NantHealth cuts 300 employees, shrinks workforce by a third
NantHealth will lay off 300 of its employees -- or one-third of its workforce -- to lower expenditures following news that it lost $70 million in the second quarter.
Officials said cutting back its workforce and other recent steps taken by the company will result in significant reduction of operating losses: $70 million in annualized cost savings.
The news follows the announcement that Allscripts will purchase NantHealth’s provider and patient engagement business in an all-stock deal.
The latest business moves essentially amend agreements made in 2015: one with Allscripts and another with Harris Healthcare. Allscripts purchased a 10 percent stake in NantHealth in return for $200 million in 2015. Buying Harris provided NantHealth control over FusionFX.
With its purchase, Allscripts used 15 million of its shares in NantHealth to buy FusionFX and other assets.
NantHealth has been hemorrhaging money while embroiled in controversy over founder Patrick Soon-Shiong’s business dealings. The company posted $184 million in losses in 2016. And when it went public in June 2016, NantHealth stock sold at $18.54 a share. At the time of publication, the stock is selling at $3.62.
Three damning reports this year -- one from Politico, two from Stat -- called into question how Soon-Shiong does business. One report claimed he used charitable donations to help NantHealth, while another said NantHealth’s cancer moonshot initiative was a mere marketing ploy.
The third report questioned Soon-Shiong’s potential conflicts of interest.
Soon-Shiong has blasted all negative claims as false and posted a banner on the NantHealth website about the harm of ‘false reporting.’
Despite these controversies, Soon-Shiong was named to the Health IT Advisory Committee by House Speaker Rep. Paul Ryan, R-Wisconsin in May. The biotech mogul also recently purchased stake in California-based Verily Health -- a health system made up of six hospitals.