Altor investors amend suit against Patrick Soon-Shiong, claim mogul paid off board members

Altor Bioscience stakeholders say the NantHealth CEO low-balled the company’s value and paid off two directors in an attempt to buy the company through a sweetheart deal.
By Jessica Davis
03:03 PM
Soon-Shiong lawsuit

Washington, D.C. attorneys Boyden Gray and Adam Waldman, stakeholders in Altor Biosciences, filed an amended lawsuit against NantHealth founder Patrick Soon-Shiong, MD, on Wednesday night.

The new suit is an update to the June 21 lawsuit filed by Gray and Waldman, which claimed Soon-Shiong is attempting to acquire Altor through a sweetheart deal.

In the new suit, the attorneys allege that Soon-Shiong provided two Altor directors with substantial sums to attempt to buy their vote for the merger.

[Also: NantHealth founder Soon-Shiong hit with lawsuit over attempted takeover]

Further, Waldman and Gray claim that Soon-Shiong misled shareholders by providing false data from the results of NantCell’s Phase II clinical trials of a pancreatic/colorectal drug. While touting its success, the attorneys claim new data points to Soon-Shiong “actively taking steps to shut down” the program.

In an attempt to intentionally mislead minority shareholders as to the value of NantCell, the attorneys said that Soon-Shiong failed to disclose this information.

“[The complaint allegedly] shows Soon-Shiong provided the two -- absurdly termed ‘disinterested directors’ who approved the merger -- up to tens of millions of dollars of stock and benefits in both Altor and NantCell,” Waldman said. “It also shows the lengths Soon-Shiong has gone to hide both the stunning clinical successes of Altor and the clinical failures of NantCell.”

[Also: Patrick Soon-Shiong sued over capital investment in biotech firm]

“The litany of self-dealing transactions and tens of millions of shares Soon-Shiong has feasted himself and his ecosystem of companies on at our Phase 3 immuno-oncology company is also breathtaking," he continued.

The amended lawsuit is just one of numerous suits filed against Soon-Shiong and his companies. This week, a lawsuit from a Precision Biologics stockholder accused the biotech mogul and the company’s controlling board members of wrongfully diverting capital.

Other lawsuits were filed after three damning reports in the Spring -- two from Stat and one from Politico -- that called into question Soon-Shiong’s potential conflicts of interest, expenditures of his nonprofit business dealings and questionable donations.

Despite these ongoing controversies, Soon-Shiong was named to the U.S. Department of Health and Human Services Health IT Advisory Committee by Paul Ryan. Further, Soon-Shiong recently acquired controlling stake in Verity Healthcare, a California health system

Twitter: @JessieFDavis
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