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Physician turned entrepreneur begins work with new patients: Union-Tribune and L.A. Times

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Growing up in apartheid South Africa, the son of Chinese immigrants, Dr. Patrick Soon-Shiong got his information and entertainment from daily newspapers. Television was banned in that country until he was 23.

When he started saving money for college, he turned to newspapers again, plucking hundreds of copies warm off the presses of the Port Elizabeth Evening Post and scampering around the city to sell them.

And now, at age 65, after amassing a multibillion-dollar fortune as a physician and biotech entrepreneur, he’s gone all in with newspapers, buying The San Diego Union-Tribune, the Los Angeles Times and a string of community publications in Southern California for an eyebrow-raising $500 million. The deal is expected to close this month.

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“It’s in my blood,” Soon-Shiong said in a recent interview at the Culver City headquarters of NantWorks, the umbrella organization for a group of health-care and diagnostic companies he founded that are trying, in his characteristically ambitious words, “to transform how we work, live and play.”

Transformation has been a difficult puzzle for newspapers. The digital age and its shifting economic models have scattered audiences and eroded revenues, so just how Soon-Shiong’s stewardship might alter that trajectory remains to be seen.

Although he didn’t say how much, he promised to put money into the products, investing first in the technological infrastructure that enables content to be moved quickly and seamlessly onto the array of platforms (print, web, mobile, podcasts, video) that people use now to consume information.

And he said he’s in it for the long haul, envisioning multi-generational family ownership in the vein of the Chandlers (L.A. Times), the Grahams (Washington Post) and the McCormicks (Chicago Tribune), legendary titans who molded their newspapers into powerhouses that shaped their cities, too.

“If you could create that kind of impact and legacy,” Soon-Shiong mused out loud.

“They’re basically families that have taken this on as institutional value to the community, and built this on behalf of the community rather than a profit-based, private-equity run system,” he said. “Not that there’s anything wrong with that, from a capitalist perspective, but for this kind of institution I always say I see this as a public service in the private sector.”

He said he bought the publications, joining a recent string of billionaires acquiring papers in Boston, Minneapolis, Las Vegas, Salt Lake City and Washington, D.C., because robust journalism is “a form of protecting democracy.” That’s especially important amid ongoing revelations about “the dark side of technology” being used via Facebook and other social media to manipulate voters with misinformation, he said.

The purpose of a newspaper, in his view, is “speaking truth to power.” He repeated that phrase several times during the interview and openly toyed with the idea of putting it in the mastheads of his publications, another nod to the historical sway and swagger of major metropolitan dailies.

Listen to the interview with Soon-Shiong »

An outsider, underdog

Of course, Soon-Shiong is a power himself, and was so before he bought the newspapers, although he isn’t well-known outside the medical and biotech worlds, even in Los Angeles, where he has lived for almost 40 years and is a minority shareholder (and courtside season-ticket holder) of the Lakers.

A native of Port Elizabeth, a coastal city, he is the fifth of eight children born to parents who fled China after the Japanese invaded during World War II. His parents ran a general store, and his father was a healer and herbalist in a neighborhood where apartheid residency laws forced Chinese immigrants to congregate. Neighbors routinely knocked on the door when they had a fever or a cough.

Soon-Shiong went to segregated schools and rode segregated buses, and he said he was reminded recently, watching events surrounding the 50th anniversary of Martin Luther King Jr.’s assassination, that racism was very much a part of his environment growing up. He admired the newspapers that took on the government, saw them as an important “form of resistance to the daily life.”

The sense of being an outsider and an underdog followed him after he graduated from high school at 16 and got his medical degree at the University of Witwatersrand in Johannesburg at 23. He needed permission to work at a hospital that was reserved for whites. He got paid half what the other doctors did.

In 1977, he and his wife, Michele B. Chan, moved to Canada so he could work as a surgeon in Vancouver. Three years later, he followed a mentor to Los Angeles, where he soon was on the faculty at UCLA and she was working as a television actress (“Danger Bay,” “MacGyver”). They have two children, a son and a daughter.

Soon-Shiong made headlines at UCLA for performing the first pancreas transplant on the West Coast, and by the early 1990s he was on his own, starting drug-development companies.

He caught the eye in San Diego of Dr. Ivor Royston, who co-founded the first biotech company here, Hybritech, and then went into venture capitalism. Soon-Shiong pitched a diabetes treatment that Royston thought was novel enough to merit investment.

“His approach was imaginative, creative and very visionary,” Royston said. “Even then, those characteristics came together very clearly.”

Not much resulted from that venture. Soon-Shiong went on to other, far more lucrative things.

“I should have stuck with him,” Royston said. They are working together again now, Royston as CEO of Viracta and Soon-Shiong as a minority shareholder in the company and one of its board members.

Business success, controversy

In 1991, Soon-Shiong came up with a way to wrap a cancer drug, Taxol, inside the human protein albumin, boosting its efficiency, and called it Abraxane. Some oncologists dismissed it as nothing new, but Soon-Shiong kept refining it and in 2005 the FDA approved its use for breast cancer. Now it also treats pancreas and lung cancers, and last year its worldwide sales approached $1 billion.

He also acquired a generic drug company, which he renamed American Pharmaceutical Partners. Its version of the blood-thinner heparin drew plaudits — and a bump in stock prices — after a contamination outbreak in other thinners killed dozens of people.

Soon-Shiong split the companies, keeping the generic drugs in one and Abraxane in the other. He sold the first in 2008 to a German company for $4.6 billion, and two years later sold the other to pharmaceutical giant Celgene for almost $3.8 billion. The deals made him wealthy; Forbes had him at No. 55 on its 2017 list of America’s 400 richest people, at $8.3 billion.

They also enabled him to pursue what Forbes has referred to as “Medicine’s Manhattan Project,” a web of almost a dozen companies that he envisions will revolutionize the treatment of disease, especially cancer, through a combination of science, data and technology. All the companies have in their title “Nant,” taken from an Apache word that translates into “he who speaks for the people.”

It aims, among other things, to use fast genome sequencing to better identify mutations and what causes them, target them with the most effective drugs, and monitor patients at home with real-time information shared instantly among doctors and hospitals.

“I think I’m more excited now than I have ever been in my entire career about how close we are to understanding what causes the cancer and how we can overcome it,” Soon-Shiong said.

His pursuits have brought him media attention and requests to appear at medical conventions and scientific conferences. He was featured on “60 Minutes,” met with then-Vice President Joe Biden on a cancer “moonshot” initiative and talked with newly elected President Donald Trump about the state of health care in America. (“Unsustainable,” Soon-Shiong calls it.)

“I’ve had him come to speak to two of our conventions,” said Joe Panetta, president and CEO of Biocom, a California life science trade group headquartered in San Diego. “Both times you could have heard a pin drop in the audience because people were so captivated by what he had to say about personalized medicine and cancer.”

But his bold predictions about winning the war on cancer and his ambitious plans for NantWorks to revolutionize health care have also raised the hackles of some doctors, who see him as too much of a showman.

“His sense of hypomania as he pursues this can be overwhelming,” Dr. Eric Topol, a prominent cardiologist and geneticist at Scripps Research Institute, told the Huffington Post four years ago. “But he has had a career of purposeful activity so far, to be sure. I am very supportive of the concept he is pursuing. I hope he can do it, and maybe he is the kind of guy who can do it.”

There have been lawsuits from unhappy investors, including one involving Cher, who accused him of fraud in a stock transaction. He denied any wrongdoing, and the suit was dropped recently.

Last year, Stat, an online healthcare publication associated with the Boston Globe, raised questions about a $12 million donation Soon-Shiong’s foundations made to the University of Utah, which then paid one of his companies, NantHealth, $10 million to sequence patients’ DNA.

Soon-Shiong denied anything improper and said NantHealth lost money on the sequencing. A legislative review criticized the university for not following contract-bidding guidelines but also applauded the scientific advancements and additional grants that emerged from the work.

One thread that runs through some of the controversies is a characterization of Soon-Shiong as someone who over-promises and under-delivers. He said he expects the criticism.

“I recognize it’s a complaint that will come when you are working in areas that are on the cutting edge, when you are dealing with areas of great complexity and you are dealing with areas where you are trying to force change,” he said. “I think the only way to really judge is to look at the outcomes, to look at the data, of what we have accomplished.”

Learning curve

Friends and colleagues describe Soon-Shiong as perpetually busy, a focused, ambitious and sometimes impatient boss. “The first word they use when they tell me about him is visionary,” Panetta said.

In person, during the recent interview, he was relaxed and cordial. When asked what he does when he isn’t working, he laughed. “I don’t think this is work, actually,” he said. “That’s the beauty of what I’m doing here. I perceive it as just satisfying my insatiable curiosity.”

His one professed hobby is basketball. He has an indoor court at his Brentwood estate — a compound created by acquiring and then bulldozing neighboring homes — and regularly plays games there. He’s called the sport “the one activity where I really truly relax.”

Lately he’s been spending time trying to learn more about the media world. He’s met with Donald Graham, former owner of The Washington Post. PBS anchor Judy Woodruff and her husband, Al Hunt, a Bloomberg columnist. Retired media executive Norman Pearlstine (Time, the Wall Street Journal). Ann Marie Lipinski, former editor of the Chicago Tribune and now curator of the Nieman Foundation at Harvard.

“He exhibited a lot of enthusiasm for the challenges ahead and expressed his and his family’s long-term commitment to the company,” Lipinski said in an email to the Union-Tribune. “This is new territory for him and he seems to be talking to quite a few people in the industry and be eager to learn from others.”

Soon-Shiong’s main interest is clearly the Times, his hometown paper, which has been wracked by turmoil. He’s been trying to acquire it for at least two years, ever since his firm NantCapital invested $70 million in the current owner, Tronc. He wants the Times to perform again at the same level as The New York Times and The Washington Post, which he said is why he was willing to pay a high price to acquire it.

But that doesn’t mean the Union-Tribune is the unwanted stepchild, he said, acknowledging, with a reference to the Chargers, the sensitivity many San Diegans feel about being big-footed by Los Angeles.

“Look, San Diego is an important city,” said Soon-Shiong, who will be the fifth owner in the past decade of the 150-year-old Union-Tribune. “It has strengths that L.A. does not have. It is a community in its own right with its own vibe and feel. People in San Diego never want to live in L.A. and some people vice-versa and so we need to tell the stories that are important to that community. So this is not an L.A.-driven San Diego paper, if that’s the concern. It cannot be because that would defeat the purpose.”

He pointed out that one of his companies, NantKwest, has offices in San Diego. He also has long-standing ties to the medical and biotech sectors here. He said he plans to get more involved with the local community.

In the beginning, he will be the owner of the papers, not the publisher. That will put him further away from the daily operations of the newsroom, which might be significant when it comes to covering his other enterprises.

“The news has to be the news,” he said. “It is what it is. It’s honest, it’s truthful, unvarnished and untainted by any interference by anybody, including the owner.”

He described his politics this way: “I support the right and I support the left and I support the middle as long as they are going to make an impact that is truly, truly, truly for the common good. I don’t know what you call that. I’m registered as an independent and I mean that. So I’ll support the Republican and I’ll support the Democrat and I’ll support an independent if they truly mean what they say and do something which I think will affect the common good.”

A doctor first

Mostly, he said, he views issues through the eyes of a physician. “If you have cancer, I’m going to help you whether you are a Republican or a Democrat,” he said. “I think of life that way.”

Royston, the San Diego biotech executive, said that’s a key to understanding Soon-Shiong.

“He’s a doctor first,” Royston said. “I don’t think people really understand that. In his heart he is a physician who wants to help people.”

Five years ago, Kimberly Doede Schleef, the daughter of a friend of Royston’s, was diagnosed with cervical cancer, “a death sentence,” in the words of her father, Robert Doede. “They sent her home to die.”

Doede talked to Royston about having genome sequencing done on the tumor to understand the DNA mutation that caused it. That’s the kind of massive-data analysis Soon-Shiong does with his companies, and when Royston approached him, he agreed to do it for free.

The sequencing showed she had an abnormality usually found in breast cancer. So they treated her with a breast cancer drug, and it prolonged her life.

“Patrick is controversial,” Doede said, “but I have to tell you, he made an extraordinary move for me and my daughter. He gave her another 15 months.”

Royston said what he expects San Diegans will see in the newspaper’s new owner is someone “who doesn’t mind spending money on things that have value to society.” Soon-Shiong agreed, to a point.

“It’s clearly a public trust and it’s not a philanthropic venture,” he said. “If it was a philanthropic venture, I’d make a grant and hope you do well. It’s really a venture to invest and create sustainability. In order to be a public trust, you need to create public sustainability. The Catholic nuns taught me: no money, no mission.”

He said the stakes are high, and not just in San Diego and Los Angeles.

“There are hundreds of independent newspapers now that are sort of failing,” he said, “and I think that is a disaster.”

john.wilkens@sduniontribune.com