A Look Into Billionaire Dr. Phillip Frost's Risky Biotech Portfolio

Published: Jan 04, 2017

A Look Into Billionaire Dr. Phillip Frost's Risky Biotech Portfolio January 4, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Phillip Frost, 80, has been dubbed the Warren Buffett of Biotech. His roles as chairman and chief executive officer of Opko Health don’t exactly give that away. But over his long career in healthcare and investing, and on his journey to a personal fortune of around $5 billion, he has been involved in major companies such as Key Pharmaceuticals, Ivax and Teva Pharmaceuticals . Forbes recently published a lengthy story about Frost, as well as a look at his biotech portfolio.

“Phil has an incredible vision of where to position himself within health care,” Larry Feinberg, a hedge fund manager for Oracle Partners, told Forbes. “He views Opko as his holding company. It is his Berkshire Hathaway of health care.”

Born in 1936, Frost majored in French literature at the University of Pennsylvania, but heard of a new medical college in New York City offering scholarships while he was studying in Paris at the Sorbonne. That medical school was called Albert Einstein, and he applied and won a full scholarship. He eventually specialized in dermatology. He spent two years as a lieutenant commander in the U.S. Public Health Service at the U.S. National Institutes of Health (NIH), then landed at the University of Miami’s dermatology department in 1966.

Early on, Frost invested a disposable tool for taking skin biopsies, which is still used today. He created a business partnership with attorney Michael Jaharis. Later, he merged his company that was built around an ultrasound-based tool to clean teeth with Key Pharmaceuticals. Frost was involved in reformulating Key’s primary asthma drug with what was the first controlled-release technology. Key’s Theo-Dur became the top-selling drug in the U.S., which the company followed up with Nitro-Dur, the first nitroglycerin slow-release patch. In 1986, Schering-Plough acquired Key Pharma for $836 million.

Frost formed another company, Ivax, which he turned from a domestic drug company into a global generics drug company. In 2005, Israel’s Teva acquired Ivax for $7.6 billion. That was Frost’s first billion.

Opko Health calls itself a “diversified healthcare company that seeks to establish industry-leading positions in large, rapidly growing markets.” In some ways, it’s a rather unusual mix in the biopharma world, with a therapeutics component, a diagnostics component led by its ownership of the third-largest clinical diagnostic company in the U.S., Bio-Reference Laboratories, a number of product companies such as EirGen Pharma and OPKO FineTech, and its strategic investments arm.

The strategic investments are fairly broad. Frost owns 34 percent of Opko Health, but also 1.5 percent of the stock in Teva. Frost is also Vector Group (VGR)’s largest shareholder, owning 15 percent of the company, which owns tobacco company Liggett Group and commercial realtor Douglas Elliman Realty.

Other biotech investments include:

1. BioCardia (privately owned by Opko)

2. Arno Therapeutics

3. Zebra Biologics (owned by Opko)

4. OAO Parmsynthez (a Russian drug company, also owned by Opko)

5. RXi Pharmaceuticals

6. Cocrystal Pharma (COCP)

7. Sevion Therapeutics

8. Neovasc

9. Chromadex

10. VBI Vaccines

11. MabVax Therapeutics

12. Musclepharm (MSLP)

In addition to his investments, inventions and companies, Frost is a philanthropist. He created his own version of the Rhodes Scholarship, called Frost Scholars, which sends 10 public-university students from Florida and four from Israel to Oxford every year to earn a master’s degree in a STEM field and to conduct research. He and his wife, Patricia, have donated $100 million to the University of Miami, and endowed the University of Miami’s School of Music and Florida International’s Art Museum. And recently they donated $45 million toward the construction of Miami’s 250,000-square-foot Patricia & Phillip Frost Museum of Science. That facility is scheduled to open in March 2017.

“We want to make Miami more of a technological and science center,” Frost told Forbes. “When we came here, people thought of Miami as anything but that. We feel that it begins with education. We need to start at the top with the universities and even the graduate students. The fastest way to achieve this is to attract a cadre of top-notch scientists, starting with chemistry and molecular biology.”

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