Henry Ji's suit alleges that Soon-Shiong's NantPharma did a "catch-and-kill."
Will a lawsuit spawned in San Diego by the wheeling and dealings of Patrick Soon-Shiong ultimately force the Los Angeles billionaire to divest himself of the San Diego Union-Tribune, as well as the L.A. Times as early as this summer?
So goes a theory of Poynter Institute Media Analyst Rick Edmunds in an March 4 online dispatch regarding the trials and tribulations of Soon-Shiong and his Southern California papers.
Alden Global Capital appears to be "the most likely to win any bidding contest for the Los Angeles Times, along with the San Diego Union-Tribune and some real estate," says Edmunds in light of mounting speculation that Soon-Shiong may need the cash.
"A tipster pointed me to a $1 billion suit Sorrento Therapeutics brought against Soon-Shiong's NantPharma in April 2019," writes Edmunds. Biotech Sorrento was founded here in 2006 by Henry Ji, who got his undergrad training at China's Fudan University and a Ph.D. at the University of Minnesota.
A 2015 drug deal by Soon-Shiong's NantPharma is at the root of the ongoing courtroom clash, which began in 2019. "The suit alleges that Nant did a 'catch-and-kill' when it took a majority stake in a promising drug of Sorrento's, then stopped its development," notes Edmunds.
"Soon-Shiong's true purpose, the suit charges, was to clear the way for developing a similar drug NanPharma had in the works." Mandatory arbitration begins July 22, the columnist says.
"Even a settlement at a fraction of the damages Sorrento seeks could run to hundreds of millions of dollars. That would leave Soon-Shiong hungry for cash at a time when he is also funding expensive initiatives at his biotech company."
Then there is the not insubstantial matter of finding newspaper talent to run the Times. "Particularly telling is that Soon-Shiong has never hired a publisher with industry experience. He essentially fulfills that role himself while still tending to entrepreneurial biotech work and trying to invent cancer treatments and now Covid-19 drugs."
"Given the circumstances, and the time and money a next stage would require, it seems more likely Soon-Shiong will exit, likely swallowing a loss on his $600 million in investments in the Times."
Meanwhile, down in San Diego, Soon-Shiong's strategy has appeared to be converting the U-T into the wokest paper in America while reducing advertising and daily page counts.
Enter Alden Global Capital, the industry bad-boy that has been snapping up newspapers across the country, vowing to remake the businesses but often selling off premises and gutting staff.
"Alden CEO Heath Freeman and founder Randall Smith have become known as grim reapers as they pull profits from titles like the Denver Post," writes Edmunds.
"Alden are cost-cutters supreme, but Freeman and Smith clearly also know how to wage a relentless takeover campaign and drive a hard bargain."
"Most promising financially for Alden would be control of the Los Angeles Times, a ring of suburban dailies near Los Angeles, the Orange County Register (which it already owns), and the San Diego Union-Tribune (which comes with the Times). That would amount to control of the huge Southern California market, with half the megastate's 40 million residents."
Anti-trust resistance from the Biden Administration might interrupt Alden's best-laid plans to control Southern California. Alden owns the dailies in San Bernardino and Riverside counties, where the U-T has recently ventured with a two-page experimental news and events section.
Local resistance from San Diego labor unions and would-be advertisers to the putative buyout might ultimately deter Alden from bidding, but the U-T, whose workers long-ago bid farewell to their newspaper union, has so far attracted few outspoken champions.
And the U-T's fate appears inextricably linked to that of the Times, which prints the San Diego paper in L.A. at a plant whose lease by Soon-Shiong is due to expire in just two years.