Sorrento Therapeutics (SRNE) has filed two lawsuits against Patrick Soon-Shiong and the entities he controls, for fraud and breach of contract in relation to Soon-Shiong’s purchase of the cancer drug Cynviloq from Sorrento in May 2015, according to a 8-k filing on April 3.
The lawsuits include an action in the Los Angeles Superior Court, on behalf of Immunotherapy NANTibody against NantCell, NANTibody board member and NantCell Chief Executive Patrick Soon-Shiong, and NANTibody officer Charles Kim, concerning several breaches of the June 11, 2015 limited liability company agreement for NANTibody entered into between Sorrento and NantCell.
Immunotherapy NANTibody is a joint venture between Sorrento and NantCell, a Culver City, Calif.-based subsidiary of NantWorks. Sorrento is a 40% shareholder of NANTibody and a 2.8% shareholder of NantCell, with its share is worth about $105 million.
In May 2015, the parties agreed that Soon-Shiong’s NantPharma would acquire Sorrento’s subsidiary, IgDraSol, which held the Cynviloq assets. The deal was valued at over $1 billion, made up of over $90 million in cash up front and an additional $1.2 billion in milestone payments, payable upon the completion of certain expected goals, including relevant FDA approvals.
Sorrento alleges that Soon-Shiong defrauded Sorrento by deliberately not pushing forward with FDA approval, letting critical patents lapse, and showing no interest in reaching the approvals included in the agreement.
Sorrento said that Soon-Shiong acquired Cynviloq so it would not come to market, in order to protect his billion-dollar interest in Celgene (CELG) and its drug Abraxane, calling the action a “catch and kill” scheme.
Sorrento is in the suit said it is seeking a declaration that the agreement between NantPharma and NANTibody is void, as well as an injunction to have NANTibody recover the more than $90 million drained from its account, allowing NANTibody to return to the business it was devised to do, which is to research, develop and bring to market immunotherapies to win the battle against cancer.
On behalf of NANTibody, Sorrento also seeks an injunction barring Soon-Shiong and Kim from serving as NANTibody directors or officers.