NantHealth stock plummets after second damning report on Patrick Soon-Shiong
NantHealth shares continued their plunge on Tuesday following a Stat report that claims founder Patrick Soon-Shiong, MD, used charitable donations to bolster his health tech company.
After the stock closed at $5.50 a share on Monday – the lowest since the company went public in June 2016, shares continued to fall more than 12 percent to around $4.83 a share in early Tuesday trading.
Soon-Shiong made a $12 million donation to the University of Utah in 2014, according to the Stat report. But the donation came with strings: The university was required to spend $10 million with NantHealth on genetic sequencing, and NantHealth included those tests in the tally given to investors of orders for its diagnostic tool, GPS Cancer.
The report claims the University of Utah tests weren't related to the GPS Cancer tool and instead were pre-clinical research sequencing. University officials told Stat they were unaware of why the tests would be counted under GPS Cancer.
In a letter to investors, Steven Harper, an analyst for Cantor Fitzgerald, said the company's stock is a better value than suggested by its current price, according to Stat. Further, Harper said the firm had no issue with the classification of the University of Utah's orders, as it wasn't counted as revenue.
Rosen Law Firm is investigating potential securities claims on behalf of NantHealth shareholders, as is the law firm of Block and Leviton. The firms are determining if investors can bring claims to recover losses under federal securities laws.
This isn't the first controversy for Soon-Shiong this year. In February, another Stat report suggested Soon-Shiong's cancer program hasn't clearly made or tested scientific advances, but is instead merely a publicity ploy for the founder.
Soon-Shiong recently debuted an AI cloud platform during HIMSS17 in February. The platform is backed with a fiber-optic infrastructure that can process genome activity of cancer tumors at high speed. He also announced the U.S. Food and Drug Administration gave the greenlight to advance the company's cancer vaccine into later stages of clinical trials.