Saturday, 29 September 2018

Sloan Kettering Executive Turns Over

Windfall Stake

Sloan Kettering Executive Turns Over Windfall Stake in Biotech Start-Up

This article was reported and written during a collaboration with ProPublica, the nonprofit journalism organization.

A vice-chairman of Memorial Sloan Kettering Cancer Center has got to turn over to the hospital nearly $1.4 million of a windfall stake during a biotech company, in light of a series of for-profit deals and industry conflicts at the cancer center that has forced it to reexamine its corporate relationships.

The vice president, Dr. Gregory Raskin, oversees the hospital ventures with for-profit companies. As compensation for representing the hospital on the biotech company’s board, Dr. Raskin received stock options whose value soared when the start-up went public a little over a week ago.

The move handy over his stake is one among several steps now underway because of the cancer
the center tries to contain a crisis that has already led to the resignation of its chief medical officer and a review of its conflict-of-interest policies. Several board members and some executives of the nonprofit institution have maintained close ties to the health and drug industries at a time when stunning cancer breakthroughs are generating excitement among investors and spawning a flurry of biotech start-ups.

At other cancer centers and research institutions, employees are barred from accepting personal compensation once they represent their institution on corporate boards. But Memorial Sloan Kettering had no such prohibition so far.

Dr. Raskin has been involved in the start-up, Y-mAbs Therapeutics, since 2015 when he signed off on the effect Memorial Sloan Kettering, where the company’s experimental treatments for children with cancer have been developed. His vested stock options are worth about $675,000, at least on paper. Stock options which will vest within the future are worth about $616,000 more. In addition, shares he had personally purchased earlier at a discounted price are now worth about $106,000 quite he purchased them.

After The NY Times and ProPublica asked about Dr. Raskin’s compensation, Memorial Sloan Kettering said it might change its policy in the order that he and other employees in similar roles wouldn't profit personally from such arrangements, which all proceeds would revert to the hospital and its research.

The hospital itself has an equity stake within the company of 8.45 percent, which is worth $73 million.

On Friday, the Manhattan-based cancer center issued a memo to thousands of employees, announcing that it might restrict some interactions with for-profit companies. It said it had been imposing a moratorium on board members investing in or holding board positions in start-ups that originated with Memorial Sloan Kettering.

For now, the moratorium on board investments only applies to new deals, the hospital said. it might not affect the exclusive deal the hospital made with a man-made intelligence the company, Paige.AI, to license digital images of 25 million tissue slides. Three insiders, including a member of Memorial Sloan Kettering’s executive the board, were company cofounders, and three other board members were investors. Staff turmoil over the deal caused Dr. David Klimstra, the chairman of the pathology the department, to announce that he would divest his equity stake in Paige.AI.

Memorial Sloan Kettering said within the memo, “We have determined that when profits emerge through the monetization of our research, financial payments to M.S.K.- designated board members should be used for the advantage of the institution.”The proposed policies stopped in need of barring the hospital executives from receiving compensation for his or her work on outside boards, although officials have said that's a move they are considering.

Dr. Craig B. Thompson, the cancer center’s chief executive, sits on the board of the drugmaker Merck. Dr. José Baselga, the chief medical officer who resigned under attack this month after a piece of writing within the Times and ProPublica about his undisclosed industry ties sat on the board of the drug maker Bristol-Myers Squibb and Varian Medical Systems, a manufacturer of radiation equipment. He resigned both positions after he stepped down from his role at the hospital.

In an email, Dr. Raskin said that each one of his compensation for work with Y-mAbs “is being
committed to Memorial Sloan Kettering and therefore the amazing work we do.” He said he
“couldn’t be prouder of the work we’ve accomplished at Y-mAbs in extending children’s lives.

I'm grateful that I even have the chance to lend my expertise in the biotech business development and licensing property to bring M.S.K.’s unique and important discoveries to cancer patients.” Christine Hickey, a spokeswoman for Memorial Sloan Kettering said Dr. Raskin brought the matter to hospital leadership on Sept. 21, the same day that Y-mAbs began trading publicly and each day after the article about Paige.AI was published online. She said he had fully disclosed his ties to the corporate, as needed by the hospital.

Before joining Memorial Sloan Kettering in 2012, Dr. Raskin was vice president of the venture capital arm of AllianceBernstein, focusing on biotechnology. He now leads the cancer center’s Office of Technology Development.

Hospitals and universities have long assisted researchers with tasks like registering patents, but Dr. Raskin’s field — referred to as technology transfer — has expanded in recent years. Technology transfer offices became increasingly involved in helping to line up 2 pages, 0.03 MB companies, said Stephen Susalka, the chief executive of the Association of University Technology Managers. More than 1,000 start-ups originated at universities, hospitals or research institutions in 2017, consistent with his group, up from about 550 in 2007.

Research institutions have varying policies when it involves allowing employees to represent them on the boards of companies. Some, like the Cleveland Clinic and the University of Texas MD Anderson Cancer Center, permit employees to represent the hospital on company boards, while others, just like The University of Utah, do not.

The Cleveland Clinic said it prohibits employees from personally profiting once they are representing the interests of the institution. A spokeswoman for MD Anderson said that its head of technology transfer serves on one corporate board as a hospital representative, but that position is uncompensated.

No comments:

Post a comment