Proton therapy center bounces back after bankruptcy and split with Scripps Health

(Story was updated on Dec. 9)

San Diego's only cancer-targeting proton treatment center has leveraged an infusion of capital and new leadership to relaunch as California Protons following Chapter 11 bankruptcy.

An investor group has converted a significant portion of their debt into ownership interest and provided some working capital, which California Protons plans to use to recruit and retain quality physicians and treat additional patients. The relaunch also marks a fresh start since Scripps Health handed off day-to-day operations in December.

"What I see going forward is a tremendous opportunity," said Jim Loughlin, managing partner at Loughlin Management Partners, which is working with the physicians and ownership on the transition plan. "We have the only state-of-the-art proton facility in the state of California, and with 90,000 new cancer patients in Southern California a year and growing awareness of proton therapy, we see a tremendous growth opportunity." There is also greater demand from the international community, Loughlin added.

Scripps Health managed business operations and provided clinical care at the proton center from its opening in 2014 until Dec. 6. The health system has four hospitals in San Diego and is amid its own restructuring.

The new owners, California Proton Therapy Center, now contract with a new clinical partner, Proton Doctors Professional Corp., led by Dr. Andrew Chang.

The now-defunct Advanced Particle Therapy company launched the $220 million center about three years ago. It was one of many that sprouted in recent years and have since struggled to gain traction as the promise to better target cancer treatment with less damage to surrounding tissue comes with a hefty price. Advanced Particle Therapy partnered with proton-therapy equipment developer Varian Medical Systems, which provided a $115 million loan to help outfit the Scripps center.

The center initially planned to treat 2,000 patients a year, with higher volumes of prostate cancer patients, but only treated about 1,400 since 2014, according to Scripps. Insurers and policy experts say evidence lacks to prove that proton treatment produces better outcomes for early-stage prostate cancer patients.

Bob Szekely, a cybersecurity specialist in Colorado, disagrees. Proton therapy helped save his son's life, he said.

His son received proton treatment at Loma Lina University for a very rare kind of tumor known as an adolescent nasopharyngeal angiofibroma, which caused a tumor to grow on his brain stem. When surgery became risky, proton therapy was the only option. His son turned 37 years old in November, Szekely said.

"Proton therapy is less costly, and more effective, despite the fact that there is a dearth of aftercare studies," he said.

The proton therapy center amassed $185 million in debt and has relied on loans to stay open as it failed to "operate on a profitable or even a break-even basis," according to bankruptcy filings.

"As scheduled and planned, we completed the transition with the new owner on Dec. 6," Scripps said in a statement. "We are very proud that Scripps Health helped to bring this clinical technology to San Diego and the many patients we have cared for and the lives we have helped to save."

Correction: An earlier version of this story incorrectly stated when Scripps ended its management of the proton center and its current relationship with the facility. Apologies for the error.