Crinetics spins off radiopharmaceuticals into new company with $30M in a page from Roivant's playbook

Is there another Roivant-Vant strategy in the works in the biopharma world?

Call it the Netics nexus with inspiration from Novartis: Crinetics Pharmaceuticals has partnered with venture capital shops to launch Radionetics Oncology with $30 million in initial fuel.

While Crinetics is largely focused on oral treatments for rare endocrine diseases and related tumors, Radionetics' mandate is a much broader scope within oncology. 

Crinetics decided to "really get serious" on internal discovery work in radiotherapeutics in part because of interest in the space after Novartis' Lutathera was approved in January 2018, said Scott Struthers, Ph.D., founder and CEO of Crinetics, in an interview with Fierce Biotech.

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Radiopharmaceuticals is a class of drugs that contain radioactive isotopes. Those radioisotopes are carried by the treatments to receptors on tumors in the hopes that it will kill the cancer.

Novartis acquired Advanced Accelerator Applications for $3.9 billion to get Lutathera, a radioactive drug for certain rare cancers in the digestive tract, in October 2017. The drug racked up $445 million in sales last year.

Radionetics follows the path of Roivant, Agenus Bio and other biotechs that have spun out of smaller companies to focus on a particular scientific unit or disease area. Like Roivant and Agenus' spinoffs, Radionetics could one day become a public company of its own, Struthers said. 

Backed by original Crinetics backer 5AM Ventures as well as Frazier Healthcare Partners, Radionetics is based on a decade of discovery work at the parent company. In the coming months, Radionetics will have clarity on a timeline for entering human trials, said Struthers, who will also be chair of the new company.

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The decision to form Radionetics as a new company means Crinetics could benefit from $1 billion in milestone payments down the road.

Radionetics emerges with the exclusive worldwide license to Crinetics' radiotherapeutics tech and intellectual property in exchange for equity, those lucrative biobucks and single-digit royalties, should any of the therapies or radio-imaging agents get to market, Crinetics said Monday as the market closed. 

The new company starts with a treasure chest of 10 non-peptide-targeted radiopharmaceuticals. More potential cancer treatments will be identified independently and with the help of Crinetics through a research collaboration. 

Radionetics' platform consists of non-peptide small molecules that aim to bind to peptide receptors selectively expressed on various tumors. 

“These are peptide receptors that we think are overexpressed on different tumor types and each one has got some really interesting rationale behind it, but many of them might address more than one solid tumor type," Struthers said. "In fact, there are a couple of them that seem to be expressed on most solid tumors, which is super exciting."

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Leading the charge at Radionetics is the co-founding team behind Crinetics. Yun-Fei Zhu, Ph.D., is chief research officer, and Ana Kusnetzow, Ph.D., is vice president of biology. Rounding out the management group are Chief Development Officer Deborah Slee, Ph.D., and senior vice president and head of corporate development Brett Ewald, Ph.D. Slee was previously a Gossamer Bio SVP and Ewald was a DNAtrix SVP. 

There is no CEO yet, but Struthers said it's a top priority with discussions already underway with potential leaders.

Crinetics is making the spinout move before getting any of its own products to market. The company's lead candidate is being tested in a phase 3 trial in patients with acromegaly, a rare condition in which body tissues and bones grow too quickly.