Billionaire Soon-Shiong arranges a $71M crossover round for Conkwest

Patrick Soon-Shiong

Biotech billionaire Patrick Soon-Shiong is pumping $71 million into Conkwest as it preps a move to go public in a $172.5 million IPO.

Typically, a crossover financing like this would be used as a playing card in the IPO game. But Soon-Shiong doesn't always play by the same rules as everyone else in biotech. He invested $48 million in the Cardiff-by-the-Sea, CA-based biotech late last year, took the chairman's seat and then quietly took the CEO's job as he marshaled his forces to join the immuno-oncology fray. The billionaire just as quietly filed papers with the SEC yesterday about the latest financing, which was drawn from 9 unidentified investors anxious to buy in to the biotech ahead of the IPO.

Soon-Shiong has been executing a series of biotech deals through his umbrella operation NantWorks. He's formed close ties with Sorrento Therapeutics ($SRNE)--creating joint ventures and partnering on a next-gen Abraxane while naming Sorrento CEO Henry Ji to the board at Conkwest--as he built up a support network to advance next-gen CAR-Ts, dubbed CAR-TNKs. Sorrento is providing antibodies while Conkwest has the activated NK killer cell technology Soon-Shiong believes can create off-the-shelf treatments that can one-up pioneers like Juno ($JUNO), Novartis ($NVS) and Kite ($KITE).

Soon-Shiong has been providing ample injections of cash along the way.

In March, according to Sorrento's latest 10Q, Sorrento and NantWorks agreed to increase the funding for one of their joint ventures to $100 million. A month later the biotech struck a licensing agreement with NantCell which also includes a $100 million equity stake in Soon-Shiong's operation, to be triggered by a third-party financing.

Activated NK cells at Conkwest have been reengineered with CD16 receptors that bind to antibodies, offering a route to amp up the impact of such antibody drugs as Herceptin and Rituxan. CARs are being used to target antigens found on cancer cells. In addition to going after some well-defined antigen targets, Conkwest touts its technology's ability to target checkpoint inhibitors, "newly discovered" neoepitopes as well as some surface receptors found on cancer stem cells.

Aside from working with what the company calls a naturally superior cell killer, Conkwest believes that it can coordinate an NK as well as a T cell attack on cancer, using a PDL1 antibody. And because their activated NK cells don't have to be extracted from the patient, Soon-Shiong could vault past the pioneers and into the leadership at a crossroads of hot new cancer drug technologies.

That's a tall order, though, and Conkwest will need plenty of cash to execute on the plan. Soon-Shiong, who made a fortune developing and then selling Abraxane to Celgene ($CELG), appears ready to provide much of that himself, with plenty of investors anxious to join him.

- here's the Form D

(Clarification: This story has been edited to clarify the fact that a group of unidentified investors provided the crossover round.)  

Special Report: The 25 most influential people in biopharma in 2015 - ​Dr. Patrick Soon-Shiong

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