Wednesday, May 30, 2007

Alnylam CEO gives Corporate Update at BofA Healthcare Conference

In this blog I will summarise the highlights of the corporate update given today by John Maraganore, the CEO of Alnylam Pharmaceuticals, at the Banc of America Healthcare Conference in Las Vegas. Alnylam can be considered the leader in RNAi Therapeutics, and it is their success so far that has opened up the prospect for a whole new class of drugs based on RNAi. As such, Alnylam is proud to note that their work was cited by the Karolinska Institute in the justification for the recent Nobel Prize to Fire and Mello for their discovery of RNAi.

In his presentation, JM detailed the breadth of Alnylam’s clinical and pre-clinical programs encompassing all major therapeutic areas except for bacterial infection. There are more than 20 such programs ongoing at Alnylam, Alnylam partners, or licensees. Moreover, over 50% of current clinical RNAi programs and over 75% of siRNA reagent sales are covered by Alnylam IP. Besides scientific excellence, IP is a key issue for Alnylam’s financial ability to turn RNAi into drugs, and JM made it clear that Alnylam is the gatekeeper in the commercialisation of RNAi therapeutics: Alnylam has access to all the 8 key issued patents relating to RNAi Therapeutics, 7 of them on an exclusive basis. As a consequence, the company has already taken in over $120M in milestone payments and fees, not including the potentially more than 1 billion USD in future milestone payments.

As key business goals, JM cited continued progress on the science, particularly in delivery, moving along the clinical pipeline (for 2007: phase II for RSV, INDs for PCSK9 and pandemic flu; announcement of 2 more pre-clinical programs) and one or more significant alliances by year-end. What JM seemed to value most, however, is their plan to show human proof-of-concept data for an RNAi Therapeutic within the next 12-18 months. This could either come from their phase II RSV experimental infection studies, slated to start by the end of June, or early results from the PCSK9 hypercholesterolemia program. With regard to PCSK9 and possible competition from ISIS’ antisense compound targeting the same target, JM was very diplomatic in his response saying that he is encouraged by developments in the antisense arena, and the future will show what each technology platform can do therapeutically. Unlike ISIS and in spite of considerable outside interest, Alnylam would not have any immediate plans to partner PCSK9 which Alnylam is pursuing with the leading Brown-Goldstein labs at UT Southwestern.

Overall, a solid performance by JM and everything is appears to be on track.

Note: Alnylam dropped today another 4.5% to $15.49 amid heavy trading, despite an overall positive market. At this point, investors just have to be patient. Policies that make it clear that Alnylam is not for sale and saying certain programs are to stay within the company may not be popular in the short-term, but Alnylam is about building a real business, and is not an M&A project.

Monday, May 28, 2007

RNAi Therapeutics IP: On the Importance of Being Tuschl

A strong patent position is essential for companies to attract investments for the development of RNAi Therapeutics. Although the number of patents and patent applications surrounding RNAi Therapeutics continues to grow, arguably the two or three key early patents are 1) Fire and Mello describing the discovery and use of long double-stranded RNAs for inducing RNAi-mediated gene knockdown in worms and by extension other organisms, and 2) the Tuschl I and II patent series describing the identification of small 21-23nt small RNAs as the mediators of RNAi (Tuschl I) and the use and properties of synthetic siRNA duplexes for RNAi in human cells (Tuschl II).

While Fire and Mello has been granted in the US and can be licensed by almost anyone that wants it, there is much more controversy surrounding Tuschl I and II. It is undisputed that scientifically Tuschl’s studies describing the use of synthetic siRNAs for RNAi in mammalian cells is what opened up the prospect for RNAi to become the next platform for drug development. Tuschl II which is based on the work by Tuschl, Elbashir, and Lendeckel and owned by the Max-Planck Institute in Germany has been exclusively licensed to Alnylam Pharmaceuticals and has already been granted in the US and some other territories (Tuschl is a scientific co-founder of Alnylam). The patent application was provisionally filed in the US on March 30, 2001, and in Europe on December 1, 2000, and describes in great detail the anatomy of effective synthetic siRNAs.

Meanwhile, much of the work in Tuschl I is focussed on the identification of small RNAs as the mediators of RNAi based on the fact that isolated small RNAs derived from processed double-stranded RNAs in Drosophila cell extracts trigger specific gene knockdown and cleavage of a target message at 21-23nt intervals. Interestingly, most of that work does not mention the fact that these 21-23nt small RNAs should be double-stranded. This conclusion could not be derived from the observation of 21-23nt small RNAs on denaturing polyacrylamide gels, but was deduced through the cloning of these small RNAs which is described in Tuschl II, not I. It is therefore very surprising that, out of the blue, Tuschl I demonstrates the use of synthetic siRNAs with preferably 2-nucleotide overhangs for RNAi in mammalian cells. Subsequent claims then focus on the use of such siRNAs for human therapeutic development. This is rather surprising given that the basis for choosing 2-nucleotide synthetic siRNAs is lacking. It therefore appears as if this example had been appended later so as to make the patent more relevant for human therapeutic use. Otherwise, only fruit fly work, albeit important, would have been described. Given the near-identity of this last claim of Tuschl I with work described in Tuschl II, it is difficult to imagine how Tuschl I could be granted in full in the presence of Tuschl II.

Similarly intriguing is the fact that Tuschl I, which by the way has not issued yet, is co-owned by the Whitehead Institute for Biomedical Research in Cambridge, MA, the MIT, the University of Massachussetts, Worcester, and the Max-Planck Institute. At the same time, from the publication record it is clear that synthetic siRNAs were pioneered by Tuschl, Elbashir, and Lendeckel while at the Max-Planck Institute. Interestingly, the UMass has chosen to co-exlusively license their rights to the patent to Sirna Therapeutics (now a Merck subsidiary), CytRX (now RXi), in addition to Alnylam. Clearly, Merck and RXi would benefit most if Tuschl I would be granted eventually and somewhat limit the dominance that Alnylam currently enjoys in the RNAi patent space. Nevertheless, the fact that Tuschl I, filed on the very same December 1, 2000 date as Tuschl II in Europe, has not issued yet and the sudden appearance of synthetic siRNAs and their use in human cells at the very end of that patent application, raises questions about conflicting interests between the involved parties.

Based on publicly available information, the claims of the Tuschl patent series could therefore be divided as follows: Tuschl I getting credit for identifying 21-23nt small RNAs for mediating RNAi in fruit flies and by extension in other organisms, and Tuschl II for characterising effective siRNAs to be double-stranded with preferably 2-nucleotide 3’ overhangs and the ability of synthetic versions thereof to mediate RNAi in mammalian cells. In such a scenario Tuschl II would carry considerably more weight for the development of RNAi Therapeutics which would in turn reinforce Alnylam’s already leading IP position.

I am aware that parts of my interpretation are based on conjecture and criticisms are welcome (email: dirk_haussecker@yahoo.com). For those interested in the patents themselves, please visit

Tuschl I: http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=1&f=G&l=50&co1=AND&d=PG01&s1=tuschl.IN.&s2=zamore.IN.&OS=IN/tuschl+AND+IN/zamore&RS=IN/tuschl+AND+IN/zamore

Tuschl II: http://www.google.com/patents?id=BlV6AAAAEBAJ&dq=rna+sequence+specific+mediators+of+rna+interference

Saturday, May 26, 2007

MicroRNAs as Therapeutic Targets

MicroRNAs are another class of endogenous cellular small RNAs that like siRNA in RNAi down-regulate target genes. Unlike siRNAs in mammalian cells, these mostly recognise their targets by incomplete base-pair complementarity. Consequently, each of the maybe 1000 microRNAs in humans has the potential to regulate a large number of target genes, with some estimates pegging that number upwards of 100. Together, these microRNAs regulate genes involved in almost all aspects of a cell’s life and some of them have been found to be involved in the pathogenesis of many diseases such as cancer and neurodegenerative conditions. It is therefore hoped that the targeting of microRNAs by antisense techniques or their over-expression in the form of siRNA-based microRNA mimics can be exploited for therapeutic purposes.

When the underlying cause or contributing factor (e.g. viral microRNAs) for a disease is a microRNA, then targeting it should stand a good chance in being an effective treatment as long as loss-of-function of that microRNA in the target cells does not have other undesirable side-effects. It appears to be, however, much more complicated when the idea is to target a microRNA as the regulator of a complex phenotype. One example of this approach is targeting microRNA-122, a highly expressed microRNA in the liver, for treating hypercholesterolemia. Down-regulation of this microRNA has been achieved in the liver in rodents and was shown to result in lower cholesterol levels. It needs to be questioned, however, if this approach is viable for chronic treatment given the importance of microRNAs in general for cell viability and the fact that microRNA-122 in particular makes up about 70% of liver microRNAs. It is interesting to note that targeting microRNAs as modulators of complex phenotypes versus RNAi Therapeutics approaches are derived from quite contrary drug development philosophies. The one philosophy (RNAi Therapeutics) holds that the best treatment with the least side-effect focuses on as few causative genes as possible. The other philosophy, however, proposes that single-gene targeting will only be successful in few instances and the best drugs are those that affect multiple targets. As such many of the small molecule inhibitors on the market today are now known to be actually much less specific than intended and their off-target effects contribute to the therapeutic outcome.

Four investing purposes, four companies that stand to benefit from the development of microRNA-based therapeutics come to mind: Alnylam (ticker: Alny), ISIS (ticker: Isis), Rosetta Genomics (ticker: Rosg), and Asuragen (privately held). Although many more microRNAs exist, Alnylam’s co-founder Tuschl identified the first 120 microRNAs in humans, and these are therefore likely to be amongst the most important in human biology. Alnylam partnered these microRNAs with ISIS Pharmaceuticals which owns many of the fundamental antisense patents required for the targeting of microRNAs. In addition to developing similar microRNA-based therapeutics, Rosetta and Asuragen (a privately-held company that was spun off from Ambion when it was acquired by ABI) are two companies that both expect to generate early revenues through the development of microRNA-based diagnostics, e.g. for the classification of cancers. In addition to their own discovered and characterised microRNAs, they will therefore have to pursue a prudent licensing policy to secure their freedom to operate.

While it is already obvious that microRNAs are extremely important for human gene regulation, much more work remains to be done to confidently identify suitable targets. Fortunately, much of this work is already being undertaken due to the immense interest in microRNAs in biology. In the meantime, let-7 in cancer and microRNA-122 for the treatment of HCV and hypercholesterolemia may lead the way in showing the promise of microRNA-based therapeutics.

Wednesday, May 23, 2007

RNAi-related Phenomena and their Relevance for RNAi Therapeutics

Following the discovery of small RNAs as part of RNAi and a growing range of other classes of small RNAs, it soon became clear that RNAi is just one part of a network of small RNA-directed cellular processes. MicroRNAs which are involved in a wide range of post-transcriptional gene regulatory processes are probably best known, but small RNAs have also been found to play roles from chromatin silencing to chromosome rearrangement. The existence and importance of these functions can vary greatly between different organisms. Nevertheless within a given organisms these functions are interconnected by partly making use of overlapping sets of proteins or proteins from the same gene families.

One concern in the development of RNAi Therapeutics for human use would therefore be that small RNAs may engage unwanted small RNA-directed processes. In humans, the microRNA pathway and RNAi-related chromatin silencing are probably the main concerns. The microRNA pathway is actually the main reason for off-targeting in RNAi experiments, and I have outlined potential strategies about how to selectively engage RNAi and not the microRNA pathway in earlier posts. Silencing chromatin through the introduction of small RNAs in human cells, however, is much more controversial. Even if we assume that this pathway does exist, then according to published papers you would probably need more than one small RNA targeting the same gene. Moreover, one would likely have to introduce small RNAs targeted to the promoter region and not the transcribed gene as siRNAs do in RNAi. A possibly related interesting phenomena that was reported recently is RNA activation, or RNAa. In these examples small RNAs targeted to certain promoters actually upregulated gene activity. It is clear, however, that not any small RNA will have this effect, and again siRNAs targeted towards the transcribed genes are not likely to result in promoter activation.

Alone from the fact that there are 4 Argonaute genes and additional related Piwi genes, and new classes of small RNAs being discovered on almost a monthly basis, one can expect the RNAi-related universe to expand ever more. However, largely based on microarray studies, it seems that exogenous small RNAs almost exclusively engage the RNAi machinery and the related microRNA pathway. It is therefore a focus on the microRNA pathway that is most likely to ultimately improve the specificity of RNAi Therapeutics.

Monday, May 21, 2007

Promising Cancer RNAi Therapeutics Study Published in Cancer Research

Due to the relative ease of delivering RNAi effector molecules to the eye, lung, skin, and liver, it is expected that RNAi-based therapies for these organs will be the first to successfully navigate their way through the clinical trial maze. Nevertheless, a considerable amount of the early development efforts of RNAi Therapeutics is spent on cancer. I do not think that I need to remind anybody here about the need for more and better cancer therapeutics, but RNAi in particular offers the potential to greatly benefit cancer care. Delivery, however, represents a major obstacle for the development of cancer RNAi Therapeutics. This is even more so when faced with metastases which emphasises the need to find systemic RNAi delivery solutions to reach disseminated cancer cells throughout the body.

I was therefore very encouraged on reading a study published by Pirollo and colleagues from the Lombardi Comprehensive Cancer Center at Georgetown University Medical Center. In a Priority Report in the reputable journal Cancer Research (Cancer Res. 2007: 67 (7)), they report the development of a novel siRNA delivery system made up of nano-sized liposomes that harbour effector siRNAs and antibodies directed against the transferrin receptor. Transferrin receptors are known to be overexpressed on tumour cells and targeting them emerges as a promising strategy for cancer RNAi Therapeutics (Note: Calando, a subsidiary of Arrowhead Research, uses a similar approach in their first clinical RNAi cancer program). Consequently, the authors could show through imaging and nucleic acid detection techniques that accordingly formulated siRNAs were specifically enriched in the tumours of mouse models. The siRNA itself targets HER-2, a gene known to play a role in the survival of cancer cells. Although the siRNA in isolation already exhibited antiproliferative effects in tissue culture and the living animal, the most impressive data was that it could greatly sensitise cancer cells to the commonly used chemotherapeutic agent gemcitabine at low mg/kg doses. In addition to a dramatic reduction in tumour growth, the mice continued to gain weight and generally looked healthy. This study therefore shows the promise of using siRNAs in combination with chemotherapeutic agents, allowing for treatment regimens that are both more efficacious in addition to reducing debilitating side-effects.

Behind the success of these studies were 2 small tricks applied to the basic concept of nano-immunoliposomally formulated siRNAs. One was the addition of a pH-sensitive
peptide. This significantly enhanced cellular siRNA delivery, possibly by facilitating endosomal release of the siRNA cargo. The other trick was the modification of the siRNA, in which the non-targeting strand of the blunt-ended “siRNA” was greatly modified. This suggests that the systematic modification of basic siRNAs can be considerably advantageous and may yield even better siRNAs in the future.

Let us hope that other laboratories will find this immunoliposome technology equally promising so that it will eventually be tested in clinical trials.

Saturday, May 19, 2007

Journal Club: eIF6 is Part of the Translational Repressor Complex, but not Minimal Human RiSC- Implications for Therapeutic RNAi

This week, the journal Nature published a study by the Shiekhattar group online investigating the molecular identity of the microRNA-mediated translational repressor complex. This is important for RNAi Therapeutics since it is still unclear whether the microRNA complex is distinct from the RNAi effector complex in humans. MicroRNAs mediate gene silencing by translational repression via 7-8nt base-pair complementarity to the target gene mostly in the 3’ UTR of gene transcripts, whereas siRNAs knockdown genes with much larger complementarity by instructing their specific cleavage and destruction. It is thought that the microRNA pathway is largely responsible for so-called off-targeting effects in RNAi experiments given their less stringent base-pairing requirements. A better molecular understanding of what constitutes the microRNA translational repressor complex versus the RNAi mRNA destruction complex should lead the way in identifying strategies to specifically harness the RNAi pathway, thus minimising off-targeting and therefore unpredicted side-effects in the clinical setting.

By performing co-immunoprecipitation experiments with a protein known to be involved in siRNA-guided gene silencing, Chendrimada and colleagues identified another complex containing this protein that was distinct from the one mediating siRNA-guided mRNA cleavage. One of the factors found was eIF6 which is known to be a component of the 60S large ribosomal particle and to prevent the association of 60S with 40S to constitute the active translation complex. The authors then go on to show that by inhibiting the activity of eIF6 (using siRNAs), microRNA-mediated translational inhibition was abrogated. Since eIF6 is not required for siRNA-guided cleavage in vitro, this suggests that the microRNA repressor complex is distinct from the RNAi machinery. It would have been nice, however, to test whether following the inhibition of eIF6, RNAi activity was left intact as would be predicted in such a model. Similarly, it would have been interesting to test whether eIF6 depletion would have abolished microRNA-mediated translational repression in an in vitro system similar to the one used for the identification of the RNAi minimal RiSC.

While this study leaves some of these questions unanswered, it is an excellent demonstration that through a more thorough understanding of how microRNAs and siRNAs effect gene silencing, it should be possible to further increase the specificity of RNAi, a feature already considered to be one of the strengths of this technology. The ultimate goal would be to design siRNAs that cannot be used by the microRNA repressor complex without compromising RNAi activity. It is noteworthy that Dharmacon scientists have demonstrated that through the introduction of a simple modification in the siRNA, microRNA effects can be reduced by 5-10 fold while leaving siRNA activity intact. It is exciting to see how clever experimentation in many labs is gradually breaking down the barriers towards the safe and widespread application of RNAi Therapeutics.

Thursday, May 17, 2007

A Framework for Progressing the Delivery of RNAi Therapeutics

The delivery of RNAi to the desired target organ is perceived by many to be the main hurdle before RNAi Therapeutics can have a universal impact on treating diseases. Arguably today already, it probably is possible to treat dozens of diseases for the eye and lung alone with current siRNA delivery methods. Furthermore, it is possible to efficiently knock down genes in the liver of primates, either with siRNAs formulations or viral gene therapy vectors. This is because the liver is the first pass organ for most drugs and highly vascularised thereby facilitating drug uptake.

The liver, however, demonstrates already some of the challenges we are facing. In the case of viral vectors, immunogenicity issues need to be addressed to make sure that immune responses against the vector will not abolish long-term gene knockdown. This is being addressed with efforts such as identifying novel serotypes or modifying pre-exising ones such as in the AAV field, but any of these solutions have yet to undergo testing in humans. For non-viral siRNA delivery, the main challenge at the moment is to get highly efficient gene knockdown without causing liver damage. It should be noted that limited liver damage is associated with a number of drugs on the market, however the degree of the damage needs to be tightly monitored. Needless to say, as with any drug, there is always a risk-benefit to consider. Alnylam published last year a study in Nature in which they show highly potent gene knockdown in primate liver. That in itself is a major achievement as only 2 years ago systemic delivery in humans was thought to be far on the horizon, and now it may happen much sooner. However, it was reported in the same study that there was a dose-dependent elevation of liver enzymes associated with the liposomally delivered siRNAs, in some cases quite high. Having established effective gene knockdown in primate liver, I would now expect the teams at Alnylam, Tekmira, Protiva, and Merck/Sirna to work on modifications of the liposomal delivery strategy that marries efficacy with little to no delivery-related side-effects

Beyond the liver, the reticuloendothelial system, kidney, intestines, and cancer, are probably next on the list of organs being targeted by systemic delivery. I expect more varied approaches to be taken to reach these organs, especially the use of targeting strategies such as adding cell-type specific targeting agents such as antibodies, peptides, or RNA-aptamers to a core delivery vehicle. This is an area where I see innovation particularly coming from the academic arena due to their freedom to explore. As a corporate strategy, however, I would be cautious in moving poorly characterised delivery strategies into the clinic, and put emphasis on further understanding and optimising promising technologies that exist today, such as the lipid-based technologies mentioned above. With scientists and funders working on all these fronts, it should be possible to gradually widen the scope for RNAi Therapeutics in a well-managed manner. From a commercial perspective, there are enough targets around now to focus on for the credible players in the field. I should add, however, that for orphan diseases or terminal diseases, more innovative strategies should definitely be considered for the clinic today.

Finally, I would like to appeal to all those involved in legal proceedings about who owns certain IPs in the delivery area. Please stop and realise that this is not helping anybody here, except of course for certain lawyers. It should be possible to set aside bruised egos and reach agreements with which everybody can live with that contributed to the development of a promising technology such as the liposomal delivery of siRNAs to mention just one example. Challenges such as liver toxicities associated with some of the liposomal vehicles are best solved when the scientists that co-developed and understand it best have access to.

Monday, May 14, 2007

What’s the Problem with DNA-directed RNAi?

I apologise for having been somewhat quiet recently on the blog. It is not that I lost my belief in RNAi Therapeutics, quite the opposite actually. RNAi has already been shown in hundreds of research labs to be a gift of biology (or God, as one famous biologist, whom I shall leave here anonymous, once noted), and it is now up to many of us individuals and organisations to carefully uncover its therapeutic potential.

One area where progress has been slow is DNA-directed RNAi (ddRNAi). Except for Nucleonics’ Hepatitis B Virus RNAi program, all other clinical studies currently make use of synthetic small interfering RNAs (siRNAs) for therapeutic gene knockdown. While I agree that siRNAs have many advantages over ddRNAi for many applications applications, ddRNAi may be in principle superior to siRNAs e.g. where durable gene knockdown is desirable or where viral delivery methods may get to more efficiently than formulated siRNAs. One can agree that it is an interesting concept to immunise the immune system against HIV by giving the patient stem cells that generate T-cells expressing shRNAs directed against HIV (actually such a trial is imminent at the City of Hope). Why has progress been so slow? ddRNAi-based companies have had great difficulties in attracting funding. Benitec, arguably one of the early contenders to be the darling of ddRNAi, eventually ran out of money, had to cut down most of their development programs and went back to Australia to wait for something good to happen. Instead of focusing on research and investor relations, money was spent on lawyers in early patent battles about rights to ddRNAi. It is interesting that while patent issues are being talked about in the siRNA space, full-blown legal battles about the core siRNA patents have been the exception. It is expected that these will be sorted out at later stages through cross-licensing and royalty agreements, closer to the approval of the first siRNA-based drugs. Makes sense. Another problem is that ddRNAi carries the stigma of being a traditional gene therapy with all the historical ballast of immunogenicity and cancer through insertional mutagenesis.

So how could ddRNAi stage a comeback? One way might be to consolidate the IP in one company and remodel it as a champion of ddRNAi, similar to what Alnylam is for siRNA Therapeutics. This would make investors feel confident that their company has the freedom to operate and attract funding and clinical support through collaborations. This also requires credible management that has access to key decision makers in big biopharmaceutical companies. Failure to do so would not only put the technology at risk of ever being fully developed, but also rob patients of important treatment options.

Thursday, May 10, 2007

Alnylam Drops Almost 10% Following Quarterlies- A Lesson in Biotech Investment

Today, Alnylam Pharmaceutical’s stock got hammered following the release of their quarterly reports after the markets closed yesterday, with shares falling almost 10% to close at $17.56. Essentially, the report was in line with expectations and confirmed that research projects are moving forward as expected or even ahead of time, but it did not disclose a new collaboration with a strong development partner from Big Pharma or Biotech. The lack of such an announcement, which is expected by many to come “sooner rather than later”, curiously was the cause for the fall in the share price which was further fuelled by a weak overall market. Also, it is likely that market players that were “short” Alnylam before the report reduced their short position shortly before the report thus artificially “inflating” the stock yesterday to hedge for any partnership announcement. However, after this did not happen they may have decided to put renewed pressure on the stock.

Does this large drop in the share price of the leading RNAi company mean that RNAi does not work any more? Does RNAi hold no commercial value? Although this suggestion is absurd, investors that are not familiar with the technology and are seeing their investment dwindle will get their bouts of doubt and fearing further share price declines sell their shares at the worst possible time. For a biotech investment to be profitable, however, especially when investing in “unproven” technologies, it pays to do your due diligence first before buying in, make sure you are comfortable with the technology, and then set yourself targets to determine whether progress of the company/technology is in line with your expectations. Keep in mind, “unproven” technologies generating losses due to expensive research and development may be seen by some Wall Street analysts as having little to no economic value according to outdated valuation methods, and if those sentiments prevail in the market it can cause share prices to be “undervalued” until real economic profits are generated. Unfortunately, this can hurt small companies that need to raise more money to support their R&D and actually increase their investment risk in a vicious feedback loop. I should add that given this situation, this blog is a small contribution towards helping the development of RNAi Therapeutics getting the proper support it deserves by educating about its biological and potential therapeutic value.

Coming back to Alnylam- it is a special case. Only rarely in the history of truly promising biotechnologies has there been such a prominent gate-keeper in terms of IP and concentration of talent. It is also fortunate that with more than $200M in cash they have a multi-year runway ahead of them and do not have to worry too much about days like these. For the biotech novice, I would therefore recommend taking a small stake in a company like this and let it mature for at least 5-10 years. For those more confident in their biotech stock picking ability, this may be an opportunity to add a little bit more RNAi to your portfolio.

For those interested in the report, visit http://biz.yahoo.com/bw/070509/20070509006170.html?.v=1

Wednesday, May 9, 2007

ISIS Copies Alnylam’s Heart Disease Strategy

Today, ISIS Pharmaceuticals, a company developing antisense therapeutics, announced a collaborative deal with Bristol-Myers Squibb to target PCSK9 for the treatment of hypercholesterolemia. As dicussed in my May 6 post, this is the same gene targeted by the RNAi Therapeutics company Alnylam. Since both antisense and RNAi are nucleic acid-based methods for down-regulating gene expression, I will use today’s news to contrast the two technologies.

Both technologies use short nucleic acids designed to seek out their complementary RNA targets and thereby down-regulate corresponding gene expression. Antisense typically comes in two flavours. One is to target a certain region in the complementary mRNA that should inhibit its translation into protein without destroying the RNA target, the other is to use DNA-based antisense molecules that when paired to their target RNA will trigger RNaseH in the cell to degrade the RNA. Although the latter method takes advantage of an enzyme, the natural function of this enzyme is thought to be mainly involved in facilitating DNA synthesis, and therefore neither of the two strategies takes advantage of an existing gene repression mechanism. By contrast, RNAi makes use of such a pre-existing gene repression mechanism that is catalytic and therefore theoretically more efficient. Accordingly, antibodies and recombinant proteins have demonstrated the power of harnessing biological pathways for therapeutic purposes. In the case of RNAi, this is borne out by the finding that in tissue culture and in vivo, the amount of nucleic acid needed to efficiently knock down a gene is significantly less and gene knockdown generally more specific and predictable for siRNAs compared to antisense molecules. This is important as lower doses and higher specificity should reduce side-effect risk. Furthermore, for certain applications it may be desirable to use DNA directed RNAi induction methods, which is not a viable option for antisense.

But one of the main reasons why I am so excited about RNAi Therapeutics is because of the immense interest in the scientific community to understand and leverage the endogenous functions of RNAi. This not only attracts some of the scientific minds to solve potential bottlenecks, but also public recognition and consequently financial support. The Nobel Prize last year has certainly helped, and it is therefore gratifying to see the governor of Massachussetts announce yesterday a plan to support the biotechnologies in that state, specifically mentioning RNAi Therapeutics as one of the focus areas. Antisense, however, has had a long history of failures which has affected investor confidence and hurt its development. Interestingly, however, a number of issues that led to these failures like medicinal chemistry, delivery, and target selection are quite similar for the development of RNAi Therapeutics, and it is fortunate that RNAi can take advantage of lessons learned in the antisense field. It is therefore maybe not surprising that Alnylam and ISIS have extensively cross-licensed their IP, and given the size of the heart disease market, both drugs should ultimately be able to co-exist on the market. My bet, however, is on RNAi.

Tuesday, May 8, 2007

Do RNAi Therapeutics have a Future?

Much is said about the unsustainable nature of the healthcare system particularly in the US, but also other developed countries. While a lot of the waste is due to expensive hospital stays, the practice of defensive medicines etc., the increasing costs of drugs is a factor nevertheless. Biologicals, therapeutics based on naturally occurring molecules and the bread and butter of the biotech industry, certainly contribute to that image. Although often an excellent treatment option, it is not uncommon to see annual drug costs in the range of $10,000-$100,000. It is therefore important to ask about the position of RNAi Therapeutics in this discussion.

Most RNAi Therapeutics would consist of the active siRNA (or DNA vector) and the delivery vehicle. While RNA synthesis is not dirt cheap at the moment, it is expected that as costs continue to come down they will eventually fall between the cost of small molecules and protein-based therapeutics on a logarithmic scale. Consequently, the comparison with more traditional biologics finds here in favour of RNAi Therapeutics. The unknown, however, is the delivery portion of the drug. Their cost can range from the insignificant, e.g. the conjugation of a simple cholesterol moiety to one end of the siRNA to conjugating the siRNA to a protein ligand recognising a cell-surface receptor. While both strategies are likely to be pursued by drug companies, I could imagine that if societal pressures demanded, a number of siRNA applications could be adjusted to cheaper delivery options.

The true cost of biologics and drugs in general, however, is not the cost of synthesising them, but their development. With the cost of developing a drug averaging more than 1 billion US dollars, drug companies have to charge a certain premium if they want to continue developing innovative and better drugs. Nevertheless, some politicians are busy promoting so called biogenerics which are supposedly equivalent to the original biologic, but can be sold for much cheaper because large-scale clinical trials and testing would not be needed for their approval. Personally, I find this view cynical, given that for a long time biotechnology as a business model was not profitable, and as the first success stories emerge, innovation is being put at risk for political gain. This is in addition to the fact that even scientifically biogenerics are not as trivial as is sometimes suggested. I digress…

Importantly, while RNAi as a lab technique is already helping to cut down development costs, by virtue of being able to select the best biological targets and the speed with which it is possible to identify an active siRNA for a given target RNAi Therapeutics should be cheaper to develop. Most of the $1 billion actually accounts for the many development candidates that never make it to the market, and by cutting down that number, drug costs have the potential to come down considerably. The speed of development that RNAi Therapeutics allow is demonstrated by the fact that only 5 ½ years after we even knew that RNAi works in humans, a few RNAi-based drugs are already in late phase I and II stages of clinical trials.

I also expect RNAi Therapeutics to fit in well as we move towards the increased adoption of evidence-based medicine where the benefit of a treatment has to be measurable. This is because the selection of the RNAi gene targets in the research phase will be based on measurable phenotypes that are then followed during the clinical trial stages. This should also help treatment outcomes, and this is where the real social and economic savings are to be found.

Monday, May 7, 2007

In Focus: Alnylam Establishes RSV Experimental Infection Model

Only one week following the announcement by Nucleonics of its intention to start HBV RNAi phase I studies, Alnylam presented further pipeline progress from their phase I Respiratory Syncytial Virus (RSV) RNAi program. As more and more programs reach the clinical stages, expect to hear about clinical progress of RNAi Therapeutics with increased frequency.

Alnylam and their collaborators from the University of Tennessee and Meridian Life Science derived a non-pathogenic RSV strain in high enough amounts so that it could be used to experimentally infect healthy adult volunteers. They showed that infection could be achieved in 72% of the subjects with incubation times and duration of infection that should allow the investigators to test the antiviral activity of ALN-RSV01. Drop-out rates were excellent with 35 of the 36 volunteers completing the study and no major adverse event reported. The company consequently announced that it would begin phase II experimental challenge studies this quarter.

The experimental infection studies are part of a wider well designed and innovative development program that places emphasis on feasibility in the early, therefore less expensive stages. Importantly, today’s results show that RSV infection can be quantified reliably across a number of platforms. This offers the prospect of obtaining statistically significant efficacy data already by the end of this year. The results from the planned phase II studies will be watched closely by the whole field as they would represent first human proof-of-concept of an RNAi Therapeutic. For those interested in investing in this area, expect such data to be a major value driver for Alnylam’s share price and beyond.

Ultimately, however, ALN-RSV01 will have to show safety and efficacy in the lower respiratory tracts of RSV infected infants. While the soon to be started experimental challenge studies will test an siRNA formulation nasal spray in the nose/upper respiratory tract, aerosolised siRNAs will have to be used later. In addition to mastering delivery, one problem particularly relevant in the treatment of RNA viral infections is the emergence of escape mutants. It is of note therefore, that although ALN-RSV01 was highly effective in reducing viral titers in tissue culture, knockdown efficiency was not compromised following repeat administration of the siRNA and no mutation around the siRNA target site was found.

Sunday, May 6, 2007

Preventing Heart Disease with RNAi Therapeutics

High blood cholesterol, a major risk factor for heart disease, already is an enormous public health problem that is likely to worsen given current lifestyle and demographic trends. Fittingly, statins, a class of small molecules that inhibit cholesterol synthesis and therefore have a wide range of effects that together lower the risk of developing heart disease, are probably the best-selling drugs on the market today. However, many patients still do not achieve their cholesterol goals and there is significant demand for new innovative treatment options.

An RNAi Therapeutic alternative, due to the ability to target almost any gene, is particularly interesting because of well validated targets, but which have proven refractory to targeting by the existing drug classes. These genes are not directly involved in cholesterol synthesis and targeting them should be synergistic with statins. Currently the most interesting gene targets are ApoB100 and PCSK9. ApoB100 is the sole protein component of “bad” LDL cholesterol and is produced in the liver. Notably, targeting ApoB100 by RNAi in the using cholesterol-conjugated siRNAs in 2004 by Alnylam scientists was also the first demonstration of gene silencing following systemic administration of siRNAs. This study not only showed considerable reductions of ApoB mRNA and protein, but also the hoped for decrease in blood LDL cholesterol. I should add that clinical data from phase I and II trials conducted by ISIS Pharmaceuticals using antisense oligo technology further document the promise of ApoB100 as a target for hypercholesterolemia. It will be interesting to follow their further clinical progress, but I expect siRNAs to do even better, because of increased specificity and potency thus allowing for lower amounts of nucleic acids to be administered.

Two years later after the demonstration of systemic RNAi in mice, Alnylam scientists then reported even enhanced ApoB-100 silencing and improved lipid profiles in monkeys, this time using liposomal formulations originally developed by Protiva Biotherapeutics. These and similar liposomal formulations have proven to be very efficient for liver gene knockdown in general and are now being pursued by a number of companies in preparations for the first systemic RNAi clinical trials. Unfortunately, however, their promise has also led to legal haggling as to who owns the IP behind this delivery technology. Companies involved in this dispute involve Protiva, Inex Pharmaceuticals, and Sirna Therapeutics/Merck and I hope that legal issues will not do further damage to the development of this promising delivery technology. No matter who owns the commercial rights to the technology, Protiva scientists have to be credited with this major achievement.

Interestingly, despite their publication record on ApoB100, Alnylam decided to target PCSK9 for the treatment of hypercholesterolemia. Although I cannot exclude that this move is partly due to a deal with one of their collaborators in siRNA delivery, PCSK9 has a lot riding for it. In fact, they are pursuing this program in collaboration with scientists from UT Southwestern Medical Center that arguably are world-leading in the genetics of hypercholesterolemia. PCSK9 itself is a protease that degrades LDL-receptors (LDL-R). LDL uptake by the liver is important for clearing LDL in circulation and it is expected that increasing LDL-R levels by suppressing their inhibitors should lower LDL cholesterol. Indeed, data presented at this year’s Keystone Meeting support this thesis. However, it should be kept in mind that many drug development projects fail, not because the drug fails to reach its target, but because of side-effects. Side-effects are a particularly important consideration for drugs that have to be taken chronically as is often the case for hypercholesterolemia. So one of the major questions here is whether long-term downregulation of PCSK9 can have adverse consequences. Here, the genetics of PCSK9 are compelling: Naturally occurring mutations in the human population that increase PCSK9 activity have been shown to increase LDL and lead to hypercholesterolemia, while those that inactivate it lower LDL dramatically- without any obvious detrimental consequences! Of course, compensation mechanisms cannot be excluded, but this is probably as good as you can get with choosing a target based on human genetics.

In summary, due to the availability of excellent “non-druggable” targets and the ability to knockdown genes in the liver with current delivery technologies, RNAi Therapeutics are a promising strategy for treating hypercholesterolemia. Alnylam is expected to initiate phase I studies in the second half of this year, and I would not be surprised to see further studies being initiated in the near future by Protiva or Inex (mere speculation here though). The major obstacle for these trials that I see are side-effects due to the liposomal formulations, and my advice would be to carefully characterise them in animal models before committing to phase I instead of simply bowing to investor expectations.

Friday, May 4, 2007

RNAi and Bird Flu

Every year labs around the world are racing to get vaccines ready for next year’s flu season. Even if the logistical nightmare can be managed and complicated vaccines are manufactured in time, this is no guarantee that the vaccine protects against the actual flu strain that season. This is because even as we observe the new strains emerging from East Asia, once it has reached our shores, the virus is likely to have changed his outer surface making it more difficult to be recognised by the immune system. That’s what viruses have learned to do anyway. If seasonal flu is challenging enough to predict, then developing a vaccine for a pandemic flu strain that had been generated by considerable genetic drift, is a daunting task.

Here, using RNAi, and in principle other nucleic-acid based therapies for that matter, offers a number of considerable advantages. Significantly, rather than going after a moving target, RNAi allows us to aim at flu genes that are not as mutable given the structural constraints of their encoded proteins for viral replication. This means that even if a re-assorted bird flu might look quite different on the surface, many parts inside of the virus will look very similar between even divergent flu strains. These conserved parts, or better their underlying RNAs, can be computationally predicted, and it is then very straightforward to design small interfering RNAs (siRNAs) against these RNAs well before we even know that there will be a bird flu pandemic. This can be done with high statistical confidence.

Of course, this strategy is not only applicable to bird flu, but any other emerging viral threat. A number of high-quality scientific papers have been presented documenting the feasibility of this approach. Intradigm e.g. has shown in 2005 in a timely manner that siRNAs could protect monkeys from severe lung damage due to SARS. Research teams from Nastech and Alnylam have similarly documented the potential of RNAi for flu in animal models. The US government is funding much of the research and may eventually decide to stockpile siRNAs for pandemic bird flu. Concomitantly, manufacturing capabilities are also being developed.

It is further encouraging that the lung which has been exploited for eons by viruses to infect the host now emerges as a good organ for drug delivery. Specifically in the case of RNAi, it came as a rather pleasant surprise that even unformulated siRNAs could readily get into lung cells and silence their target genes. RNAi therefore not only holds promise as a rapid response to viruses, but also other diseases of the airways such as asthma and COPD. As I write, many of these conditions are the subject of pre-clinical RNAi programs and one program by Alnylam for RSV (respiratory syncytial virus) has already reached the clinic. Data from their viral challenge studies in the second half of this year are widely anticipated, and if successful, would present the first proof-of-concept for a human RNAi Therapeutic.

Thursday, May 3, 2007

The RNAi Patent Landscape

Patents are essential for drug development as they protect the significant investments that have to be made in order to obtain marketing approval from the relevant regulatory agencies. Common estimates put the cost of successfully developing a drug at around $1 billion. A whole technology platform such as RNAi would suffer and be unable to attract sufficient funding if the scientific discoverers and institutions failed to file patents and license them to organisations capable of taking RNAi to the clinic. Luckily, fundamental patents have been filed and have been either exclusively or non-exclusively licensed. What are they?

According to folklore, Fire and Mello, the discoverers of RNAi in worms, had to be “encouraged” by the NIH to spend the time to file a patent for RNAi. This resulted in the Fire and Mello patents that can be non-exclusively licensed by almost whoever wants to for a nominal fee. While their science was impeccable, commercially their patents suffer from the fact that originally the dsRNA inducer length was defined as 25bp and above. Additionally, even if efforts to bring this size down to the relevant 21 and upward size succeed, this will not give licensees automatically the freedom to operate as it does not claim the use as a therapeutic. For this, the Tuschl patent series are essential. These are based on Tuschl’s seminal and non-obvious discovery that small double-stranded RNAs (siRNAs) of 19-23 base-pair length are the mediators of RNAi gene silencing. It appears that Alnylam, of which Tuschl is a co-founder, can claim rights to most of the claims in the series, although the Tuschl I series can be claimed by Alnylam, Sirna Therapeutics (now a Merck subsidiary), and CytRX alike. This is because one of the four academic institutions involved in the licensing of Tuschl I decided to go it alone and license it to CytRX and and Sirna in addition to Alnylam. It seems strange to me that one institution alone can do this without the apparent support of the other parties, but I will leave this to the lawyers. The Kreutzer-Limmer patents, covering double-stranded RNAs for the purpose of gene inhibition, may also turn out to be an important piece of the puzzle and were acquired early on by Alnylam through its acquisition of Ribopharma AG.

There are a number of other pending and granted patents in the RNAi field, including siRNA manufacturing and modification patents that will be important in the actual drug development process. However, I view them as secondary albeit important and meritorious patents when measured on an innovation scale. Efforts are also being made to circumvent the need for prototype siRNAs by using either their biological precursors or even variants such as blunt-ended small double-stranded RNAs (apparently it works!), however their exact merit remains to be evaluated. In this context, I am encouraged by recent Supreme Court decisions that emphasise the importance of innovation and non-obviousness in a patent.

Note: The discussion did not cover DNA-directed RNAi that do not involve synthetic siRNAs.

Wednesday, May 2, 2007

In Focus: FDA allows Nucleonics to start phase I trial for HBV RNAi

Today, privately held Nucleonics announced it has received permission from the FDA to start phase I clinical trials using RNAi for the treatment of Hepatitis B Virus. I will take this as an opportunity to highlight potential merits and disadvantages of that particular program, introducing some general terms along the way.

Unless most other companies that develop RNAi therapies using synthetic small interfering RNAs (siRNAs), Nucleonics employs DNA-based vectors that direct the expression of so called hairpin RNAs that are then further processed by the endogenous RNAi machinery into small RNAs that are functionally identical to the synthetic siRNAs. This approach, also known as DNA-directed RNAi (ddRNAi), may be advantageous in that it potentially allows for a longer treatment effect due to the potentially longer activity of a DNA vector. RNA, by contrast, is a more short-lived molecule. In the case of Nucleonics, the "naked" DNA is delivered to the liver formulated with cationic lipids. Since hairpins are very short in gene-terms, a plasmid may harbor multiple hairpins and Nucleonics' has 4 of them. As each hairpin targets a different RNA of HBV, the multipronged approach should help minimise drug-resistance which is often seen with viral therapies based on inhibiting a single target. Indeed, other RNAi companies are likely to pursue similar multi-target approaches in their viral programs, Alnylam's flu pre-clinical program being one example.

So far the theory looks promising. However, I have a number of concerns with Nucleonics' program (these were also recently highlighted during a pre-IND meeting with an FDA advisory panel). The major problem is that the company did not have convincing data about in vivo efficacy in animals. They argued that this is due to a lack of appropriate pre-clinical animal models, but I would argue that those, e.g. mice that carry HBV in their genome, exist and should have been used for this purpose. Efficacy studies were consequently limited to tissue culture experiments and in a co-transfection "in vivo" model which really is nothing more than a glorified in vitro system. This means that although HBV silencing in such a model may approach 100%, this is simply because the HBV and ddRNAi vectors tend to go into the same cells during co-transfection. It appeared from their data, however, that only a small fraction of the liver cells received the ddRNAi (and HBV) plasmid, unlikely to be enough to have a therapeutic impact in a patient that carries HBV in a much larger and non-overlapping fraction of cells in the liver. It is likely that this is because in order to be active the DNA needs not only to get into the cell but also the nucleus, which is generally inefficient with non-viral DNA vectors. SiRNAs, however, have the added delivery advantage in that they are active in the cytoplasm and do not have to reach the nucleus. Their smaller size compared to DNA may also help.

In summary, while a lot of the scientific rationale for the trial appears sound, I see delivery as a huge hurdle for this particular RNAi program and am therefore quite skeptical.
For those interested in learning more about Nucleonics' strategy, please visit http://www.nucleonicsinc.com/products/hepb.html

Tuesday, May 1, 2007

RNAi and the Eye

One of the criticisms one encounters when evangelising about a hot new technology from the lab is that it hasn’t been proven yet ‘in the real world’. Given the glut of medical breakthrough announcements in the daily press, investors know all too well that much of those won’t ever have a clinical impact. Validation is the key, and while RNAi has seen many pre-clinical, and some clinical validations, a drug approved by the FDA has to be the gold standard. So when will we see the first RNAi drug on the “market”? Unless the government started stock-piling siRNAs against bioterrorism threats such as Ebola or a bird flu pandemic (note there is considerable effort ongoing in this area), my conservative guess would be 2010-2011 with the application being age-related macular degeneration (AMD). Currently, it is a race between 3 drugs in phases I to III for the glory of being first to have an RNAi-based drug approved.

That the eye and wet AMD should be the subject of so much early interest should not be surprising. AMD is considered to be a low-hanging fruit as the target cells are relatively easily accessible, the eye as an immune-privileged organ, and the existence of well validated targets. Notably, there are two other nucleic acid-based therapeutic classes of which the only approved drugs is one for a condition of the eye each: the antisense oligo Vitravene of ISIS Pharmaceuticals for CMV retinitis in people with AIDS, and the RNA aptamer Macugen of OSI Pharmaceuticals recently approved for wet AMD. Like Macugen, one of the siRNAs by Opko (formerly Acuity Pharmaceuticals) targets VEGF. However, more recently monoclonal antibodies by Genentech targeting VEGF have become a more popular and effective treatment option. This illustrates how fast the competitive landscape may change and the commercial risk from competing technologies. RNAi companies reacted in different ways to this situation. Realising that the market for AMD is becoming increasingly crowded, the Alnylam (www.alnylam.com) management made the brave and early decision to stop its VEGF-AMD development program and instead focus their precious early efforts on so called non-druggable targets. These targets are well validated in biology, but either because of their localisation or structure cannot be reached by non-RNAi drug classes. The next strategy is exemplified by Sirna Therapeutics. Instead of going after VEGF, they took the decision to go after another protein in the same pathway, namely the VEGF receptor 1. This target may have increased potency as it is thought to be required for the functioning of yet another signalling molecule implicated in AMD, the placental growth factor(PIGF). Also because it is a target different from VEGF itself, VEGF-R siRNAs may act synergistically with the now established VEGF therapies. In general, RNAi may be used synergistically with other drug modalities due to its unique mechanism of action. Sirna then went one step further and partnered with Allergan, a company with experience in treating eye-related diseases. In order to better position their drug, they put considerable effort into addressing one of the short-comings of existing therapies, namely the need for relative frequent needle injections into the eye. Each needle injection carries the risk of treatment-related complications, including blindness. Indeed, RNAi may be able to provide a solution for this as is indicated by early phase I pharmacokinetic data from Sirna and studies of RNAi knockdown in the liver by Protiva and Alnylam scientists that show long-lasting RNAi silencing effects following a single application of siRNAs. When combined with a slow-release formula, this property may eventually allow for once-every-6-months injection treatment regimens. The last strategy that I would like to highlight here is to go after completely new targets- really one of the great strengths of RNAi after all. Although carrying a higher development risk, Quark Biotech embraced this philosophy and is now targeting REDD1, a gene that they identified as playing a pivotal role in the progression of AMD.

Watching the drugs navigate through the complicated drug approval process will be fascinating. Let’s hope that these pioneers will be rewarded for the risk taken, but also caution them not to take any short-cuts in order to be the first to claim RNAi glory. For me meanwhile, there is little doubt about RNAi drugs in the future. Such a potent mechanism to regulate genes beckons to be used in the clinic, the only question therefore is therefore how many and how soon.

Tip: For those interested in investing in RNAi companies, the message board on Investor Village about Alnylam (symbol: Alny) is a great resource and discussion forum: http://www1.investorvillage.com/smbd.asp?mb=569&pt=m&clear=1
By Dirk Haussecker. All rights reserved.

Disclaimer: This blog is not intended for distribution to or use by any person or entity who is a citizen or resident of, or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject the author or any of his collaborators and contributors to any registration or licensing requirement within such jurisdiction. This blog expresses only my opinions, they may be flawed and are for entertainment purposes only. Opinions expressed are a direct result of information which may or may not be accurate, and I do not assume any responsibility for material errors or to provide updates should circumstances change. Opinions expressed in this blog may have been disseminated before to others. This blog should not be taken as investment, legal or tax advice. The investments referred to herein may not be suitable for you. Investments particularly in the field of RNAi Therapeutics and biotechnology carry a high risk of total loss. You, the reader must make your own investment decisions in consultation with your professional advisors in light of your specific circumstances. I reserve the right to buy, sell, or short any security including those that may or may not be discussed on my blog.