Top scientists and BD execs craft Cullinan, a $150 million R&D portfolio shop focused on cancer
Close to six years ago, then Amgen R&D chief Roger Perlmutter told me he had been “carrying a torch for (CSO) Patrick Baeuerle at Micromet for a long time.” That admiration explains why Perlmutter was willing to pay more than a billion dollars to buy Micromet — where Baeuerle was R&D chief — which eventually delivered the pioneering Blincyto to the market.
After a stint at Amgen, biotech being the kind of project-focused industry it’s become, Baeuerle became a VC at MPM and a startup maestro. And today he’s having a coming out party for Cullinan Oncology, an intensely project-oriented biotech bankrolled with $150 million to set up a portfolio of cancer drugs to develop.
“It’s a hybrid; a fund and an operating company,” says Owen Hughes, the CEO of Cullinan and a managing director of MPM Capital, which set the company up. The $150 million round was co-led by UBS Oncology Impact Fund (OIF) managed by MPM and F2 Ventures.
Hughes knows a thing or two about raising money. He jumped to this new venture from the biotech unicorn Intarcia, where he was until recently head of corporate development during a stretch in which the company raised $1.8 billion. That gave him time to refine a “theory of modern portfolio theory relative to any scientific platform.”
Cullinan’s strategy is to gather together largely early-stage cancer drug assets — either from Baeuerle’s mind or other sources, such as academia or platform companies — and build up a set of 8 to 10 programs that will be held under the umbrella group. The team will be charged with the research work, developing these drugs through proof-of-concept or into Phase II, at which time they can start doing some deals and generating returns for the limited partners.
There are no wet labs at the Cambridge, MA-based biotech. Much of the development work is being outsourced. Costs contained. Returns maximized and risk distributed.
“We have no intentions to commercialize any of the assets,” says Hughes.
“We’ve looked at every biotech company in the last 15 years,” he adds. “There’s a huge chasm (under the Gilead level) between the haves and have nots.” Margins are typically low, he says, with companies investing back into R&D.
Hughes thinks he and the small, 10-member team at Cullinan can change those dynamics.
He and Baeuerle have some well known talent in their corner.
Briggs Morrison, the former CMO at AstraZeneca and current CEO at Syndax, is a clinical adviser. Leigh Zawel, yet another senior researcher to come out of Big Pharma after his most recent stint running Centers for Therapeutic Innovation for Pfizer, is on board. Corinne Savill jumped in from her job as head of BD and licensing for Novartis.
And Hughes plans to recruit one person to run each of the in-house programs.
Cullinan already has three programs, two from Baeuerle and one from academia, which he isn’t quite ready to discuss in any detail. Each of these drugs they take on could cost $25 million to $30 million to get ready for the next deal.