Sunday, June 15, 2008

Nucleonics in Liquidation While Benitec Shows Signs of Life

Just a day after boasting how RNAi Therapeutics continues to enjoy ample financial support in a tough economic environment, a google news alert indicates that Nucleonics is in liquidation mode.

Since its inception, Nucleonics has made more headlines with their IP battles with Benitec over DNA-directed RNAi supremacy rather than with good science, and must be filed under those early biotech companies that spent more money on administrative and legal expenses than R&D. The ultimate nail in the coffin may have occurred when a Federal Court denied Nucleonic’s wish for a declaratory judgment against Benitec’s patent claims last year, thus leaving the company and investors vulnerable to future lawsuits by Benitec.

While it has to be said in Nucleonics's defense that it wasn't solely responsible for the endless litigation, the obvious winner from this new development is Benitec. With their arch rival out of the game it may now find it easier to concentrate on drug development, although financing and IP issues remain of concern. Encouragingly, their collaborator on the HIV AIDS lymphoma program, John Zaia from the City of Hope, just recently presented at the annual ASGT meeting early interim phase I data on the successful transplantation of RNAi-modified hematopoietic stem cells in two patients (using lentiviral vector technology). It will be exciting to determine how safe and sustained RNAi expression is and whether the derived T-cells have a survival advantage compared to those derived from the unmodified stem cell fraction transplanted at the same time.

Coming back to Nucleonics, the apparent bankruptcy is also likely to affect their recent HBV RNAi clinical program involving the administration of a plasmid formulated with cationic lipid. We may never know about what happened to the first patients that received the plasmid, and maybe that’s good so. The Nucleonics experience shows that early IP battles are dangerous and costly, and that as the RNAi Therapeutics field matures it is becoming difficult to attract funding based on me-too technologies and long-shot scientific strategies.

Disclaimer: This Blog may not be based on reality and reflects my views as of today only.


ledgy said...

IP issues are a big concern for Benitec. The examiner appears to be making no distinction between ddRNAi and siRNA in the current re-examination of the '099 (Graham)patent.

Dirk Haussecker said...

Thank you for this interesting insight. Worst case scenario, Benitec should still have the 5 InterfeRx picks from Alnylam as part of their 2005 cross-licensing agreement, and the current value of those appears to be increasing.

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