It’s no secret that discovering and developing cancer drugs is an expensive and risky endeavor. But Cullinan Oncology is betting that a financial approach, rather than a purely scientific one, can improve the odds, and it has raised $150 million to test its approach.
The Series A investment for Cambridge, MA-based Cullinan was co-led by the UBS Oncology Impact Fund and F2 Ventures. The UBS Oncology Fund is managed by Cambridge venture capital firm MPM Capital.
Investors want to put their money into healthcare, and into cancer drugs in particular, says Cullinan CEO Owen Hughes, who is also a managing director at MPM. But many cancer drug companies are focused on a single compound. This “binary situation,” where a company’s fortunes are linked to the success or failure of one drug, makes for a very risky investment, Hughes says.
Just as a real estate investor might bet on a range of properties, Cullinan aims to spread investor risk across several drug candidates. The company will develop its portfolio from external sources, Hughes says. Internally, Cullinan will work on concepts and modeling of next-generation cancer treatments.
The goal is to end a drug program quickly if the early research suggests it won’t work. Hughes contends that under Cullinan’s model, killing off one or two compounds won’t diminish the value of the company.
“If we don’t get the results we like, we will shut it down and move on to other projects in the portfolio,” Hughes says.
The Cullinan portfolio will have anywhere from eight to 12 drugs at any given time. Each drug will have a dedicated chief executive. But Cullinan won’t build large teams around each drug. Instead, the programs—whether they come from within Cullinan or are licensed from outside the company—will share resources within Cullinan and also outsource work to contract research organizations, both of which are cash-conserving measures. Hughes says that while Cullinan has the intellectual and scientific capacity to create new molecules, the company is choosing a different approach that the company hopes gets to a decision point more quickly, and at less cost, compared to traditional drug companies.
The idea of collecting drug assets and having them share resources is catching on in biotech investing. Last month, Palo Alto, CA-based BridgeBio Pharma raised $135 million for its “hub and spoke” model that splits each drug into a subsidiary that shares in the central resources of the parent. Boston-based biotech accelerator Xontogeny also aims to offer its portfolio companies the opportunity to share resources in certain areas, such as regulatory affairs.
Cullinan’s scientific work is led by co-founder and chief scientific officer Patrick Baeuerle, who is also a managing director at MPM. Baeuerle has co-founded oncology startups in the firm’s portfolio including TCR2 Therapeutics in Cambridge, South San Francisco, CA-based Harpoon Therapeutics, and Maverick Therapeutics, a Brisbane, CA, company. Cullinan has three compounds in its pipeline so far; Baeuerle would only describe them only in general terms. The company’s lead drug goes after a “well-known cancer target” that is, or was, considered undruggable, he says. This compound, which Baeuerle says was initially developed at a U.S. university, has potential applications in many cancers and is expected to start clinical trials in 15 to 18 months.
The other two Cullinan programs are internally developed immune-oncology treatments: one is a way of stimulating the immune system to fight cancer and the other is a type of cancer vaccine that Baeuerle says goes after a target that has not been addressed before.
The external candidates that Cullinan brings into its pipeline could come from universities or drug companies, though Baeuerle adds that compounds from companies tend to be further along in development. Cullinan is mainly looking for compounds that have yet to reach clinical trials or are in Phase 1 testing. At the rate that Cullinan is finding external innovations in cancer research, Baeuerle says the company’s pipeline might end up weighted toward external drug candidates.
“We’re agnostic where it comes from as long as it’s great science, as long as it has great promise to become a drug,” Baeuerle says.
Hughes says that how much the company spends on each drug candidate will vary from drug to drug. The goal is to advance a drug far enough along to show how it could work, then license it, sell it, or perhaps spin it off into a separate company that goes public. The full $150 million of the Series A round is available now to Cullinan, though Hughes says the company won’t spend it all at once. But he adds that as Cullinan make progress, the company could raise even more money in the future.
Photo by Cullinan Oncology.