Tuesday, November 27, 2007

Alnylam Granted Expanded Kreutzer-Limmer Patent Series in Germany, Signals Its Intention to Enforce Dominant IP Position

Yesterday, Alnylam announced issuance of the new Kreutzer-Limmer patent series in Germany, covering double-stranded RNAs of 15 to 49 base-pairs for gene silencing in mammals. This is quite significant and Alnylam’s accompanying press release made it clear that this should be understood as a watershed event, sending a stern signal to companies like Silence Therapeutics, RXi, Nastech, Dicerna and others that thought to have identified Kreutzer-Limmer as a potential loop-hole in Alnylam’s IP strategy by employing double-stranded RNAs (dsRNAs) longer than Tuschl’s 19-23 base-pair siRNAs and/or making them blunt-ended to emphasize an apparent difference to the classical Tuschl siRNA that features 3’ overhangs. These patent workaround efforts seemed to bear first fruits last year when the original Kreutzer-Limmer I patent series was restricted by the European Patent Office to covering siRNAs between 15 and 21 base-pairs in length (opposing parties: Sirna [now Merck], AstraZeneca PLC, Atugen [now Silence Therapeutics], Janssen Pharmaceutica N.V., and Sanofi-Aventis).

From a partnering perspective, this seemingly small development could have important implications for striking the next major deal, since which company would feel comfortable paying hundreds of millions of dollars for a technology license that appears to be circumventable.

Kreutzer-Limmer was Alnylam’s first line of defense against such blunt-end siRNAs and siRNA precursors longer than 23 base-pairs (aka Dicer substrates) given that, depending on the explicitly granted range of double-stranded RNA lengths, Kreutzer-Limmer would directly cover such structures. Its short-coming, however, is that in 1999, Kreutzer and Limmer did not understand well how these dsRNAs exactly caused gene silencing, which is what Tuschl II is famous for. While I consider Tuschl II, in addition to the ubiquitous Fire-Mello patent, as the fundamental patent series for therapeutic RNAi, due to its excruciatingly detailed explanation of what it takes to effect efficient RNAi in mammalian cells, it is the early priority date of Kreutzer-Limmer’s invention that makes this patent so potentially valuable and dangerous, and explains why Alnylam saw it necessary to remove any uncertainty and obtain exclusive access to it by acquiring Ribopharma AG in 2003.

I found it curious that a number of companies have chosen to take licenses to Kreutzer-Limmer, but not Tuschl II. While that may be interpreted as reflecting the fundamental importance of Kreutzer-Limmer, it was as if by pursuing this strategy, it is almost made implicit that as soon as the scientifically less detailed Kreutzer-Limmer series were curtailed in scope due to heavy opposition, the field for newly patentable RNAi inducers would be wide open. In this case, Alnylam would probably have argued in a second line of defense that, although not spelt out letter by letter, Tuschl II would also cover Dicer-substrate and other RNAi inducers that obviously function either as siRNA precursors (= pro-drugs) or are derived from it, for example 3-stranded siRNAs (meroduplexes). This argument becomes particularly relevant in the case of a weakened Kreutzer-Limmer as this ironically would directly strengthen Tuschl II. In this way, Alnylam holds all the cards and may play them as they wish.

Silence Therapeutics, in particular, will not be very happy with the outcome in Germany, not only because it and others, myself included (to be explained in my next posting), sees itself as a major force in RNAi in Europe, but also since their blunt-end, modified dsRNA is not only the size of the classical Tuschl siRNA, but with Kreutzer-Limmer any gene silencing dsRNA, modified or unmodified, is covered. Silence Therapeutics’ approach could be likened to first taking an invention (here: Tuschl’s siRNAs), then impair its function (here: by flushing the ends blunt), and finally rescue some of the original function by adding further changes (here: by introducing a pattern of RNA modifications). Certainly original, in its own complicated way.

I should disclose here that I largely agree with Alnylam’s view of their IP position and have invested in this company, but at this time I particularly felt like speaking out on all these confusing claims about proprietary RNAi compositions that threatened to hurt investments in RNAi Therapeutics. The acquisition of Sirna Therapeutics by Merck was certainly triggered in part by Sirna’s IP claims which now appear to be weaker than originally hoped for by the buyer and has escalated into a costly and time-consuming mess for a number of companies. In the same vein, I should also emphasize that I am likewise invested in companies that I have strongly criticized in this and other contexts and that I am therefore not wed to any company’s view of the space. It is in this spirit that I hope that Alnylam does not use their IP position to block the evaluation of RNAi inducers that differ from the classical siRNA design in more than just a modification here or an overhang there. Financial incentives should therefore be created for investments in such start-ups without requiring a $1 billion upfront license fee.

PS: In my next posting, barring further developments, I would like to provide the promised company-by-company overview.

Two additional recent developments that I would like to briefly comment on:

1) The FDA removed the clinical hold on Targeted Genetics’ rheumatoid arthritis AAV gene therapy that had been suspected to have played a role in the unfortunate death of a clinical trial participant. I am relieved by this judgment since there was just no good scientific evidence that the gene therapy caused or was associated with the fatality. AAV vectors are currently probably the most potent method to deliver RNAi in vivo and there are a number of indications where AAV-RNAi may be years ahead of synthetic siRNA strategies, and where the benefits outweigh the real risks of gene therapies. One such indication would be AAV-RNAi for treating Huntington’s Disease, where published and orally presented data so far suggests superiority of the AAV approach compared to siRNAs and that Targeted Genetics should now be in a better position to pursue in collaboration with Sirna Therapeutics/Merck and Bev Davidson’s group in Iowa.

2) At a recent symposium on RNAi and its targeting in Sonoma, California, Ian MacLachlan from Protiva presented more data on the efficacy of SNALP-siRNA delivery in non-human primates. According to the abstract, more than 90% gene silencing of ApoB, with silencing lasting for several weeks, could be achieved by single-dose intravenous administration. These are impressive numbers and the task is now to minimize the toxicities associated with cationic liposomes. I am quite impressed by Protiva’s past work not only on RNAi delivery (in collaboration with Sirna Therapeutics and Alnylam), but also on dissecting the causes for the toxicity, and would expect them to be the first to find a solution for this problem. Unfortunately, the ownership and know-how of SNALP delivery technology is highly contested and I can only urge the involved parties to consider working together on this promising technology. During a recent conference call by Tekmira it was apparent that a lack of suitable scientists caused delays in the development of SNALP technology. I would even venture as far and propose that Alnylam’s delays on their systemic delivery programs have probably cost the company more in terms of reagent, labor, time and market cap than the combined market cap of Tekmira and Protiva.

Friday, November 23, 2007

The Confusing World of AtuRNAi, Stealth siRNAs and mdRNAs (Part II)

(RNAi IP discussion continued from previous entry)

If long dsRNA had worked exactly in humans as it did in the worm and plants, then you would have expected an immediate flood of publications reporting the same. Long dsRNA for gene silencing, however, were impractical for most vertebrate cell applications due to the induction of non-specific cytokine responses that essentially shuts down most gene expression and therefore does not allow for targeted gene silencing. An exception may be embryonal cells which lack an interferon response and for which long dsRNA was reported to induce specific gene silencing first in zebrafish in 1999 (Wargelius et al. Biochem Biophys Res Commun. 263:156) and then in mice (a mammal) in late 2001 by the Filipowicz group (Basel, Switzerland).

These latter findings, however, were overshadowed earlier in 2001 by a publication from the Tuschl group in Germany, representing the culmination of a body of work he first started as a post-doc in the Bartel/Sharp labs during his time at the MIT, and then as an independent investigator at the Max-Planck Institute in Goettingen. While small RNAs were then known to derive from long dsRNAs, their molecular role in guiding the recognition and destruction of target mRNAs was only hypothesized and their structure mostly unknown. A breakthrough towards this understanding came by establishing a biochemical system in Drosophila (fly) lysates that recapitulated RNAi in the test tube (1999, MIT). One year later, they reported that during this reaction both the long dsRNA as well as the target mRNA is cut at 21-23 nucleotide intervals (MIT, 2000), thereby providing a link between dsRNA processing and mRNA targeting. In early 2001, then at the MPI, Elashir and colleagues in Tuschl’s lab further delineated the relationship between dsRNA processing and target mRNA cleavage in the Drosophila system, including the observation that the mRNA is cut around 10 nucleotides from the 5’ end of a 29 base-pair dsRNA (kind of Dicer-substrate). Importantly, by sequencing the 21-23 nucleotide RNAs by borrowing a cloning technique developed for the discovery of microRNAs around the same time, they found that the small RNAs were clustered consistent with long dsRNA processing into 21-23 base-pair DUPLEX RNAs. Moreover, the small RNAs were found to contain 5’ monophosphates and 3’ hydroxyl groups all consistent with the notion that long dsRNA was processed by an RNase III enzyme into 21-23 base-pair duplexes (reported to be the Dicer enzyme by Hannon in Cold Spring Harbor in the same month).

This led them to test whether small duplex RNAs were crucial functional intermediates between long dsRNA and mRNA cleavage, by synthesizing duplex RNAs and adding them to the Drosophila system. I quote: “Perhaps the 21-nt RNAs are present in double-stranded form in the endonuclease complex, but only one of the strands can be used for target RNA recognition and cleavage”. Indeed, this prediction turned out to be correct and synthetic duplex RNAs could silence mRNAs in this system, and duplexes with 2-3 nucleotide 3’ overhangs, the hallmark of the hypothesized RNase III-type processing, worked best. These data then formed the basis for the Tuschl I patent series to which Alnylam, RXi, and Sirna Therapeutics obtained co-exclusive licenses. My guess is that Alnylam actually would not mind if this patent wasn’t issued after all, since for some obscure reason UMass, unlike the Whitehead Institute, MIT, and MPI decided to grant RXi and Sirna co-exclusive licenses. Equally curious is the fact that while in the January 2001 paper the duplex RNAs were shown to work only in fly lysate, in the Tuschl I series, out of the blue, human cell studies are described. I could well imagine that the ultimately issued Tuschl I patent will be solely focused on the fly data, so that the first human siRNA description would be exclusive to the Tuschl II series (I would encourage you to read my 27 May, 2007 Blog “2007RNAi Therapeutics IP: The Importance of Being Tuschl” on this issue).

Clearly, work in human cells was ongoing at the time in Tuschl’s lab, and they conclude the fly paper in Genes and Development with the ominous statement: “The siRNAs may be effective in mammalian systems, where long dsRNAs can not be used because they activate the dsRNA-dependent protein kinase (PKR) response (Clemens 1997). As such, the siRNA duplexes may represent a new alternative to antisense or ribozyme therapeutics.” The compositions, methods, and uses of synthetic siRNAs in human cells are described in excruciating detail in the Tuschl II patent series, much of which has issued in the EU and US and is exclusively licensed to Alnylam.

A lot of the claims by other companies such as Silence Therapeutics and Invitrogen’s Stealth siRNAs center around the fact that Tuschl II emphasizes the 3’ overhangs of siRNAs, and that blunt-end siRNAs are therefore not subject to Alnylam’s IP estate, but completely ignore the fact that Tuschl, both in his fly and human work indeed tested blunt-end siRNAs, just that they did not perform as well as the overhang siRNAs. I speculate that the reason why Alnylam has not come out and spelt out this fact is because they may think that their equally exclusively licensed Kreutzer-Limmer patent series (use of short dsRNAs for gene silencing in mammals) provides even better coverage for the use of blunt-end siRNAs. Alnylam’s competitors, including Merck, have therefore focused their efforts of fighting Alnylam’s IP dominance on narrowing the scope of Kreutzer-Limmer, particularly in Europe, and have succeeded in doing so last summer to reduce the covered length to 15-21 nucleotides. However, a so called divisional patent application based on the Kreutzer-Limmer patent was granted in Europe in 2005 and has even broader claims than the original patent (15 to 49 base-pair duplexes). It is further ironical that a weakening of Kreutzer-Limmer would only strengthen Tuschl II’s scope. In addition, Tuschl II further covers modifications and conjugations to siRNAs, a claim which Alnylam has cemented by obtaining an exclusive license to the Crooke modification patent estate from ISIS.

While RXi may have marketed their recent StealthTM siRNA license from Invitrogen for therapeutic purposes, in my mind “StealthTM” siRNAs are nothing more than a marketing gimmick disguising the fact that these are 25 base-pair, blunt-end siRNAs with a supposedly magical pattern of base modifications. I would therefore not be surprised if Stealth failed to fulfill the non-obviousness criteria, in addition to the fact that I have not seen any evidence that Stealth, per se, performs any better, if not worse than the classical Tuschl siRNA design. What RXi probably won’t tell you is that Invitrogen has deemed it necessary to gain access to the Kreutzer-Limmer patents through a licensing agreement with Alnylam for the use of Invitrogen’s siRNAs for research applications only.

With regards to Dicer-substrate, licensed by both Nastech and Dicerna, I see practical value in that Dicer-substrates may be beneficial for RNAi delivery purposes in that they provide increased flexibility in covalently conjugating the Dicer-substrate to the delivery carrier, while siRNAs have to be reversibly conjugated, e.g. via disulfide linkages, to achieve the same. However, this does not guarantee the uniqueness of Dicer-substrate since a lot of the duplex length and the conjugation idea is subject to the pre-dating Kreutzer-Limmer and Tuschl patent series. Moreover, in his fly experiments with 29 base-pair duplexes, Tuschl already demonstrated “RNase III-substrate”. Hannon should also have relevance for Dicer substrate in that he was the first to describe Dicer to be the enzyme that mediates dsRNA processing in flies, and likely humans.

Hannon continued his work on the practical implication of dsRNA processing and was one of the first to explicitly describe the use of Dicer-substrates in humans in the form of DNA-directed hairpin expression cassettes driven by a Pol III promoter. While this 2002 paper in Genes and Development was as much inspired by the newly emerging knowledge on microRNA processing as much as by Tuschl’s 2001 findings, “Tuschl and colleagues first showed that short RNA duplexes, designed to mimic the products of the Dicer enzyme, could trigger RNA interference in vitro in Drosophila embryo extracts”), the European group (Brummelkamp et al.) that published in Science on the same subject the same month were mostly inspired by Tuschl: “We report here a new vector system, named pSUPER, which directs the synthesis of small interfering RNAs (siRNAs) in mammalian cells.” In any case, both Alnylam and RXi have gained access to the Hannon patents which touch on both DNA-directed RNAi and Dicer-substrate (synthetic or DNA-directed).

In a confusing turn of events, however, Hannon reported in 2005 that hairpins, in this case synthetic versions though, with longer duplex regions often worked better (= more potent and reliably) than the classical 19 base-pair hairpin design. This could be explained by the observation that the efficiency of RNAi should be enhanced by requiring a Dicer processing step since this is coupled to the RiSC-mediated gene silencing step. The fact that the original 19 base-pair hairpins, first thought to be processed by Dicer, were found to be inferior could be explained by their inefficient processing into siRNAs by some RNases not normally related to RNAi. Essentially the same conclusion was reached by a paper in the same issue of Nature Biotechnology from John Rossi’s group at the City of Hope, this time, however, by employing synthetic 25-30 base-pair duplexes (licensed to Nastech and Dicerna) instead of synthetic hairpins. For a discussion of Dicer-substrate science and IP, please refer to my October 31, 2007 Blog: “A new player in RNAi Therapeutics: Dicerna Pharmaceuticals”.

Besides RNA polymerase III-driven small hairpins, DNA-directed RNAi can also be initiated through more microRNA-like constructs. This was enabled by the elucidation of the microRNA silencing pathway and the trick basically is to design DNA vector constructs that will mimic one of the RNA intermediates during microRNA processing. These methods have the advantage that RNA polymerase II promoters can be employed with potential tissue-specific or other regulation. This should allow for potentially safer DNA-directed RNAi, although RNA polymerase III constructs have extreme knockdown potencies. Brian Cullen’s (Duke) and particularly Narry Kim’s (Seoul, Korea) groups have spear-headed these efforts, but I have not heard from companies yet specializing on the use of such RNAi constructs for therapeutic purposes. It is further likely that the original DNA-directed RNAi patents will be quite important for the commercialization of these later methods.

In addition to employing RNAi triggers that funnel into the RNAi pathway upstream of siRNAs, it is also theoretically possible to make use of at least two more intermediates functioning downstream of siRNA generation: single-stranded guide RNA that recognizes target mRNA within RiSC and a 3-stranded intermediate in which the passenger (=non-targeting) strand is interrupted based on findings from a number of groups, again almost simultaneously about 2 years ago, that the passenger strand was cut prior to guide RNA RiSC loading, analogously to how target mRNAs are cleaved.

The single-strand siRNA method is mostly investigated by ISIS for commercial purposes, probably because it feels that their IP position on single-stranded antisense RNAs would make them the dominant player in single-stranded RNAi. It should be kept in mind, however, that it was again the Tuschl group, known to be close to Alnylam, that first reported on single-stranded RNAi inducers (Martinez et al., 2002) and patents have been filed. Moreover, evidence so far suggests that single-stranded RNAs are only very inefficiently recognized by the endogenous RNAi machinery and it is doubtful that any potential advantages of single-stranded RNAs versus duplex RNAs would ever make up for the inferior potency. Patents covering 3-stranded siRNAs have been filed for by Nastech, although they have not been associated with any of the initial reports on siRNA passenger strand cleavage. It will therefore be interesting to determine the priority dates of the various discoveries, and probably more importantly, data as to the efficiency of these “meroduplex RNAs” (same initials as Nastech’s planned RNAi spin-out mdRNA) compared to other RNAi inducers. Such 3-stranded siRNAs may offer certain advantages with regard to conjugation chemistries and the fact that short RNA strands are cheaper to synthesize than larger ones, but until this is proven it will look just like another thinly disguised patent work-around attempt.

In summary, it is clear that it was Fire and Mello’s discovery on long dsRNAs as RNAi inducers in worms and Tuschl’s extensive body of work leading to the delineation of the classical duplex siRNA that opened up RNAi for therapeutic use. Many of the other developments are directly derived from both of these fundamental discoveries and require appropriate IP licenses. The combination of Tuschl II, Kreutzer-Limmer, and all the other patents it has either exclusive or non-exclusive access to, makes Alnylam the gate-keeper of RNAi Therapeutics. The exact terms of companies wishing to commercialize RNAi Therapeutics will vary depending on their co- or non-exclusive access to some of these fundamental patents, how far removed their exact siRNA derivatives are from the classical siRNA design as well as the ability to prove their utility. While this dominant IP position by Alnylam may make them unpopular and almost look like a bully, one should not forget that concentration and clarity of IP encourages investments particularly in the risky business of drug development and therefore will increase the likelihood of maximizing the therapeutic potential of the technology. It should also be said that Alnylam has been pretty good in de-risking RNAi technology, thereby benefitting the whole field of RNAi Therapeutics, in addition to granting access to RNAi technology through their licensing policy, although the terms will increase the longer you wait. Outside this core RNAi IP, other IP, particularly relating to delivery, but also access to validated targets will prove valuable, albeit much more fragmented.

In my last blog on this RNAi IP series, I would like to briefly discuss individual companies according to technology strength and IP position. Alnylam’s view on this issue will be presented in a special IP-focussed investor presentation on November 28 at the 19th Annual Piper Jaffray Health Care Conference and can be followed live or recorded by webcast on the company’s website.

Erratum: Please note that in my discussion of Dicer-substrate in the October 31, 2007 Blog: “A new player in RNAi Therapeutics: Dicerna Pharmaceuticals”, I mistakenly stated that Hannon’s long hairpin RNAs were DNA-directed, when they actually studied synthetic versions of these hairpins.

Monday, November 19, 2007

The Confusing World of AtuRNAi, Stealth siRNAs and mdRNAs (Part I)

“Next-generation” RNAi is all the rage in the world of the ambitious RNAi start-up. The definition (note that everything is allowed under the guise of the satire): “An RNAi-inducing molecule derived from the classical Tuschl siRNA design, however with a magical pattern of modifications and variations in the exact length of the RNA duplex, sometimes an NA duplex, with overhang or not. As important as the chemistry that may sound impressively inventive to the lay (investing) public is that a proper name is chosen to further accentuate its apparent uniqueness. This is intended to suggest freedom-to-operate with the ultimate aim of attracting investments from people hoping the company will eventually catch up to the market cap of Alnylam (why would you invest in any of their direct rivals otherwise?).”

Considering that it has become commonplace to hear CEOs talk about their RNAi being so unique and advanced that they are now operating in parallel universes, the staid Tuschl siRNA must have really lost its relevance for the development of RNAi Therapeutics. While I think that some select siRNA derivatives given names such as StealthTM RNAi or Dicer-substrate definitely warrant further investigation, as it is yet unclear how well they will perform relative to the simple, but fundamental siRNA design, what I would like to do is to cut through the marketing fog and provide a brief overview of the types of RNAi inducers currently being used at the bench or in the clinic and how I think they relate to each other in terms of IP. In this post I will lay the foundation by giving a summary account of the history of RNAi as a tool, including some of the fundamental patents (and applications), before dissecting some of the Next-generation siRNA designs in a follow-up posting.

Studies on RNAi-related gene silencing really started in the early 90’s in plants with the observation of co-suppression whereby genes that share sequence similarity inhibited each others’ expression. Usually, this was triggered by the inappropriate processing of one of the gene products, typically from an introduced designer gene that is recognized as aberrant and therefore as a threat by the plant RNAi surveillance system. While the mechanism by which this occurs is a scientifically very interesting question, it cannot be used for gene silencing in humans and therefore has little or no relevance to RNAi Therapeutics IP. Parallel work on gene silencing in worms by Fire and Mello, of course, discovered that it was long double-stranded RNA (dsRNA) that was central to inducing RNAi and patents were filed covering dsRNAs longer than 25 base-pairs for gene silencing. This patent can be licensed non-exclusively by almost anybody that wants it, and despite it being based on work in worms and the long dsRNA nature in the stated claims, it is nevertheless considered to be a license that you should add to your IP portfolio anyway, I guess just because it has proven so fundamental to the understanding of RNAi in general and nobody would want to argue that. I also think this highlights the fact that real fundamental scientific insight will be credited by the patent courts even if the exact length of the duplex or modification pattern was not spelt out in the claims letter by letter.

Shortly after Fire and Mello published their research, Kreutzer and Limmer from the University of Bayreuth in Germany reasoned that short dsRNAs may have similar gene silencing effects in mammalian cells. This prediction, as we know, turned out to be true and now forms the basis of the Kreutzer-Limmer patents claiming short dsRNA of around 15-49 base-pairs for the induction of gene silencing in mammalian cells, although the exact length is the subject of patent challenges, including Merck’s opposition in Europe. This early work was considered important enough by Alnylam for them to acquire Ribopharma AG, the company founded on the Kreutzer-Limmer patents. Although I consider Tuschl’s subsequent work to be quite a bit more fundamental to the use of RNAi in mammals, Alnylam understood that it was important to remove any uncertainty as to the dominance of their RNAi IP position given the relative timing and overlapping content of Kreutzer-Limmer and Tuschl.

Around the same time, Hamilton and Baulcombe discovered that small RNAs were generated during plant RNAi. While they were prescient in predicting that these may mediate RNAi, they did not formally prove it and the structure of the siRNA that was detected in those experiments remained unknown. A world away, in Australia, DNA-directed hairpin vectors for reliably inducing RNAi were being described by Waterhouse and colleagues from the CSIRO. Based on the utility and impact of these vectors on plant research, the patents derived from these studies should give the CSIRO a strong position in the agricultural uses of RNAi. In many ways, the commercial development of plant RNAi is more progressed than therapeutic RNAi as traits can now be altered relatively quickly without having to resort to lengthy breeding and selection. I guess the most important question will be how uniform these knockdown phenotypes will be across a field of crops. The CSIRO patents also form partly the basis for Benitec’s claims to the therapeutic uses of DNA-directed hairpin RNAs. The Graham patents form the other pillar of Benitec’s contested patent estate describing the use of DNA cassettes driving the expression of various forms of dsRNAs, although I find these patents to be quite theoretical in nature and wonder whether most of the described non-Pol III expression cassettes would actually work for gene silencing in most mammalian cell types (to be continued…).

Two noteworthy developments last week that I would briefly like to comment on:

1) ISIS released further phase II data for their ApoB-targeting antisense compound mipomersen. The 200mg/week dose reduced by about half the level of bad cholesterol in patients already on stable statin therapy. This looks quite impressive and if no safety issues come up in the larger phase III trials, then this has the potential to become a blockbuster. I’ve been quite critical about mipomersen in the past, particularly due concerns about fatty liver which many scientists in the field would have expected to observe following ApoB knockdown. Safety data for the 200mg dose, based on liver enzyme measurements, however do not indicate this to be a problem. Ultimately, the proof is in the pudding and I would be happy to ultimately have to admit to have been wrong on this issue. ISIS explains the absence of fatty liver due to transcriptional compensatory changes in fat metabolism. Overall, these data augur well for the development of all RNA-targeting platform technologies, including RNAi Therapeutics, as it suggests that minor off-targeting should be well tolerated in many cases.

2) Pfizer announced the acquisition of Coley Pharmaceuticals for almost triple of Coley’s market cap before the offer. Coley Pharmaceuticals is an oligonucleotide therapeutics company that exploits the immunostimulatory properties of oligonucleotides for applications such as boosting vaccines or in the fight against cancer. Actually, I’ve been quite impressed by their OTS presentation in Berlin, particularly their vaccine program. This comes only days after a blog this month where I asked the question when Pfizer will make its big move in RNAi Therapeutics (11 Nov 07 Blog: “When Will Pfizer Finally Make its Big Move in RNAi Therapeutics?”). It is notable that Coley is a Massachussetts company and I would like to think that the proximity to Alnylam will not be an impediment to Pfizer’s new biotech initiative that also appears to more and more focus on oligonucleotide therapeutics. With the new oligo expertise in-house (note that Alnylam does not have another subsidiary to throw into the next deal) and plans to add more staff to a research facility in Cambridge (the headquarters of Alnylam) in addition to a possible biotech incubator near Boston, the plot thickens.

Wednesday, November 14, 2007

Will “Target Protector” Technology Come In Play?

Last month, the Schier lab from Harvard extended their impressive work on the function of microRNAs in the zebrafish model of development (Choi et al.: “Target protectors reveal dampening and balancing of Nodal agonist and antagonist by miR-430”. Science 318: 271).

Antisense oligos to microRNAs are one method to experimentally infer microRNA function through loss-of-function analysis. However, this method becomes problematic when the intention is to study the biology of a particular microRNA-target interaction given the multitude of predicted targets for a given microRNA, typically estimated to be around a hundred per microRNA.

In order to overcome this problem, the investigators designed morpholino antisense oligos (morpholinos are quite popular with the fish community), which they termed “Target Protectors”. These are supposed to hybridise to a defined microRNA target site thereby blocking the function of the microRNA acting on that particular target site. This actually turned out to work quite well in the zebrafish and future publications should demonstrate the versatility of this new methodology.

The reason why I suddenly blog about it is because I had the pleasure today to listen to a presentation by Dr. Alex Schier in which it became apparent to me that there may be investor interest in commercializing the technology. This would complement the microRNA antagonist (“antagomirs”) approach currently pursued by the likes of Regulus, Rosetta Genomics, and Santaris, that aim at therapeutically blocking the microRNA. Given the many targets of a given microRNA, blocking them for therapy is therefore based on the belief that evolutionary pressure should have ensured that their targets are tied to a common biologic phenotype. Target Protectors, on the other hand, may be more specific in upregulating only one transcript that when de-repressed should be therapeutically beneficial. As such, one could imagine targeting the miR-122 target site of HCV, thereby avoiding potential side-effects due to inhibiting the most abundant microRNA in the liver.

It will be interesting to see who will take an interest in this emerging IP estate. It is also notable in this context that Rosetta Genomics, the microRNA target company, has previously mentioned their foresight to patent not only their discovered microRNAs, but also predicted microRNA target sites.

Update (23 November 2007): It has come to my attention that Target Protector has come into play indeed: http://www.stealthbiotech.com/index.asp

Tuesday, November 13, 2007

Nastech’s RNAi Ambitions Hit by P&G Break-Up

Since Nastech announced that Proctor & Gamble would drop their collaboration on a intranasal spray of parathyroid hormone (IN-PTH) for the treatment of osteoporosis last Wednesday, the stock has been falling ever since and lost about 2/3 of its value in less than a week. This is not surprising as it shatters investor confidence in the nasal peptide delivery technology that the company was founded on one and a half year after Merck cancelled a similar agreement with Nastech for the intranasal delivery of an anti-obesity peptide.

Nastech’s experience highlights the risk of investing in biotech companies that are centered on a single, as yet unproven technology. It is therefore worth keeping in mind that RNAi Therapeutics is only one clinical trial or adverse event away from being shaken by similar woes.

With the benefit of hindsight, Nastech always wanted to be everything to everybody and doomed to fail. It does not take a degree in Economics to see that too many clinical programs, including some based on not very well validated peptides, and Blue-Sky Science Projects (like projecting that it would take another 10-15 years to develop an RNAi Therapeutics) were a recipe for financial disaster. While it is good to take pride in your science, the odds are stacked against you in trying to develop technologies all on your own, even in RNAi, an area where so much of the innovation will come out of academic laboratories and you may be better off licensing those while focusing your resources on drug development.

No matter how impressive you think it may sound that your RNAi (Dicer substrate) is so potent that it works at homeopathic doses, that you have found the Holy Grail to off-targeting (Ribo-T), and “solved” the delivery problem (peptide-conjugation), to those in the Art it sounds too good to be true, particularly when data in investor presentations lack critical controls and in the absence of appropriate peer-reviewed publications to support these claims. The burden is now, as they aim to spin out their RNAi unit (mdRNA) for money and visibility, on Nastech to prove to the investing public that there really is some value hidden in their RNAi. Otherwise, it will sound more like yet another pipe dream rather than reality of a company that would like to think that it alone can achieve what the rest of the scientific world is struggling with.

Nastech employees may represent a further RNAi-related value not reflected in the current ~$120M market cap (with ~$58M in cash). After Sirna Therapeutics was bought by Merck, there was an exodus of experienced oligonucleotide scientists that ended up working for Nastech in Bothell, WA. Although I doubt that Nastech’s RNAi IP will be valued very highly at this juncture, their know-how acquired in the process may be viewed as an asset by a larger company looking to jump-start their own RNAi Therapeutics work, similar to the acquisition of Alnylam’s Kulmbach, Germany, operations by Roche in July. Of course, employees may prove to be a fickle asset at a time when money is tight and Alnylam is relocating their European operations back to Cambridge, Mass. The coming days and weeks will be critical for the future of Nastech and their RNAi ambitions.

Sunday, November 11, 2007

When Will Pfizer Finally Make its Big Move in RNAi Therapeutics?

This week, Pfizer crossed my RNAi Therapeutics radar twice again. One has to do with their much-anticipated biotechnology initiative, including an innovation center in the San Francisco Bay Area which, according to news reports, should have RNAi Therapeutics as one of its focus areas. As we all know, Big Pharma has come under pressure with upcoming patent expirations, declining drug approvals due to a conservative FDA and outdated pipelines, but actually has the cash to invest in much needed innovation. The other event was a recurring rumor about their interest in Silence Therapeutics which led to a rapid 25% increase in the shares of the UK/German RNAi Therapeutics outfit in a matter of only two trading days.

Just watching Pfizer’s actions in RNAi Therapeutics from a distance is quite curious. Initially, they appeared to be toying around with DNA-directed shRNAs, but then engaged in a triangular relationship for developing an RNAi Therapeutics for AMD with Quark and Silence based on Silence’ AtuRNAi-type of siRNAs and Quark’s identified target gene. Pfizer also appears to be scouting out RNAi delivery solutions with a deal earlier this year with Mirus Bio that was followed by a neat publication on hepatocyte-specific RNAi delivery in PNAS (see 24 July 2007 Blog: ”Mirus Scientists Publish Elegant Paper on Targeted siRNA Delivery to Hepatocytes”). Around the same time, I counted at least seven delegates from Pfizer at thie year’s leading RNAi Keystone conference who, I suspect, weren’t there just to satisfy their scientific curiosity.

It seems prudent for Pfizer to learn more about the potential for RNAi Therapeutics first-hand through smaller collaborations with groups that have demonstrated know-how in RNAi Therapeutics before committing more significant resources. On the other hand, if they really saw potential in the technology and given their balance sheet, it would appear that the longer they wait the costlier the licenses that Novartis, Roche, and others regard as a must for freedom-to-operate. Particularly with the recent Alnylam-Roche deal, the pressure among Big Pharma is only going to increase. With Merck’s chair now empty at Alnylam’s table, Silence up for sale, and the their biotech initiative taking shape, I wonder whether Pfizer is going to get serious and make their move soon.

Sunday, November 4, 2007

The Risk of Rushing RNAi Therapeutics into the Clinic

RNAi has always caught on very fast. It took only nine years for the Nobel Committee to recognize the importance of RNAi in medical biology and award The Prize for its discovery, and only 6 years following the discovery that siRNAs induce RNAi in mammalian cells by Tuschl to become an indispensable tool in the basic and applied studies of human gene function. Equally astounding is the fact that there are now close to 10 RNAi-based therapeutics that have entered the clinic since.

I have extensively described here before why I think RNAi has the potential to be the next great drug development engine, including the prospect of faster development timelines due to straight-forward mechanism of action and platform reproducibility. However, in the wake of Alnylam’s Q3 conference call announcing an insignificant delay in their RSV program, but a more open-ended delay in their liver programs, what I would like to do today is to point out the dangers of rushing RNAi Therapeutics into the clinic mainly borne out of the tension that exists between applying the best and safest science and satisfying investor demand for gushing clinical pipelines.

From the clinical perspective the ultimate danger is obvious: putting trial participants at risk, and disappointing patients’ expectations for a cure of their disease. From the perspective of running an early-stage biotech business that needs to raise money fairly regularly, the issues easily become more complicated. Although I admire the honesty and scientific intent that underlie statements like that by Nastech that one should not expect RNAi Therapeutics from your company until another 15 years, it certainly won’t capture the imagination of Wall Street. The easy way would be therefore to set your bar a little bit lower and signal to your potential investors that you deserve more money since you’ve been able to put so many drugs into the clinic in such a short period of time. A sophisticated biotech investor would know that these companies can be a good investment, although you do not necessarily want to stick it out until the Day of Reckoning comes.

The danger to the field of RNAi Therapeutics is therefore that as some of these rushed candidates come to a stage where they have to prove their safety and efficacy in large-scale clinical trials, a good number of them will fail, essentially because some of the Best Practices were not followed, including addressing cytokine induction issues, off-targeting profiles, RNAi delivery, and pre-clinical safety and efficacy studies that ideally include non-human primates.

Acuity Pharmaceuticals (now part of Opko Health) dazzled everybody when they came out of nowhere and can now claim to have been the first to put an RNAi candidate (for wet AMD) into the clinic. Unless they have changed the composition of their drug since study initiation, Cand5 appears to be an unmodified siRNA injected straight into the eye. This alone makes me wonder whether an optimized compound has been put into the clinic, and I have more confidence in a program run by Allergan and Sirna Therapeutics (Merck) targeting the same pathway for wet AMD, but with a modified siRNA formulation intended for slow release.

SiRNAs that induce cytokine responses may also have a number of additional biological properties, some of them even potentially beneficial for the disease at hand. Gunther Hartmann from Bonn, a scientist with a cytokine angle on oligonucleotide therapeutics, has even proposed at the recent OTS meeting to purposefully combine the immunostimulatory potential of RNAs (isRNA) with siRNA design. Cancer and infectious disease may be good areas to test this concept as isRNAs are thought to help the immune system in fighting related these diseases.

There has been similar discussion whether there would indeed be any harm if an RNAi therapeutic targeting the Hepatitis C Virus (HCV) had some concomitant interferon response. Isn’t interferon (and RNAi) nature’s first answer to viral infections and the mainstay of current HCV treatment regimens anyway? Similar arguments may also apply to RSV.

The fact that Alnylam is now focusing RSV-01 on adult populations makes me therefore wonder whether this was driven at least in part due to concern that the tender infant respiratory system may be more prone to overreact to a potentially immunogenic siRNA molecule than a lung hardened by years of air pollution. This siRNA is probably unmodified as it was this June that the first Alnylam compounds using ISIS modification patents moved into IND-enabling studies. Being unmodified from a pharmacokinetic perspective may not be that bad or even desirable in RSV, as RSV is an acute infection and long drug exposure may therefore have the potential to do more harm than good.

I should emphasise, however, that the early rodent RSV studies that form the basis of Alnylam’s RSV-01 and which have supposedly been replicated by the company, demonstrated sequence-specific antiviral activities. Furthermore, from Alnylam’s presentations one can assume that RSV-01 was carefully screened for cytokine induction in a number of human cell lines and animal models. I should add as well that the slight delay of the RSV experimental infection model studies is not the result of any of these considerations, but more simply reflects the fact that finding volunteers to be infected with a virus that gives you flu-like symptoms and requires you to be locked away from the outside world for a couple of weeks, is not that easy. However, 74 of the 88 subjects, I suppose mostly students, have already been recruited and we should hear top-line data early next year.

Alnylam’s conservative approach to drug development is further demonstrated by their delay of filing INDs for their liver programs, for hypercholesterolemia and liver cancer. While there is no doubt that with current systemic delivery capabilities it is possible to achieve potent gene knockdown in the liver, the safety and dose-response data so far would explain Alnylam’s caution into committing to a particular formulation by year-end as originally guided. Instead, I agree with their assessment that with new chemistries coming online, such as MIT’s lipidoids which formed the basis of the recent microRNA saturation data in Nature, it is wise to keep testing all of to find the formulations that offer the best therapeutic index. It would not be the first time that a drug for treating heart disease would fail in a large-scale trial because of unacceptable side-effects seen in a handful of participants. For what it’s worth and mindful of the business considerations about demonstrating human proof-of-concept of an RNAi Therapeutics with the hypercholesterolemia program, I wonder whether Alnylam should not go first with liver cancer anyway.

Needless to say, this cautious, data-driven approach not only benefits Alnylam the Science, but also Alnylam the Business. The importance of their scientific credibility through publications and conference presentations cannot be underestimated when it comes to their ability to execute on their business development goals, mainly in the form of lucrative license deals and access to enabling technologies. With a cash position of $468M, Alnylam is in a stronger position than ever to focus on the long-term success of the company and its shareholders.

Rosetta Genomics on Track to Bring the First Clinical RNAi-related Product to Market

Almost unnoticed in the microRNA diagnostics space, Rosetta Genomics reported this week that it had completed the pre-validation phase for its first microRNA diagnostic product scheduled to come into the clinic in the first half of next year. It would be exciting to see the first RNAi-related product have a direct clinical impact and, if successful, will fund Rosetta’s microRNA diagnostics and therapeutics programs with minimal shareholder dilution. The microRNA diagnostic is designed to differentiate between squamous and non-squamous lung cancer which is not always possible to tell under the microscope and an area of particular importance now that Genentech’s VEGF-targeting MAb Avastin showed life-threatening side-effects particularly in subjects with squamous cell cancer.

While RNAi Therapeutics has attracted most of the RNAi attention, microRNA-based diagnostics are set to become the first commercial success of RNAi-related products in the clinic. Their differential expression, scalability, and, equally important, potential relative stability advantages compared to protein and larger mRNA biomarkers means that microRNAs have the potential to become the biomarker platform of choice. The (near) future should tell.
By Dirk Haussecker. All rights reserved.

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