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Lawsuit Brought Against NantHealth

As Forbes' Matthew Herper reports, two former employees are bringing a lawsuit against NantHealth, alleging that it is "engaged in a multitude of fraudulent activities."

NantHealth, a subsidiary of NantWorks, is a cloud-based information technology company founded by Patrick Soon-Shiong that focuses on medicine. NantHealth recently announced a collaboration with mobile phone maker BlackBerry to enable oncologists to browse patients' genetic information on their smartphones using the company's secure cancer genome browser.

But Stephanie Davidson and William Lynch allege in their whistleblower lawsuit that NantHealth and NantWorks have violated health privacy as well as Federal Trade Commission, Food and Drug Administration, and Centers for Medicare and Medicaid Services regulations. They additionally claim that the company ignored their concerns regarding the potential harms the company's products were exposing patients to, and that 14 of its customers were ready to "throw out" the company.

"The claims in the lawsuit raise doubts about a planned initial public offering of NantHealth," Herper adds.

Davidson and Lynch, who were in a relationship and lived together, say they were fired after Davidson expressed concerns to NantHealth's executive vice president, Laura Beggrow, about misrepresenting what the company's products can do.

Steve Curd, NantHealth's Chief Operating Officer, tells Herper that "[t]he facts are the allegations are false," and that he fired Davidson and Lynch for "improper behavior."

"This lawsuit was filed after Nant turned down a demand by Ms. Davidson and her boyfriend Mr. Lynch for $2 million with an accompanying threat that unless Nant paid, Ms. Davidson and Mr. Lynch would launch a smear campaign filled with false and damaging information," Curd says.

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