Startups, Venture

Bain’s Adam Koppel commits $350M to launching a new biotech that is carving out Pfizer’s neuro pipeline

Adam Koppel and his team at Bain Capital are carving out the neurosciences pipeline that Pfizer shuttered at the beginning of the year, setting aside $350 million to back a startup called Cerevel which will now take control of the work.

All of the money for this deal — to be announced later Tuesday morning — is coming from Bain Capital Private Equity and Koppel’s Bain Capital Life Sciences.

Doug Giordano

Pfizer startled the neurosciences world at the beginning of this year with its decision to abruptly bow out of the field — axing about 300 staffers in the process. Now Koppel is working on recruiting his own team, which will be charged with taking their 10 programs through a planned Phase III, a Phase II and a slate of preclinical and early-stage work.

“This is a very unique deal for Bain Capital,” Koppel tells me. But it’s also not likely the last time the private equity group will stand up new companies like this. He compares it to SpringWorks, a company funded by Bain, OrbiMed and others that took a slate of 4 drug programs off the shelves of Pfizer last fall and pointed them back into development.

The startup also pops up in the wake of a similar deal at Allogene, which raced to pick up Pfizer’s off-the-shelf CAR-T work and barrel straight into a record-setting IPO to back the play by Arie Belldegrun and David Chang. In Allogene’s case though, the partners were gifted with a team of 40 Pfizer researchers who were deeply engaged in the process.

In this case, Koppel says they are bringing over a few Pfizer staffers, but not many. “There are a couple of key people coming over, but it’s not a lot, as we are largely focused on building out a team,” he notes.

Aside from Pfizer’s BACE drug, which is being left aside in the wake of a definitive late-stage failure for the lead BACE at Merck, Cerevel is getting everything Pfizer had, with plans to be fully operational in Q1 2019.

Morris Birnbaum

Pfizer, which gets 25% of the equity in Cerevel in exchange for the pipeline, also plans to stay directly engaged at the company, with Doug Giordano, senior vice president of worldwide business development, and Morris Birnbaum, senior vice president, CSO of internal medicine, joining the board alongside Koppel and Chris Gordon, another managing director at Bain.

Koppel is still keeping many of his cards close to his vest. He’s not saying how many staffers he expects to recruit for the initial effort. An IPO may eventually be one way to go, but it’s not on his agenda for discussing with writers today. 

The company won’t lack for money; Bain is ready to put up more cash if necessary.

Says Koppel: “This company will be well funded.”

Their money will go to a late-stage D1 partial agonist, which Koppel expects to enter Phase III next year as they explore the drug’s potential for controlling symptoms of Parkinson’s. A Phase II-ready selective GABA 2/3 agonist will start off in an epilepsy program. The company also has active programs in early development, discovery and a research program in neuroinflammation. 

I suggested that neurosciences, which has seen a variety of Big Pharmas bow out in the wake of fearsome failure rates, was a tough field to jump into. But Koppel didn’t agree, citing cases where Sage, Neurocrine and others have been making a reputation for themselves.

The key here, he says, is whether a leaner, meaner biotech machine can more efficiently develop this pipeline of drugs, which is an idea that Pfizer is wide open to. And if it works, they can be one of the leading biotechs in the field as well.


Image: Adam Koppel. BAIN


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