Sunday, September 23, 2018
Business

Trigaux: How Moffitt Cancer's M2Gen startup won $75 million from Hearst

TAMPA — A Moffitt Cancer Center spin-off that's building a massive genetic data base of individual patient cancer information just caught the attention of a deep-pocketed health care investor.

Today, Hearst — a name once known for newspapers but who is now a powerful player in health care and technology — will announce a $75 million investment in the Moffitt spin-off known as M2Gen.

That hefty stake signals Hearst's belief that M2Gen's approach to fighting cancer using both "big data" technology and individualized patient care ranks among the best strategies and smartest investments in the grinding and complex medical war against a formidable foe.

M2Gen, founded by Dr. Bill Dalton more than a decade ago, is still in the formative stages. It's not profitable yet — though it was not designed to be at this stage of its life. Hearst's announced investment injects outside credibility that Dalton's vision of what has become known as the "Total Cancer Care" protocol may be approaching critical mass. Now it can accelerate its mission to expand thanks to new funding.

The ultimate goal? Tapping the genetic data base to find the best available treatments most likely to help specific cancer patients.

The potential to save lives, time and money — health care's fight against cancer comes with sky-high price tags — is why the promise of M2Gen caught Hearst's eye.

"M2Gen's unique ability to pair a person's clinical and genetic data for analysis puts it at the leading edge of genetics-based oncology research," said Hearst Business Media president Richard P. Malloch, who will join the M2Gen board along with two other Hearst executives. "We are eager to extend Hearst Health's reach and make an important contribution to this new area of science."

M2Gen's Tim Wright, who joined the company in August as CEO, said in an interview that the $75 million will allow M2Gen to "scale up" by increasing the number of cancer patients represented in its data base, by expanding its current network beyond Moffitt and M2Gen's current 16 other top U.S. cancer centers, and by reaching out to more drug and biotech firms to share research findings and track promising clinical trials.

Wright said the added funding also will allow M2Gen to bring on more specialists in cancer research and "informatics" — the high tech skills of designing ways to store large amounts of cancer data while making them easily retrievable.

M2Gen, located on McKinley Drive just south of Tampa's USF campus, operates in its own building with about 40 employees. Wright expects that number to double shortly. He calls Hearst's $75 million commitment "very substantial" and should provide the capital base M2Gen needs to keep on its business course for the next three to four years.

RELATED COVERAGE: M2Gen: The future cancer fight starts here.

The additional stake brings the number of equity investors in M2Gen to three. Non-profit Moffitt has helped fund M2Gen for years and will continue to hold a majority investment in the firm. Hearst is second, followed by The Ohio State University, which was an early partner with M2Gen and is now one of the 17 cancer centers nationwide that make up the "Oncology Research Information Exchange Network" known as ORIEN. That network is expected to grow.

Moffitt Cancer Center director and executive vice president Dr. Tom Sellers recalls working at the Mayo Clinic in 2003 when he got an early glimpse of Dr. Dalton's vision for what would become the Total Cancer Care protocol. Sellers says it was bold and innovative. "Few places could achieve something so ambitious," he said in an interview. Sellers left Mayo to join Moffitt, and M2Gen was soon established, he said, "to help realize the Total Cancer Care potential." Drug giant Merck partnered for the initial five years with the newborn M2Gen to provide resources.

"That a company like Hearst is investing in M2Gen to the level they are signals we are making progress," Sellers said. "I foresee a very bright for this start-up."

RELATED COVERAGE: Moffitt subsidiary M2Gen faces new challenges in fighting cancer.

A cornerstone of M2Gen, Total Cancer Care is described as a partnership with cancer patients. They agree to donate their clinical data and tumor tissue so that M2Gen can learn from their medical experiences while also building a genetic data base of cancer specimens. In turn, these patients agree to be contacted for future studies, including potential eligibility in relevant clinical trials.

That life-long contact with patients appealed to privately-owned Hearst, said Hearst Business Media executive Malloch. A former Morgan Stanley banker, Malloch spends much of his time finding innovative investments for the Hearst family fortune, one originally built on newspapers. Now the investing is heavy in health care, finance and transportation and logistics. Hearst Business Media has become one of the company's fastest growing segments with 25 percent annual growth over the past decade.

Malloch said Hearst already had some ties with Dalton and Moffitt CEO Alan List. But Hearst liked the idea of the Total Cancer Care's life-long bond with cancer patients.

"We came to the point of view that this was the opportunity we wanted to invest in," he said. Hearst already has extensive health care and tech holdings that could complement and perhaps enhance M2Gen, he said. He characterized the $75 million as an investment that's not looking for a quick return.

"We are an organization that takes a very long-term approach," Malloch said. "We expect to be business partners for years and years." The Hearst company is also a very big organization, he added. Yes, the $75 million is a substantial investment in M2Gen. But if there comes a time when funding is needed, Hearst "stands ready" with additional capital.

List, Moffitt's CEO, was traveling in Asia and could not be reached. In a statement, he said adding Hearst to M2Gen's strengths "will magnify the work we are doing and help define the future of innovation in cancer care worldwide." Patients, List said, "will benefit profoundly."

For now, that may the best you can ask for. Cancer remains an elusive, nasty enemy.

Contact Robert Trigaux at [email protected] Follow @venturetampabay.

     
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