NantHealth founder Soon-Shiong hit with lawsuit over attempted takeover
NantHealth founder Patrick Soon-Shiong and two additional pharma executives are being sued by attorneys Boyden Gray and Adam Waldman of Washington, D.C., for allegedly attempting to acquire Altor Bioscience through a sweetheart deal.
Altor is a 15-year-old immunotherapy company, with 12 ongoing human clinical trials.
The lawsuit, filed Wednesday, asserts that the deal in place benefits Soon-Shiong, Hing C. Wong and Fred Middleton -- all board members of Altor Bioscience. The deal comes at the expense of the minority shareholders, which breaches their fiduciary duty.
With the alleged “insider transaction,” Altor stock would be acquired by NantCell, which is owned by Soon-Shiong. The lawsuit alleges that Soon-Shiong “caused Altor to enter into a definitive agreement and plan of merger” on May 19. In doing so, all outstanding Altor shares would go to NantCell.
The “outrageously low $290 million” purchase price is “inexplicably and substantially lower than the company’s last valuation ($309 million) in December 2016,” the complaint says. The attorneys claim that Soon-Shiong is further low-balling other shareholders by offering the stock at half-price.
The attorneys claim that Soon-Shiong is attempting to rush through a deal that lets NantCell purchase Altor at a significantly lower price. Grey and Walden are seeking a temporary restraining order that would halt the purchase and assert the company didn’t have independent directors evaluate the transaction.
Soon-Shiong was recently named to the U.S. Department of Health and Human Services Health IT Advisory Committee by Paul Ryan, despite being embroiled in a handful of controversies surrounding his nonprofits.
Soon-Shiong has blasted the claims and posted a banner on the NantHealth website about the harm of what he calls ‘false reporting.’