Sunday, September 16, 2007

Has Rosetta Found the Cornerstone to Corporate Success?

Last week’s formation of Regulus Therapeutics should give a boost to the whole field of microRNA-based therapeutics as it lends credibility to microRNAs as a new drug development and diagnostics platform. Part of this boost should come in the form of funding from larger pharmaceutical and diagnostics entities for companies with a credible and well-developed microRNA IP estate.

I would therefore like to take a closer look now at Rosetta Genomics, next to Regulus arguably the only other major pure-play microRNA-focussed company. Rosetta has pleasantly surprised me by assembling a strong IP portfolio, which it has then followed up with a series of well-designed corporate and academic partnerships. This is complemented by a growing tool-box allowing for clinically-relevant extraction, detection and measurement of microRNAs. Like other players in this field, Rosetta believes that given the emerging importance of microRNAs in gene regulation, these molecules would also be involved in human disease so that they could be both harnessed for clinical diagnostics and therapeutics.

Rosetta is an Israel-based company, founded on the discovery and patenting of human microRNAs using high-throughput computing and bio-technologies (2005 Nature Genetics study). In the wake of the Human Genome and other sequencing projects, the founders of Rosetta hypothesised that the key to human complexity was not due to an increased number of genes, but at least partly due to the emergence of primate- and even human-specific microRNAs, and their search for new microRNAs consequently accommodated that notion. This was against the mainstream of most microRNA discovery efforts then which heavily relied on the notion of biological conservation, and Rosetta would be able to detect a number of microRNAs that had been missed.

Indeed, their hypothesis was supported by their 2005 Nature Genetics paper, almost doubling the number of sequenced human microRNAs at that time (adding 89 microRNAs), a number of them not conserved beyond primates. Based on partly theoretical considerations, predictions as to the total number of microRNAs were also revised upwards from initial estimates in the field of around 250 to well over 800. These efforts have resulted in patent applications exceeding 500,000 pages, probably using the same computing power used for predicting microRNAs.

I should add, however, that most of these non-conserved microRNAs were restricted to 2 clusters in the genome and should therefore be of less diagnostic value as would be expected for an equal number of more randomly distributed microRNAs. Furthermore, most of the previously cloned microRNA, particularly those by Thomas Tuschl, licensed exclusively for therapeutics use to the parent companies of Regulus, Alnylam and ISIS, should be amongst the biologically most important microRNAs simply based on their higher expression levels (the reason why they were detected by cloning in the first place).

At that point, I thought just another publication based on bioinformatics that was showing that the complexity of microRNAs may be higher than initially thought. Also, their theoretical approach and computer-driven technologies made me wonder whether this would ever develop into a meaningful hands-on biotechnology operation.

Rosetta took a number of steps to change this perception. First, it has gained access, at least for diagnostic use, to the large majority of human microRNAs through licensing agreements, most importantly with the Max-Planck Institutes and Rockefeller. Next, similar to what Alnylam has done, they have come out with a number of high-quality, peer-reviewed publications, ranging from microRNA detection technologies to the functional elucidation of certain disease-associated microRNAs. Partly, this was done through academic collaborations which allows them to stay product focussed and capitalise on opportunities should they arise from discoveries in microRNA research. Other collaborations with corporate and clinical partners have given them access to relevant technologies such as one with ISIS for the therapeutic targeting of microRNAs using antisense technology, and clinical specimens from hospitals which will be used to test their diagnostics.

How they were able to orchestrate this transformation is not clear to me and quite impressive, but looking at the line-up of illustrious early investors and SAB (scientific advisory board), populated with Nobel Laureates and the likes of Robert Langer (also on Alnylam’s SAB), suggests that they have enough influence to get the attention of key audiences. The expansion of their activities in the US should further nurture current and future partnerships and attract new investors.

These investors may be attracted by Rosetta’s first issuances of microRNA patents and its strategy to use early revenues from their more mature microRNA diagnostics efforts to fund the potentially more lucrative area of microRNA-based therapeutics on quite attractive financial terms. It is their aggressive goal to have 3 microRNA diagnostics products on the markets by the end of next year, with their most advanced program being for the classification of Cancer of Unknown Primary (CUP) where the goal is to identify the original tissue from which a cancer has spread. A recent presentation at the AACR cancer meeting suggests that this can be achieved with 85% accuracy by profiling 19 microRNAs. Their initial therapeutic pipeline, meanwhile, focuses, similar to Regulus, on diseases of the liver, such as liver cancer and HCV infection. This is done in collaboration with ISIS Pharmaceuticals, and it will be interesting to see how the recent formation of Regulus will affect this relationship.

After a difficult IPO and little attention from Wall Street, the time is ripe for Rosetta and Regulus to lead the charge in translating the important biology of microRNAs into medical use.

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By Dirk Haussecker. All rights reserved.

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