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United States securities and exchange commission logo
November 30, 2020
Owen Hughes
President and Cheif Executive Officer
Cullinan Oncology, LLC
One Main Street
Suite 520
Cambridge, MA 02142
Re: Cullinan Oncology,
LLC
Draft Regiistration
Statement on From S-1
Submitted November
2, 2020
CIK No. 377-03734
Dear Mr. Hughes:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 filed November 2, 2020
Prospectus Summary
Our Hub-and-Spoke Business Model, page 2
1. Please revise your
disclosure to provide more detail regarding why you believe the hub-
and-spoke business
model enables you to maintain an optimal capital structure, attract
leading collaborators,
and promotes asset flexibility. Your discussion should include
mention of the
segregation of assets and liabilities, dividend or revenue sharing structure
between Cullinan
Management and the operating subsidiaries, and any agreements in
place between Cullinan
Management and the operating subsidiaries regarding shared
services and oversight
responsibilities, each to the extent relevant.
Owen Hughes
FirstName LastNameOwen
Cullinan Oncology, LLC Hughes
Comapany 30,
November NameCullinan
2020 Oncology, LLC
November
Page 2 30, 2020 Page 2
FirstName LastName
2. Please revise the graphic depiction of your hub and spoke business
model to indicate your
ownership percentage in each of the subsidiaries. Your ownership in
each of these
subsidiaries should be clarified throughout your registration
statement. For example,
revise the descriptions of each of your product candidates to clarify
your percentage
ownership of the subsidiary developing the candidate, revise
references to your
subsidiaries to use the partially/wholly owned qualifiers and revise
your risk factor on
page 19 referencing third party investors' rights in your subsidiaries
to clarify the
percentage of each subsidiary held by third party investors,
collaborative partners or
licensors.
Our Pipeline, page 3
3. Please revise the product pipeline table on pages 3 and 121 to clearly
break out each stage
or phase of clinical trials required for each product candidate. For
instance, for clinical
stage, the chart should reflect each phase of trials that your product
candidates are
required to complete to advance to the next stage of development. The
revised table
should inform potential investors of the current stage of development
of each product
individually and the stages remaining before commercialization of the
discussed
candidates may be achieved. In this regard we note that the current
pipeline table ends at
Phase 2.
In addition, remove the terminated programs from the table, as it
should focus only on
those programs that are presently material to the business.
Risk Factors
Our ability to realize value from our subsidiaries..., page 20
4. We note the following on page 20: "Our equity interest in our
subsidiaries may be further
reduced in the event such companies require additional capital and it
is obtained from
third party investors rather than us. As a result, we may not be able
to exercise control
over the affairs of any subsidiaries." Please expand your disclosure
to explain how your
majority owned operating subsidiaries could seek and accept capital
from third party
investors, thereby diluting your ownership and control over such
entities, without your
consent.
Cullinan MICA, page 105
5. Please revise your discussion to describe the two milestone events
that are conditions to
closing an additional $16 million investment in Series A Senior
Preferred Stock.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Estimates
Equity-Based Compensation Expense, page 117
6. Once you have an estimated offering price or range, please explain to
us how you
Owen Hughes
FirstName LastNameOwen
Cullinan Oncology, LLC Hughes
Comapany 30,
November NameCullinan
2020 Oncology, LLC
November
Page 3 30, 2020 Page 3
FirstName LastName
determined the fair value of the units underlying your equity
issuances and the reasons for
any differences between the recent valuations of your units leading up
to the initial public
offering and the estimated offering price. This information will help
facilitate our review
of your accounting for equity issuances including stock compensation
and beneficial
conversion features.
Business
The Cullinan Approach, page 126
7. We refer to your diagram on page 126 and the surrounding narrative,
and note the
resemblance of your hub-and-spoke model to an investment firm with
underlying portfolio
companies. Please provide your analysis regarding the applicability of
the Investment
Company Act of 1940 to your business.
License Agreements, page 155
8. Please revise the description of royalties due under the Taiho License
Agreement to
specify within ten percentage points the royalty rate, rather than
providing a range of a
"low single digit to low double digit" royalty. Additionally, quantify
all amounts paid to
date, including the license fee paid and shares issued to Taiho.
9. Please revise the description of your agreement with MIT to quantify
all amounts paid to
date, the number of shares issued under the agreement and disclose the
royalty rate within
ten percentage points.
10. Please revise the description of the DKFZ/Tubingen license agreement
to quantify all
amounts paid to date, including upfront and option exercise fees and
shares issued to
DKFZ/Tubingen pursuant to the agreement.
11. To the extent the performance benchmarks provide DKFZ/Tubingen with a
right to
terminate the agreement, they appear material and require disclosure.
Please revise to
describe the benchmarks and applicable timeframe. Alternatively,
explain the basis for
your belief that the consequences of failing to meet a benchmark are
not material.
Intellectual Property, page 160
12. Please revise your intellectual property disclosure to clearly
describe on an individual
basis the type of patent protection granted for each technology, the
expiration of each
patent held, and the jurisdiction of each patent. In this regard, it
may be useful to provide
this disclosure in tabular form to support the narrative already
included.
Exhibits
13. Please file the following as exhibits to the registration statement:
investor rights and voting agreements with third parties mentioned
on page 20;
Shared Services Agreement discussed on page 201; and
Owen Hughes
Cullinan Oncology, LLC
November 30, 2020
Page 4
Royalty Transfer Agreements discussed on page 201.
Alternatively, please provide an analysis regarding the applicability
of Item 601(b)(10) of
Regulation S-K to these agreements.
General
14. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Vanessa Robertson at 202-551-3649 or Kevin Vaughn at
202-551-3649
if you have questions regarding comments on the financial statements and
related
matters. Please contact Laura Crotty at 202-551-7614 or Suzanne Hayes at
202-551-3675 with
any other questions.
FirstName LastNameOwen Hughes Sincerely,
Comapany NameCullinan Oncology, LLC
Division of
Corporation Finance
November 30, 2020 Page 4 Office of Life
Sciences
FirstName LastName