NantHealth, the digital health wing of Dr. Patrick Soon-Shiong's NantWorks portfolio of companies, has registered for an initial public offering. The filing was for a $92 million IPO, which seems quite low for a company that regularly secured nine-figure investments, but is likely just a placeholder. NantHealth has raised at least $680 million from investors that include Allscripts, Blackberry, and the government of Kuwait.
Soon-Shiong has been talking about taking NantHealth public for some time; he originally announced plans to do so by the end of 2015. The delay, according to the LA Times, was due to a perceived unfriendly climate for biotech stocks.
“We're basically ready,” he told the LA Times last fall. “The problem is, we don't want to go out in the current market. There is no reason for us to go out there in a bear market.”
The company’s S-1 contends that NantHealth has lost money consistently every year. In December, their total net revenue was $58.3 million and their net loss was $72.0 million. That loss margin is shrinking, but the company doesn’t promise long-term profitability in the document, instead noting “we have incurred significant net losses in each fiscal year since inception and expect to continue to incur net losses for the foreseeable future.”
The S-1 presented a more complete and cogent description of NantHealth’s product portfolio than the company has offered previously, as well as insights into the size of their current customer base.
The company has combined its various tech assets into a platform called “Comprehensive Learning Integrated NantHealth Intelligent Clinical System” or CLINICS. It includes the company’s large NantOS app suite, the GPS Cancer genomic insight platform licensed from sister company NantOmics, their HBox remote monitoring hub, and even, as a fairly minor piece, Glowcaps and GlowPack, the connected medication adherence tools the company acquired from Vitality in 2011.
“For nearly a decade, we have developed an adaptive learning system, CLINICS, which includes our unique software, middleware and hardware systems infrastructure that collects, indexes, analyzes and interprets billions of molecular, clinical, operational and financial data points derived from novel and traditional sources, continuously improves decision-making and further optimizes our clinical pathways and decision algorithms over time,” the company states in the S-1 filing. “As a pioneer in the era of big data and augmented intelligence, we believe we are uniquely positioned to benefit from multiple significant market opportunities as healthcare providers and payors transition from fee-for-service to value-based reimbursement models and accelerate their pursuit of evidence-based clinical practice.”
As for adoption, NantHealth boasts that “in the aggregate, one or more of our solutions or platforms are implemented by clients that include over 2,000 hospitals or health systems, over 70 health plans, and a large, self-insured employer in the United States and internationally.” That amounts to more than 100 million patients on NantHealth’s provider and payor platforms.
The S-1 bears no mention of the lawsuit leveled against NantHealth last year, in which two former employees accused NantHealth of engaging in a multitude of fraudulent activities, including violations of HIPAA and FDA regulations. The employees sued based on Florida whistleblower law that prevents employees from being fired for speaking out against their company. NantHealth has denied the accusations.
That case was dismissed in June of last year on jurisdictional grounds: the judge ruled that the involvement of HIPAA and FDA wasn’t sufficient to bring the case to federal, rather than state court, since the law at issue was a Florida statute.Zoom Kobe XII ZK12