A vice president of Memorial Sloan Kettering Cancer Center has to turn over to the hospital nearly $1.4 million of a windfall stake in 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 hospital ventures with for-profit companies. As compensation for representing the hospital on the biotech company’s board, Raskin received stock options whose value soared when the startup went public a little over a week ago.
The move to hand over his stake is one of several steps now underway as the cancer center tries to contain a crisis that has 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 other cancer centers and research institutions, employees are barred from accepting personal compensation when they represent their institutions on corporate boards. But Memorial Sloan Kettering had no such prohibition until now.
Raskin has been involved with the startup, Y-mAbs Therapeutics, since 2015 when he signed off on the deal with 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 that will vest in the future are worth about $616,000 more.
After The New York Times and ProPublica asked about Raskin’s compensation, Memorial Sloan Kettering said it would change its policy so that he and other employees in similar roles would not profit personally from such arrangements, and that all proceeds would revert to the hospital.
The hospital itself has an equity stake in the company of 8.45 percent, which is worth $73 million.
In an e-mail, Raskin said that all his compensation for work with Y-mAbs “is being committed to Memorial Sloan Kettering and the amazing work we do.”
Christine Hickey, a spokeswoman for Memorial Sloan Kettering, said Raskin brought the matter to hospital leadership Sept. 21, the same day that Y-mAbs began trading publicly. She said he had fully disclosed his ties to the company, as required by the hospital.
This article was reported and written in a collaboration with ProPublica, the nonprofit journalism organization. Charles Ornstein is a senior editor at ProPublica.