Biotech researcher Colleen Cutcliffe designed probiotics to help diabetics lower their blood sugar. Now she’s got a handful of expensive supplements for sale – and Halle Berry on board to help sell them.
By Isabel Bekele, Forbes Staff
INIn 2007, Colleen Cutcliffe’s daughter was born prematurely at just four and a half pounds, and spent the first month of her life in the intensive care unit taking antibiotics. As she grew, she experienced metabolic issues and food sensitivities. Cutcliffe, a trained biologist with more than 20 years of research experience, believed that the root of her daughter’s problem was in her gut, as antibiotic usage can lay waste to the “good” bacteria that reside there. This realization inspired Cutcliffe to found Pendulum Therapeutics, a San Francisco-based startup that develops targeted probiotics for gut health.
“I realized, ‘oh my gosh, we could help millions of people, including my own daughter,’” says Cutcliffe, Pendulum’s CEO. “And why not at least give it a shot?”
In 2012, she started Pendulum along with fellow scientists Jim Bullard and John Eid, to develop a new line of probiotics targeted at gut health and the myriad of ailments that are at least partly related to the disruption of the microbiome, the flourishing microorganisms that live there. The company has raised $126 million from investors that include Sequoia, Meritech, the Mayo Clinic and even actress Halle Berry, at a valuation of $307 million as of April 2021. Last year, revenue reached an estimated $11 million. With multiple products now on the market, Pendulum expects this year’s revenue to nearly quadruple, which would put it just over $40 million. Those numbers helped Pendulum gain a spot on this year’s Forbes Next Billion-Dollar Startups list of 25 venture-backed companies we think most likely to reach a $1 billion valuation.
There’s been no shortage of companies targeting the microbiome, ranging from companies creating prescription drugs for specific diseases to startups flogging cures for an imbalanced gut on Instagram, as the U.S. market for probiotics has ballooned to $17 billion. Flagship Pioneering, the biotech investment firm and incubator behind Moderna, has launched half-a-dozen, including Seres and Evelo, to target disease. Meanwhile, startups like Seed and Athletic Greens sell probiotic supplements with promises of better health. Dr. Adam Perlman, a Mayo Clinic integrative medicine researcher who is discussing potential research with Pendulum, calls microbiome research “one of the next great frontiers” in healthcare.
But this is moon-shot science. While scientists believe that a disrupted microbiome is linked with numerous diseases, from multiple sclerosis to rheumatoid arthritis, they’re only now just beginning to understand how–let alone precisely which prebiotics, probiotics and medical foods can help. “There’s a lot of data that clearly shows [the microbiome impacts our health], but a lot of that data is associative,” says Dr. Mary Ellen Sanders, the founding president of the International Scientific Association for Probiotics and Prebiotics.
That helps explain why it’s been such a long slog for Pendulum to get to this point. But having persevered, it now believes it has an edge: Its flagship product, called Glucose Control, is designed to help diabetics control their blood sugar. That’s an enormous market, with more than 37 million Americans living with diabetes. Pendulum published a double-blind clinical study of 76 people that showed its Glucose Control capsules helped reduce type 2 diabetics’ blood sugar in certain instances in the peer-reviewed journal BMJ Open Diabetes Research and Care.
Yet Pendulum has opted to market those capsules (which cost a whopping $215 for a monthly supply) as a so-called “medical food” rather than taking them through the rigorous FDA approval process as a drug. Its other gut-health products, including Akkermansia muciniphila, a microbe that is one of the key ingredients in Glucose Control, are marketed as dietary supplements and have never been through clinical trials on their own. The company says it has other clinical trials underway, including one to study whether Glucose Control can help improve bone density in early postmenopausal women. But because none of its products are FDA-approved, consumers are often left to their own devices to figure out what they need and must pay out of pocket as insurance won’t cover the cost. While experts say it’s rare to run into health problems from taking probiotics you don’t need, it’s difficult to know whether there could be long term side effects as such probiotic supplementation simply hasn’t been studied enough yet.
“I feel like a lot of my career has been just the grit of learning what people have already discovered, figuring out where there’s opportunity to be creative, and then just being really diligent about developing products that have real efficacy behind them,” says Cutcliffe.
Cutcliffe, 46, grew up in Atlanta, the daughter of Chinese immigrants, never imagining that she’d become a scientist. She chose biochemistry as her major at Wellesley College because she found the classes easy, but over time she got excited about the science. She ultimately got a Ph.D. in biochemistry and molecular biology at Johns Hopkins, followed by a postdoc at the Lurie Children’s Hospital of Chicago in 2004.
After a brief stint at Elan Pharmaceuticals, where she researched Parkinson’s disease, she headed to Silicon Valley to lead the biology department of Pacific Bio, which makes genome-sequencing tools. Cutcliffe met cofounders Bullard and Eid–both scientists who are now, respectively, the company’s chief technology officer and chief science officer–there. Over conversations in bars and at team-bonding events, the three talked about using Pacific Bio’s instruments to study the microbiome. They pitched the idea to PacBio’s then-CEO Michael Hunkapiller. He wasn’t interested. (Hunkapiller did not respond to requests for comment. Bullard and Eid declined to be interviewed.)
“He was essentially my first no in a long series of no’s,” Cutcliffe says. Though neither Cutcliffe nor her cofounders had experience starting a business, they figured they had little to lose. “I was like, well, if he’s not going to do it, I’ll go do it,” Cutcliffe says.
Researchers were then just becoming interested in the microbiome. While the concept dates back to the late-1600s, it wasn’t until 20 years ago that researchers began to understand that the microbes that inhabit our bodies could provide health benefits. Papers abounded, but scientists’ hypotheses were difficult to prove. While companies like Rebiotix, which focuses on treating C. diff infections with bacteria, and Second Genome, which studies microbiome data, were founded then, Cutcliffe recalls “getting rejected up and down Silicon Valley” before the Mayo Clinic wrote the company a $300,000 convertible note in 2014.
“We really hit it off with Colleen,” says Andrew Danielsen, chair of Mayo Clinic Ventures. “She was a great cultural fit for us.”
At first the founders focused on sequencing the microbiome. Building off earlier research into a microbe known as Akkermansia muciniphila, they compared the microbiomes of people with type 2 diabetes versus those without it and found the diabetics had less of this key bacteria. Pendulum aimed to replace it as a way to help them regulate blood sugar. It packaged Akkermansia with four other probiotics and a prebiotic into capsules it called Glucose Control. “When we have type 2 diabetes, there’s evidence that there’s an imbalance of bacteria in the gut,” says Dr. Perlman.
Relying on bacteria as a treatment for diabetes isn’t settled science, though. Dr. Sanders, a probiotic microbiology consultant for more than 30 years, cautions that just because people with a disease have a different microbiome than those who are healthy doesn’t prove that adding specific bacteria to their microbiome can help manage their disease. Then, too, targeting blood sugar alone isn’t enough, says Dr. Pieter Cohen, an associate professor at Harvard Medical School who researches supplement safety. “For a product marketed towards people with diabetes, you have to make sure that the product would also decrease the complications of diabetes, such as visual loss, kidney disease, heart attacks and strokes,” he says. (Pendulum says that none of its products are meant to treat disease.)
While Akkermansia muciniphila was first discovered in 2004, it’s extremely difficult to make commercially because it can’t tolerate oxygen. When Pendulum first considered developing the strains, it hoped to outsource manufacturing, but no such plant existed. Instead, Pendulum hired specialized microbiologists to design fermentation and gas tanks that could bubble out oxygen, and ultimately built its own 10,000 square feet plant in San Francisco. Cutcliffe says Pendulum is the only company that has cracked the code on an oxygen-free manufacturing process that can grow large amounts of Akkermansia.
That allowed Pendulum to patent the process of manufacturing the bacteria, making it harder for anyone to introduce a competing product. It also patented the use of specific bacteria for particular health problems, like glucose control. Pendulum has a total of 22 patents with 63 more pending. “You can’t patent the bug, but the bug in relation to a disease or problem–you can patent that,” says Hugh Martin, Pendulum’s chairman and PacBio’s former CEO. “We’ve been very, very aggressive in trying to patent things.”
Developing a product is one thing, getting consumers to buy is another. In 2020, the company launched Glucose Control in a 90-day bundle along with nutrition coaching and two free A1C blood-glucose tests. Consumers balked at the $495 price. Pendulum ditched the packages and now markets the capsules on their own for $215 for a 30-day supply (discounted to $165 for subscribers).
Pendulum’s aggressive marketing also ran into trouble. In 2020, the National Advertising Division, an independent group that evaluates advertising claims, told Pendulum it couldn’t market a probiotic’s ability to lower blood glucose levels, when that’s typically only claimed by prescription drugs.
Cutcliffe fought back, sharing all the research the company had done. In March 2021, the advertising watchdog said Pendulum had the data to support its claims, but suggested limiting the product’s marketing to diabetics already taking the drug metformin and deleting references to percent reductions in blood glucose. Pendulum complied.
Cutcliffe considers that a win. “It was so validating,” she says. “It put us on a totally different tier than anything else out there.”
Since then, Pendulum has launched five additional products, including Akkermansia repackaged individually at a lower price of $89 for a 30-day supply, and a probiotic blend it calls Metabolic Daily designed to “optimize metabolism.” None have undergone clinical trials. That’s perfectly legal for dietary supplements, but raises red flags for some experts. “A company should not be able to [make] claims, such as ‘supports metabolic health,’ without undergoing a clinical trial,” says Glenn Gibson, a food microbiology professor at the University of Reading.
That labeling, of course, is part of what convinces consumers to buy. The company not only sells its products at the Cleveland Clinic’s online store, but also on Amazon, where consumers can search for medicinal creams and supplements of varying efficacy. Cutclliffe says that selling on Amazon was important to meet customers where they are.
Pendulum added a little glitz in February when it hired actress Halle Berry as its new chief communications officer. Berry, who has diabetes and personally uses Glucose Control, has since been profiled in Harper’s Bazaar, looking glamorous in a black v-necked dress and gold chains and holding bottles of Pendulum’s Akkermansia and Metabolic Daily. “What feels expensive and niche today will feel like something you can’t live without tomorrow,” she tells Forbes by email.
Cutcliffe figures that hiring Berry will help Pendulum bring its probiotics to the masses. Or at least to those who can afford to spend hundreds—if not thousands—a year on its gut supplements.
“Nobody really knows who we are,” she says. “We spent a lot of time on the science, kind of nose down figuring out all the gritty work. Now, I think the name of the game is, how do you come out and be a rockstar marketer?”
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