Miramar-based Altor BioScience Corp., which is developing treatments to combat cancer and infectious diseases, has merged with a California biotech in a deal valued at more than $1 billion, Altor’s founder has confirmed.
The transaction, which is for $360 million in cash and stock upfront, is the largest for a biotech company in Florida on record, according to the PricewaterhouseCoopers and CB Insights’ MoneyTree Report, which tracks investments.
Altor is now primarily owned by NantCell, founded by cancer entrepreneur Dr. Patrick Soon-Shiong of Los Angeles. The companies came to a definitive agreement to merge in late June.
The sale was confirmed by Jen Hobson, public relations director for NantWorks, the parent company of NantCell. “The sale of Altor BioScience to NantCell did close … More than 90 percent of the shareholders approved the deal,” she said in an email.
Hing C. Wong, Altor’s founder and CEO, said the California-Florida biotech business combination could become a “powerhouse” for attacking cancer. Wong said he intends to keep Altor headquartered and operating in South Florida, though he does some manufacturing in California.
Altor is a 15-year-old company that has developed two proprietary cancer treatment platforms and has 15 ongoing clinical trials of potential products. NantCell, part of NantWorks in Culver City, Calif., is developing cancer treatments that boost the body’s natural defenses to fight cancer.
Wong said the significant investment will help Altor seek Food and Drug Administration approvals to “help a lot of cancer patients and those infected with HIV.”
Nancy Bryan, president and CEO of state industry association BioFlorida, said Altor’s technology has the “promise to advance the treatment of cancer and make a significant difference in patients lives.”
Altor BioScience was acquired for $360 million in cash and stock and $720 million contingent on meeting milestones in FDA approvals and product sales, said Rick Greene, Altor’s chief financial officer. The company, which employs nearly 60 in Miramar, began its first day under its new ownership on Tuesday, Greene said.
Jane Teague, chief operating officer of the Florida Institute for Commercialization of Public Research in Boca Raton, said the deal is a “real testament to the early team that invested [in Altor]. Now they’re reaping the rewards.”
She said Altor’s success in attracting investment and the recent venture capital investment of $231 million in Boca Raton-based Modernizing Medicine show that “it can be done here, with good teams and good technology.”
In biotech, the three largest investments in Florida companies in the past decade were: $37 million in F1 Oncology in West Palm Beach, $45 million in Sirion Holdings, Inc. in 2007, and nearly $33 million in Innfocus in Miami in 2015, according to the MoneyTree Report.
Magic Leap’s venture capital raise of $794 million in 2016 remains the largest investment on record for any company in Florida. That Plantation-based technology company has raised a total of $1.4 billion.
Altor was founded in 2002 as a spinoff from Sunol Molecular Corp. The company had earlier investments from venture capital funds including Sanderling Ventures and TVM Capital.
Ultimately, Wong and Greene say they expect NantCell to eventually take the South Florida company public.
Meanwhile, there was a lawsuit in Delaware earlier this month where an investor contended his offer for Altor BioScience “low-balled” the company’s value. Altor BioScience shareholders lost a bid to block the sale, with the Delaware Chancery Court finding there was no proof of irreparable harm to their interests.
Soon-Shiong is a South African-born surgeon who has a net worth of $8.5 billion, according to Forbes, and is one of the wealthiest residents in Los Angeles. Soon-Shiong built his initial fortune from his invention of Abraxane, a drug approved for breast, lung and pancreatic cancer.
He has been a controversial entrepreneur who has made “huge sums for himself and shareholders who stuck with him when the companies were sold,” according to a recent article in the Los Angeles Times. But two cancer-fighting startup firms that Soon-Shiong took public in the last two years have had major losses, with stocks tumbling more than 70 percent from their highs, according to the Times.
Soon-Shiong also is major shareholder in Chicago-based Tronc, which owns the Sun Sentinel, Los Angeles Times and other media companies.
Hing said after working with Soon-Shiong for more than a year, he thinks the doctor has “a commitment to make a difference” in cancer treatments.
Soon-Shiong bought out some other investors in Altor and became chairman of the company in April 2016.
In July, Altor announced it had received “fast track” designation from the FDA for a potential treatment for patients with non-muscle invasive bladder cancer. The FDA’s fast track program is designed to expedite the development and review of drugs to treat serious conditions and fill unmet medical needs.