Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

Do you buy what Dr. Patrick Soon-Shiong is selling? 

The billionaire doctor, who made most of his approximately $9.7 billion fortune from selling drug companies APP and Abraxis, took his big-data-and-personalized-medicine venture NantHealth public on Thursday at $14 a share. It's his second IPO in a year; cancer-drug developer NantKwest went public last July. He is the CEO of both firms. 

Soon-Shiong's early track record is enviable. But the epic promises of his recent ventures have delivered little so far but big losses and outsize executive pay. NantKwest popped 39 percent on the day of its IPO. It's down 68 percent since going public, and down 77 percent from its post-pop heights. By early afternoon on Thursday, NantHealth was up 24 percent. That pop may not last, either. 

Pop and Drop
NantKwest's IPO skyrocketed on its first trading day. It hasn't fared well since. Will NantHealth's own first-day pop be similarly short-lived?
Source: Bloomberg

NantKwest was the first of Soon-Shiong's Nant-prefix family of companies to go public (there are as many as nine units under the overarching parent company, NantWorks). It is also the second-worst-performing biotech or pharma IPO of 2015, among those that raised at least $100 million. The only one that has done worse is Chiasma, which had its lead drug rejected by the FDA in April.

NantKwest's net loss was $236.9 million last year, and it may lose more this year, as it has boosted headcount, plans to launch multiple clinical trials, and is building manufacturing capacity. To be fair, big losses are de rigueur in early-stage biotechs, and lots of biotech stocks are down in an ugly market. But NantKwest's drop is still extreme.

Its focus on cell therapies for cancer puts it in an exciting but crowded field. Other firms such as Kite, Juno, and Novartis are much closer to bringing drugs to market, though NantKwest argues its focus on so-called "natural killer cells" is a superior approach. 

The company may be light on return, but it sure pays heavy. Soon-Shiong's $329.7 million in awarded pay from NantKwest in 2015 was the highest among executives tracked by Bloomberg. He's well ahead of Google's Sundar Pichai ($151.9 million) and Apple's Tim Cook ($74.2 million). NantKwest's plummeting share price puts the current value of the package at $142.6 million.

Leader of the Pack
Stock options granted before NantKwest's IPO made its CEO the most highly paid of the executives tracked by Bloomberg last year. By more than $150 million.
Source: Bloomberg

NantHealth at least produces revenue: $19 million in the first quarter. The company's mission, as described in its IPO prospectus, is dizzylingly complex, ambitious, and driven 10 feet underground by the weight of its own jargon. But essentially, it wants to combine and analyze data from many different sources and give rapid feedback to caregivers to help them make better decisions. NantHealth bills it as something like an all-knowing health-care supercomputer.

That sounds great. But hospitals still struggle just to keep electronic medical records straight. 

As it has pursued this dream, NantHealth has racked up big losses. Last year, its net loss was $72 million on $58.3 million in net revenue. And in the first three months of this year its net loss was $33 million, bringing its total accumulated losses to $324 million.

Competitors abound, ranging from smaller startups such as Foundation Medicine and Flatiron Health to behemoths such as IBM and GE. If NantHealth's products take longer than expected to fully develop and sell to hospitals, then investors may sour on the company. Continuing losses won't help. 

Soon-Shiong, inevitably, is going to be stretched thin. He's still running NantKwest and other still-private companies, owns part of the Los Angeles Lakers, and is meddling with both newspapers and toymakers. NantHealth expects him to work at least 20 hours a week, on average, but has no written agreement on that. He has yet to prove he's an Elon Musk-style multi-tasker able to build and run large and disparate businesses sustainably. 

Soon-Shiong has overcome doubters in the past and made a lot of money as a result. It's hard not to root for him to develop better cancer treatments or any kind of improvement to patient care. But his recent track record does not inspire confidence.

Correction: An earlier version of this story incorrectly said Soon-Shiong was founder of both NantKwest and NantHealth. He did not found NantKwest.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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