Bloomberg’s Brendan Coffey has an excellent story this morning about Robert Duggan, a businessman who has become a billionaire in part because he’s developing a very promising new cancer drug, and who also happens to be Scientology’s biggest single donor.
Written in the dry, detached Bloomberg style, Coffey’s story hints at a messier tale of boardroom intrigue as Duggan has taken over companies and wrung profit out of them, and now finds himself an unlikely hero for cancer victims. Marty Rathbun, meanwhile, says Duggan has donated $20 million to the church (twice Nancy Cartwright’s $10 million!). Kristi Wachter also gets some nice attention for her amazing Scientology completions database, which records Duggan’s long involvement in the church.
As Scientology leader David Miscavige chases away more longtime church members with his constant demands for cash, he’s going to rely more and more on whales like Duggan. But another billionaire, Australian businessman James Packer, ditched Scientology after he’d been courted with the use of the church’s celebrities. Better hold on to Duggan, COB.
Maybe by giving him another big-ass trophy?
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Posted by Tony Ortega on January 29, 2013 at 07:00 http://tonyortega.org/2013/01/29/mike-rinder-on-the-hole-and-how-he-escaped-scientology/
Scientology Donor Becomes a Billionaire With Cancer Drug
By Brendan Coffey - Jan 29, 2013 4:21 PM GMT
Edward Linsmier/Getty Images
A headquarters for the Church of Scientology in Clearwater, Florida.
Robert W. Duggan, the Church of Scientology’s biggest donor and the chief executive officer ofPharmacyclics Inc. (PCYC), which makes an experimental treatment for chronic lymphocytic leukemia, has become a billionaire after the company’s shares tripled in a year.
Robert W. Duggan, chief executive officer of Pharmacyclics Inc., seen here in Paris on Sept. 19, 2001. Photographer: Francois Mori/AP Photo
Pharmacyclics’ medicine, called ibrutinib, inhibits an enzyme that promotes cancer growth. It helped control the malignancy in 68 percent of 116 patients who hadn’t been previously treated for the blood cancer, the Sunnyvale, California-based company said in a December statement.
“It’s not just promising, it has those unique profiles of looking very efficacious but also really safe,” said John McCamant, editor of Medical Technology Stock Letter, in a phone interview. “That is very rare in cancer drugs.”
Duggan, 68, has made hundreds of millions of dollars investing in and selling companies such as a bakery chain, a European billboard operation and a robotic surgery innovator. He has a net worth of at least $1.2 billion, according to the Bloomberg Billionaires Index, and has never appeared on an international wealth ranking.
“It is our collective desire to usher in a new era of patient friendly, body harmonious, medicinal therapy to cancer patients in need. While much work remains, we are off to a very good start,” Duggan said in an e-mail on Tuesday.
Johnson & Johnson
Ibrutinib, which is delivered by pill and is in Phase III drug trials -- the last hurdle before market introduction -- is part of a new class of medicines for chronic lymphocytic leukemia, or CLL, a cancer that strikes about 16,000 Americans a year at a median age of about 72.
The goal is to use the drug without chemotherapy, a standard treatment that can be too toxic for some elderly patients. Ibrutinib may generate as much as $5 billion a year if approved for CLL and other blood cancers, said Michael Yee, an RBC Capital Markets analyst, in December.
In December 2011, New Brunswick, New Jersey-based Johnson & Johnson (JNJ) said it would pay Pharmacyclics, which Duggan took control of in a 2008 boardroom coup, as much as $975 million to fund getting the drug to market in exchange for half the profits generated globally.
There are 27 human trials of ibrutinib completed, under way or planned. McCamant said he believes the company will begin selling the drug in 2014. He said it also has a good chance of developing additional usages for the drug, such as treating autoimmune disorders.
Largest Shareholder
Pharmacyclics generated $103 million in revenue in the quarter that ended Sept. 30, 2012, up from $37,000 a year earlier. Of the 13 analysts who cover the company, 62 percent have a buy rating on the stock, with an average target price of $80.38 per share, according to data compiled by Bloomberg. The stock was down 2.3 percent to $69.89 yesterday in trading in New York.
Duggan owns almost 20 percent of Pharmacyclics shares, and controls another 500,000 shares he manages on behalf of undisclosed high net worth individuals, according to filings with the U.S. Securities and Exchange Commission.
The billionaire bought most of his shares from 2004 through 2011, at a cost of $42 million, including shares he received as repayment of $6 million he loaned the company, according to data compiled by Bloomberg. They are valued at about $975 million.
He also has at least $250 million in cash and other investable assets, based upon an analysis of past investments, stock sales and purchases, taxes and charitable giving, according to the Bloomberg ranking.
‘Scientology Inc.’
One big recipient of Duggan’s giving is the Church of Scientology. The billionaire is the church’s largest financial supporter, according to Mark “Marty” Rathbun, former inspector general of Scientology, the second-highest leadership post in the organization. Rathbun left the organization in 2004 because he said the church had strayed from its founder’s intent.
“Duggan is the undisputed champion of donations to Scientology Inc.,” Rathbun said in an e-mail. “He is in a category of his own, having donated more than $20 million. Nobody else even comes close to having donated that much.”
Those donations have funded a cruise ship for the religion’s retreats, backed missions in Italyand provided thousands of copies of “Dianetics,” a book by Scientology’s founder, L. Ron Hubbard, to libraries across the U.S.
“Scientology and what it has made available to me in the way of courses and other programs has steered me in the direction of becoming a better and more capable person. Thus I feel it is an honor and personal obligation to share my financial success with Scientology,” Duggan said.
A phone call to a Scientology spokesperson wasn’t immediately returned.
Cookie Muncher
Born in Berkeley, California, Duggan started investing in the mid-1960s when he was enrolled at the University of California in Santa Barbara and then at the University of California in Los Angeles. Duggan said he didn’t obtain a degree from either institution. By about 1968, Duggan had already made money from investments in computer companies, according to Dan Patterson, a former Olympic volleyball player who was married to the sister of Duggan’s wife, Patricia, in the 1970s.
Duggan was “very sharp and of course I knew him very well back in those days,” Patterson said in a phone interview from his home in Colorado. “He had quite a reputation in his early college years getting involved in investments, and had a real knack at being extremely inquisitive and extremely thorough and did his homework.”
$40,000 Courses
Patterson and Duggan created Cookie Muncher’s Paradise in Long Beach, California, in 1976. Originally a gourmet cookie shop, the pair built it into a 16-store sandwich chain called Paradise Bakery. They sold the chain to Chart House Restaurants in 1987 for about $6 million, said Patterson, who worked at Paradise until it was sold again to Panera Bread Co. (PNRA) in 2006. He is now retired.
“Bob is very energetic, very engaging and so there was a great start for me,” he said. “I have nothing but great things to say about him.”
Before he sold the bakery, Duggan began taking classes with the Church of Scientology, after seeing his wife’s experience with them, he said. At that time they cost a few hundred dollars, said Duggan. Equivalent introductory courses today would cost $40,000, according to Kristi Wachter, who has published data on the church at www.truthaboutscientology.com. Her information is derived from materials published by the Church of Scientology, she said.
Investment Research
“As far back as I can recall, certainly from the time I was a little boy wondering what I might become, I was interested in religion and the hope it held forth for happiness and a better life for all,” Duggan said.
By 1983, Duggan had completed other Scientology courses, including Happiness Rundown, Grade V and Grade VA Power Plus, according to Wachter’s data. The latter course claims to “restore previously hidden powers,” according to Scientology’s website.
By the mid-1980s, Duggan’s reputation for investing had spread throughout Scientology, according to Reed Slatkin in a January 2000 deposition to the SEC. Slatkin had administered Scientology counseling to Duggan and his wife, and began assisting Duggan with investment research around 1983.
Slatkin said in his deposition that Duggan’s approach to investing was inspired by Benjamin Graham. Duggan would visit companies such as floppy disk makers Tandon Corp. and Dysan Corp. to learn about their businesses from executives before buying stock.
Boardroom Coup
During his time assisting Duggan, Slatkin said he made a couple hundred thousand dollars on his original investment over a year and a half, according to the deposition.
By the time Slatkin sold his stakes, the initial $200,000 he made with Duggan had grown into $13 million.
Slatkin was convicted in 2003 of defrauding investors of about $590 million, funds that were mostly from other Scientologists. He is imprisoned in a federal facility in Lompoc, California, and didn’t respond to an interview request made through his attorney, Brian A. Sun of Jones & Day. Slatkin will be released in May and is no longer a Scientologist, said Sun. Duggan wasn’t involved in the fraud, and said he had just a brief association with Slatkin in the 1980s.
“I unsuccessfully attempted to instruct Mr. Slatkin in a fundamental, thorough, research oriented, approach to stock market investing. It did not catch on with him and thus he was of no help to what I was doing. That fast we parted ways, it was my call. You can lead a horse to water but you can not make him drink,” said Duggan in his e-mail.
Cancer Drugs
After parting ways with Slatkin, Duggan became chairman of Government Technology Services Inc., a large vendor to the federal government. He then led Computer Motion Inc., a robotic surgery company that he sold to Intuitive Surgical in 2003. In 2006, he sold MAG International, a billboard company he owned in eastern Europe.
Duggan made his first filing with the SEC as a beneficial owner of Pharmacyclics stock in September 2004, two days after it announced early positive results on Xcytrin, a different experimental cancer drug.
Three months later, when another study showed no benefit from Xcytrin, Duggan kept buying the company’s shares, according to SEC filings. A year later, he was the company’s largest shareholder. After more disappointing test results, Duggan forced out CEO Richard Miller and three other board members, and told company researchers to focus on three b-cell cancer drugs it had acquired in April 2006.
‘God’s Gift’
B-cell type cancer treatments had been long dismissed in the pharmaceutical world, according to McCamant. The prior owner of the drugs saw little promise in the treatments: Celera Genomics of Rockville, Maryland, sold them to Pharmacyclics for about $3 million and took a related $30 million loss.
Duggan said the drug was a “gift from God” on a December 2011 call with investors when trials on the drugs, including ibrutinib, worked.
According to researcher Wachter, Scientology publications suggest the Duggan and his wife, Trish, were early funders of the Freewinds, a Scientology Caribbean cruise ship where high- level training occurs. They have also supported Ideal Orgs -- Scientology missions -- in the U.S., Canada, Italy and elsewhere, and acted as fundraising missionaries to bring people and money into Scientology.
Patrons Excalibur
In 2008, the Duggan family was recognized by the church for donating more than $7.5 million to the cause, Wachter said. Duggan and his wife were presented two years later with the Patrons Excalibur award, a prize made just for them to recognize a record level of donations to the organization, according to a Scientology magazine.
“What a privilege to be a member of the team of Scientologists who play an active role in preserving the technology of Dianetics and Scientology,” Duggan and his wife said in a statement published by Legacy, a Scientology magazine, in 1992. “As this tech will ultimately have a profound impact on the billions of people on this planet alone, one can immediately see the vital need to preserve it in spite of anything else that can happen.”
To contact the reporter on this story: Brendan Coffey in Boston at bcoffey10@bloomberg.net
To contact the editor responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net
Some "Scilons" as you call them are so deeply in the Black Hole that they cannot see.
Take Bob Duggan. A brilliant entrepreneur who has made a fortune all on his own endeavours.
You would think he would be smart enough to not get fooled by Miscavige.
He was the mentor of Reed Slatkin. Not on the shady criminal aspect, but how to invest in growth and so on.
He did see the writing on the wall and extricated himself long before Slatkin's downfall.
Here's my son Alexander with Bob Duggan at the Santa Barbara beach.
But here's the incredulous information
Bob Duggan gave $15 million to the "IAS" International Association of Scientologists and multi-millions to other fund raising scams of the Church. For this he received this Trophy.
Karen de la Carriere
Karendelac@gmail.com
Take Bob Duggan. A brilliant entrepreneur who has made a fortune all on his own endeavours.
You would think he would be smart enough to not get fooled by Miscavige.
He was the mentor of Reed Slatkin. Not on the shady criminal aspect, but how to invest in growth and so on.
He did see the writing on the wall and extricated himself long before Slatkin's downfall.
Here's my son Alexander with Bob Duggan at the Santa Barbara beach.
But here's the incredulous information
Bob Duggan gave $15 million to the "IAS" International Association of Scientologists and multi-millions to other fund raising scams of the Church. For this he received this Trophy.
Karen de la Carriere
Karendelac@gmail.com
_________________
Karen de la Carriere
Karendelac@gmail.com
Follow me on Twitter @KarendlaCariere
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