James Mutamba, CBO of Arrakis Therapeutics, on Biotech BD and IPO financing

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In this episode, we spoke with Dr. James Mutamba, Chief Business Officer at Arrakis Therapeutics.

Arrakis Therapeutics is an preclinical private biotech developing RNA-targeted small molecules. They combine insights into RNA structure, chemistry, and biology to pioneer a new class of medicines focused on oncology and genetically validated diseases.

James, as CBO, leads corporate strategy, business development, investor relations, and finance. Prior to Arrakis, James was the VP of Business and Corporate Development at Pyxis Oncology, leading their strategy and transactions, Series B, and IPO. Prior to that, James was a Principal in the Longwood Fund and Senior Associate at PureTech Health, where he led both investments and company creation. He received his BS in Biochemistry from University of North Carolina , and his PhD from MIT in Biological Engineering.

In our conversation, James and I discussed:

• His early experiences in investing and company creation
• Learnings from managing a biotech IPO financing
• His journey to Arrakis Therapeutics
• Approach and takeaways from running the process of business development deal-making

1:38 to 9:00: James’ journey through venture investing and company creation

• On finding a passion for biology and engineering: Though initially on a premed track, James was exposed to technology translation during college and ‘caught the bug’ of being at the intersection of science and business for the rest of his career.
• On his learnings in biotech company creation: Beyond evaluating early-stage academic technologies, James picked up the ability to predict where the market is going in terms of trends and innovations. Importantly, timing becomes critical: being early enough to spot a differentiated innovation before others, yet not being too early to then struggle recruiting other investors and talent.

“Being [too] early is almost equivalent to being wrong, especially when it comes to being financed. You have to figure out what you want to do with the technology, but also be aware of the external environment, as that relates to financing and being able to recruit people.”

• An example of company creation and timing: An understudied yet biologically important space, the lymphatics system has many functions, including trafficking dietary fat. James and his team posited that this system could then be hijacked as a drug-delivery system. Hypothesis in hand, James identified the experimental data needed to support it, identified an Australian scientist who had built a body of work in the area, and recruited others to form a biotech— the products of which are now in Phase II clinical trials!
• On the difference between venture-backed company creation and ‘full-time’ biotech operations: Beyond driving towards milestones and key value-inflection points (as a venture creator), biotech operators must manage hands-on considerations such as the people element: mentoring, developing, and retaining key talent.

9:00 to 16:32: Learnings from leading Pyxis Oncology’s IPO

• On the high-level steps to IPO: James maintains an IPO remains largely a financing event, allowing you to tap public investors. The process is mostly driven by a firm’s bankers/lawyers given the regulatory considerations. From a biotech view, significant focus is dedicated to crafting the company’s story, organizing experimental data/science, and communicating the unique value proposition to would-be investors.
• On the unique aspects to IPO: SEC requirements span board composition, information disclosure, financial reporting, and more. To prepare for such requirements, timelines can vary based on how quickly a firm can pull together the necessary documentation, though 6–9 months can serve as an estimate.
• Learnings from the IPO process: James reflects on how time-consuming the IPO process can be — roadshows to talk to investors, preparing documents to meet regulatory requirements, and more. To allocate resources at Pyxis, James led a team managing the IPO process, while a parallel team managed the day-to-day biotech operations to hit milestones. Additionally, James commented on the scrutiny held towards the founding team. Beyond the ability to ‘get things done’ (the leading attribute of early-stage teams), much greater emphasis is put on the team’s credibility and previous experience to signal confidence to public investors.
• On when to IPO: James once again underlines the theme of timing — seeking to IPO Pyxis Oncology in an external environment that signaled confidence and excitement in the relevant scientific area (e.g., in this case, antibody-drug conjugates), in which he could attract public investors.

16:32 to 21:53: Transition to Arrakis Therapeutics

Arrakis Therapeutics approach

• An overview of Arrakis Therapeutics platform: Instead of targeting disease-driving proteins, Arrakis Therapeutics develops small molecules that bind to the upstream RNA of that protein. This opens up a broader target space to go after historically undruggable protein targets. Arrakis goes after RNA targets by designing synthetic RNAs mimicking target structure, validating the existence of those structures in living cells, then designing small molecules to bind to those structures in high throughput screens. The platform achieves this via three modalities: (1) Intrinsics (small molecule binding induces RNA conformational change), and Extrinsics, including (2) targeted RNA degradation, and (3) Covalent inhibitors (modifying the RNA target permanently via covalent bonds).
• On what motivated the transition from Pyxis to Arrakis: James wanted to enter the space of RNA, given the explosion of biological advancement in the area. Concurrently, there had been a deluge of tools developed to ligand and interrogate RNA as a target. Finally, James was inspired by the Arrakis team, whom he felt was best-equipped to unlock a challenging but biologically important space!

21:53 to 29:04: Lessons on running a biotech BD dealmaking process

• On how the Arrakis-Amgen collaboration came about: As discussed on the Timmerman Report, James took only a month to manage and close a landmark collaboration with Amgen! The partnership started as an initial conversation at a conference between Arrakis CEO Michael Gilman and Amgen SVP of Research Ray Deshaies. Recognizing the complementary interests and skill sets, both sides shared their mutual interests to negotiate a term sheet.
• On how the collaboration was managed: James set up a structured process, wherein a morning debrief examined the latest version of the term sheet, both business and scientific working teams were set up to work through individual line items through the day, and then a version was collated and sent back to Amgen by the evening (but the afternoon for the West Coast Amgen team), to iterate for the next day. This process was then repeated for a month! The process, James acknowledged, emphasized making sure the right people ware talking to one another, and ensuring such conversations were done at the right cadence. Ultimately what enabled such speed was trust between the teams: informal discussions that allowed open conversations regarding specific deal terms to arrive at an agreement.

“Ultimately building that level of trust and understanding of what the other party needs is what enables you to move these deals and get them done quickly.”

• On his learnings from the process of biotech BD: Figuring out what the other party truly wants, putting yourself in their shoes, and figuring out a path to address key issues are all central to successful business development deals. Furthermore, buy-in from senior leaders across both organizations becomes key to align team incentives.

“Getting senior level buy-in, with a rubric and a plan to move the deal forward quickly, is super helpful. That allows you to escalate issues quickly and get them resolved…ultimately [BD] is still about people trying to drive toward some end goal, and you have to relate to people as people.”

• On the RNA-targeting space writ large: Rather than feel threatened by an increasingly competitive space, James welcomes new entrants. The presence of other players confirms the potential of the modality (i.e., ‘there’s a there there’), and introduces orthogonal or complementary approaches to the same biological challenges.

29:05 to End: Diversity in biotech and career advice

On the lack of diversity in biotech, and how to address it: James concedes that he hasn’t found many Black people in senior leadership positions in biotech. James views diversity as a question of health equity, translated at each level of the organization: which patients can access the drug, which kinds of drugs are developed (e.g., Arrakis’ ability to develop next-generation small molecules that can still be easily taken orally across the globe!), etc. To achieve an optimal vision for health equity, James looks internally: who makes up the senior leadership and board room of a biotech, which therapeutic indications are being pursued, what kinds of patients are recruited to clinical studies, and who is recruited (and retained!) at the organization.

My personal take is…when you look at the challenge of diversity, it can seem overwhelming. But ultimately it’s about individuals making small decisions to do things, whether it’s choosing to mentor someone or going to a specific conference to be seen as a minority in a space… that’s all really valuable and we can all play a part in that.

On advice to bioentrepreneurs: James recommends to dive into the things you want to do most — not sticking to a prescribed path, learning as much as you can, and leveraging the lessons learned throughout your journey.