UPMC’s pledge to spend $1 billion on life science innovations over four years is expected to support early stage development of medical devices, software, drugs and more nationwide. On Wednesday, executive vice president Jeanne Cunicelli said that investment will also be the catalyst for a new venture at UPMC: a for-profit pharmaceutical company.
"I believe there's room in the world for a fast-growth, highly flexible pharmaceutical biotechnology company, and there is no reason it can't be in Pittsburgh," she said. "The vision for that would be a sustainable, long-term, big-presence-in-Pittsburgh type of company, with lots of employees and people we recruit."
Cunicelli, who joined the company in 2017, said in the beginning, that could mean acquiring a company with established products and revenues, but any new acquisitions would be immediately coupled with a research and development engine. She said a team of "pretty well-known industry experts" is in place and doing its homework now.
Although the venture is still unnamed, Cunicelli said: "I'll call it 'UPMC Pharma.' If it's revenue generating, I would expect us to look for an asset like that at least in the next year-and-a-half to two years, get that up and running and then marry it with the earlier stage assets so that its revenue assets mature [and] you have the ideas that can keep bringing new products to market.”
Cucinelli said it could cost tens of millions of additional dollars or more to build the new pharmaceutical company.
Tune in Monday at 9 a.m. for the full conversation with Cunicelli on 90.5 WESA's The Confluence.
UPMC Enterprises has long been the commercialization arm of a three-pronged machine, with UPMC's hospitals and care providers and its health plan composing the two historically more public-facing ventures. Enterprises' first $800 million in investments have returned more than $1.5 billion, according to the company.
"In a very short time, UPMC Enterprises has backed a promising pipeline of companies and research that could radically change the way we treat some of the world's most devastating diseases," UPMC chief medical and scientific officer Dr. Steven Shapiro said in a statement. "Our scientists at Pitt — along with others globally who will enrich their efforts — are seeing the results of their research moved out of the lab and into the commercial realm at a speed and cost that previously wasn't possible in the academic environment. That's good news for our patients and millions of others worldwide who will one day benefit from these treatments."
The $1 billion in venture funding includes a $200 million commitment to an existing immunotherapy-focused partnership with the University of Pittsburgh through the Immune Transplant and Therapy Center, which Cunicelli also oversees. Pitt ranks among the nation's top 5 recipients of research funding from the National Institutes of Health.
Cunicelli said UPMC’s approach to pharmaceutical development and sales won’t get in the way of products already available to its health plan customers. Drugs can take many years to make it to market, so this is just the beginning of a long-term investment.
Efficiency in manufacturing will be key, she said, to keep costs down for the consumer.
“Easy to say, hard to do,” she said, “but that’s one way to be more responsible.”
Cunicelli, a Carnegie Mellon University graduate, said the idea was born from a conversation with UPMC president and CEO Jeffrey Romoff. She said that while he was recruiting Cunicelli back to Pittsburgh from a life sciences investment firm in San Francisco, Romoff shared his hope that UPMC would begin investing in new drugs. Listening to him talk, Cunicelli said she turned it around. What if they found their own?
"His eyes got really big," she said.
UPMC officials say they expect revenues of about $22 billion in 2020, which would be up nearly $2 billion since the announcement of the additional $1 billion investment was made Jan. 14.