Cullinan bags $150M to build broad slate of cancer assets

Cullinan Oncology CSO Patrick Baeuerle, Ph.D.

Cullinan Oncology has raised $150 million to build a portfolio of cancer R&D programs. The idea is to manage the risks inherent in drug development by placing bets on eight to 10 early-stage assets and selling those that show promise in the clinic. 

MPM Capital’s UBS Oncology Impact Fund and F2 Ventures put up the $150 million Cullinan needs to build and advance this portfolio of what CEO Owen Hughes calls “essentially one-off assets.” 

Unusually for a biotech startup, the idea that defines Cullinan is financial, not scientific. In essence, Cullinan is applying modern portfolio theory—a framework for maximizing returns for given risk levels—to drug development.

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The framework assesses the potential risks and returns of each asset in the context of how it affects the portfolio's overall risks and returns. This enables investors to add higher-risk, higher-reward assets and balance them out with those more likely to pay out but in smaller amounts. 

CEO Owen Hughes said the portfolio model, by definition, gives Cullinan a higher tolerance to risk than traditionally structured biotechs. Cullinan can take on high risk assets, balance the portfolio with safer bets and, if the science later dictates, kill the speculative program without toppling the whole business. 

“By diversifying the risk across the portfolio we can take some pretty big shots on goal. The objective is to win with a couple of them. Obviously the majority of them will actually go by the wayside. But since we have the portfolio approach behind us we can actually withstand some setbacks,” Cullinan CEO Owen Hughes said. 

Cullinan is starting out with three assets, with plans to move up to the eight to 10 range it sees as optimal for the portfolio. One of the assets came to Cullinan via MPM, a route Hughes thinks will be fruitful for the company.

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As a major investor in oncology, MPM sees hundreds of deals a year. But to diversify its risk, the VC shop typically filters out one-off assets in favor of those that fit the mold of platform technologies. This means MPM passes over many promising assets that don’t fit its business model. Cullinan is getting a look at all these assets and adding the choicest opportunities to its pipeline.  

That is how Cullinan came to own its one externally discovered asset, an oncogene implicated in a high proportion of cancers that has frustrated researchers for more than two decades. 

The other two assets emerged from Cullinan’s own R&D activities. Cullinan is operating without a wet lab. What it has is brainpower—both within its walls and at MPM—and close ties to service providers.  

Patrick Baeuerle, Ph.D., who led development of pioneering bispecific antibody Blincyto at Amgen, is one of Cullinan’s CSOs. The other is MPM’s Leigh Zawel, Ph.D., a former East Coast site head for Pfizer’s Centers for Therapeutic Innovation. Baeuerle and Zawel are supported by Briggs Morrison, M.D., who headed up late-phase development at AstraZeneca before jumping into the biotech and VC worlds. 

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Working with service providers, this team has overseen work on two immuno-oncology assets. Both are designed to dial up the immune response against tumors, making them complementary to the PD-1 drugs that take the leashes off the body’s attack dogs. 

The most advanced of the three assets is 15 to 18 months away from an IND. The other two are due to reach the IND stage in 20 to 24 months.

Cullinan plans to offload some of the assets once they generate phase 1b data, providing the signal is robust enough to support a well-remunerated exit. Baeuerle said Cullinan will take other assets to phase 2 but in general it wants to capitalize on the potential for cancer to support earlier exits. 

If all goes to plan, Cullinan will return some profits to shareholders and reinvest the rest, enabling it to become an evergreen innovation engine for companies better suited to later-phase work. That isn’t a wholly original idea. But with $150 million, an A-list team and potentially productive internal and external sources of assets, Cullinan is better placed than most to execute the concept.