NantHealth, Digital Health Subsidiary of World's Richest Doctor Patrick Soon-Shiong, Files for IPO

NantHealth, the digital health subsidiary of Patrick Soon-Shiong’s NantWorks—Soon-Shiong being dubbed by Forbes as the world’s wealthiest physician—has recently filed for an initial public offering (IPO), seeking to raise $92 million. Previously, the electronic medical platform provider NantHealth had secured over $680 million in investments from Allscripts, BlackBerry, and the Kuwaiti government.

Patrick Soon-Shiong had been preparing for NantHealth’s IPO for some time, announcing the plan as early as late 2015, yet there was little news for a prolonged period. Regarding the reasons for the delay, he stated in an interview with the Los Angeles Times: “We were essentially ready to go public, but we did not want to launch an IPO during a bear market, so we postponed the listing.”

NantHealth’s IPO S-1 filing reveals that the company has been incurring annual losses. Last December, its net revenue was $58.3 million, while its net loss reached $72 million. Although the magnitude of the loss is narrowing, the company did not commit to long-term profitability in the filing. Nevertheless, the S-1 document provides a more comprehensive and compelling description of its product portfolio and customer base than previously disclosed.

In its S-1 filing, NantHealth stated: “Over the past decade, we have developed an adaptive learning system—CLINICS. It comprises our proprietary software, middleware, hardware systems, and other foundational infrastructure. This system enables us to collect, index, analyze, and interpret recent and historical data spanning molecular, clinical, operational, and financial domains, thereby helping us continuously improve decision-making capabilities and optimize clinical protocols and decision algorithms. As a pioneer in the fields of big data and augmented intelligence, we believe we will capitalize on significant and diverse market opportunities. This is driven by the transition of healthcare providers and payers from fee-for-service to value-based care models, which will further spur the adoption of predictive, evidence-based clinical practices.”

However, what was not mentioned in the S-1 filing is that last year, two former employees sued NantHealth for engaging in improper activities, including violations of HIPAA and FDA regulations. The case was later dismissed because the relevant legal issues involved local Florida statutes rather than federal law.

NantHealth has integrated various technological products into its CLINICS platform. According to NantHealth’s data, its customer base includes more than 2,000 hospitals and health systems worldwide, over 70 health plans, and other entities, with the platform aggregating data on more than 100 million patients.

For more information on NantHealth, VCBeat will provide a detailed case analysis in a subsequent article.