Biotech billionaire Soon-Shiong steers immuno-oncology player Conkwest to $172.5M IPO

Patrick Soon-Shiong

Patrick Soon-Shiong thinks he can beat CAR-Ts in the clinic. And after quietly taking control of a small biotech named Conkwest, the biotech billionaire is now floating a $172.5 million IPO in a sizzling hot market to raise new funds for the midstage program that lies ahead.

Late last year Soon-Shiong, best known for developing and selling Abraxane for a fortune, stepped in to invest in Conkwest. A few months ago, after gaining a majority stake in the company, he quietly took the CEO/chairman's job, adding Cardiff-by-the-Sea, CA-based Conkwest to the growing network of biotechs he either owns or collaborates with.

According to papers filed with the SEC late Friday, Soon-Shiong's Conkwest is working on next-gen, off-the-shelf adaptive cell therapy technologies to fight cancer. Looking to step ahead of CAR-T pioneers like Juno ($JUNO) and Novartis ($NVS), which are reengineering T cells by adding chimeric antigen receptors (CARs) that make them into personalized cancer-cell-killing vehicles, Soon-Shiong's Conkwest is adapting an engineered lineup of natural killer cells, or NK cells, that he believes will be much more efficient cell assassins.

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.

Sorrento Therapeutics, a frequent partner of Soon-Shiong's growing cancer R&D empire at NantWorks, signed a collaboration deal with Conkwest late last year.

Hans Klingemann is the founding scientist at Conkwest and stands to earn a single-digit royalty from any sales at Conkwest, which used to be called ZelleRx. To get to this stage, Conkwest has spent a mere $17.7 million, a rounding error in the world of Big Pharma R&D.

The public market for biotech stocks has grown so hot, though, that investors are paying less and less attention to any track record a company may have, and more and more attention to how new technology can radically alter the landscape of the pharma market. In this case, Soon-Shiong's heavyweight rep in the business--despite a nasty lawsuit from some ex-employees--will likely make up for any uncertainties about investing in a fledgling operation with little in the way of data to put on exhibit. And immuno-oncology has become one of those buzz phrases that can investors seem to almost automatically respond to.

Soon-Shiong's investment arm controls 62% of Conkwest's stock, followed by Sorrento at 8%. Klingemann owns 3.5% of the stock.

- here's the S-1

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

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