Updated: Arbitrator awards $157M to Soon-Shiong’s ImmunityBio in dispute with Sorrento

Sorrento Therapeutics’ yearslong battle with NantCell and NANTibody has come to an arbitration award, but additional legal proceedings centered around a “catch-and-kill” scheme remain pending.

On Friday, the arbitrator in the dispute between Sorrento and NantCell and Immunotherapy NANTibody LLC issued an award that grants contractual damages and pre-award interest.

The arbitrator awarded NantCell (part of billionaire Patrick Soon-Shiong’s ImmunityBio) nearly $157 million and NANTibody close to $17 million. Post-award, prejudgment interest will accrue at 9% per annum, according to an SEC filing sent in by Sorrento.

Sorrento doesn’t agree with the ruling.

Henry Ji

“The Company believes the Award was wrongly decided and is evaluating next steps, including, among other things, potential grounds to vacate, modify, or correct the Award under applicable law,” Sorrento wrote in the SEC filing, signed by Henry Ji, the biotech’s chairman, president and CEO.

Meanwhile, in an SEC filing later Monday morning, ImmunityBio said it will seek the award in a timely manner.

“This decision by the arbitrator is final and binding on the parties, and we intend to pursue confirmation of the award promptly. After obtaining a judgment, we intend to pursue vigorously the collection of the award and applicable interest from Sorrento, but we make no assurances that we will receive the full amount or with respect to the timing of our receipt of funds,” ImmunityBio wrote in part in its filing with the SEC.

Sorrento now has no more obligations under its exclusive license agreement with NANTibody, according to the biotech’s SEC document. Sorrento and a subsidiary from Soon-Shiong’s network of Nant companies set up Immunotherapy NANTibody as a joint venture in 2015. Per the Dec. 2 SEC filing, Sorrento holds 40% of the outstanding equity of NANTibody.

Regarding a tie-up with NantCell, which is now known as ImmunityBio under the wings of repeat biotech entrepreneur Soon-Shiong, Sorrento still has the ability to receive potential future royalties on net sales of an anti-PD-L1 antibody that it “previously delivered” to NantCell.

Endpoints News has reached out to Sorrento and will update accordingly.

Other arbitration remains pending. That includes Sorrento seeking “several hundred million dollars in damages for alleged breaches” of a stock sale and purchase agreement from 2015 between Sorrento and NantPharma regarding the drug Cynviloq. An arbitrator decision is anticipated later this year, Sorrento wrote in the SEC filing.

Sorrento is working on multiple immunotherapy programs and has a slate of Covid-19 projects in the works across diagnostics, antibodies, antivirals and an mRNA vaccine. In the early months of the pandemic, Ji told a Fox News reporter the biotech had an “exceptionally potent antibody” and that the crisis would be over.  The stock skyrocketed. But investors and ethicists were taken aback by the claims — the antibody had never been tested in patients, let alone mice.

Soon-Shiong, who for years has touted a moonshot quest for changing the cancer treatment landscape and was reportedly on the list of potential NIH chiefs under President Donald Trump’s watch, also caused a stir in the Covid-19 arena with his attempts to get the ear of White House leaders and get his company’s vaccine into trials.

Sorrento’s pain subsidiary went public last month via a blank check deal.

Meanwhile, ImmunityBio awaits an FDA decision on its first BLA accepted for review. By May 23, 2023, the agency will determine whether to greenlight ImmunityBio’s N-803 for patients with BCG-unresponsive non-muscle-invasive bladder cancer carcinoma in situ (CIS) with or without Ta or T1 disease.

Editor’s note: This story was updated to include information from an ImmunityBio SEC filing from Monday morning.

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