has to create an ecosystem that will revolutionize healthcare may well just come to fruition. If an exit strategy is to go to the public markets and look to get acquired like in the case of his previous two companies, investors may get a chance to participate in a future IPO.
As we continue to follow NANTHEALTH’s progress, we’ll also look to deep dive into more of Soon-Shiong’s NANTWORKS companies as they move out of stealth mode and more information about them becomes available. Here’s an overview of 11 “NANT” companies.
One firm that allows you to buy shares in startups before they IPO is Motif Investing. You can open a Motif Investing account for free with no deposit required so you are ready to buy shares of future IPOs before they begin trading.