Wednesday, July 30, 2008

Pfizer and Quark Progress RNAi Therapeutic for Diabetic Macular Edema into Phase II

Quark Pharmaceuticals today announced that development partner Pfizer has initiated dosing of the first patient in a phase II trial of the RNAi Therapeutic candidate PF-4523655/RTP801i-14) for diabetic macular edema (DME). The start of the phase II trials is a vote of confidence in RNAi Therapeutics for eye diseases by a major pharmaceutical company with a considerable eye care franchise and growing ambitions in RNAi Therapeutics.

The 160-person safety and efficacy trial follows phase I/II studies conducted by Quark that showed the drug to be safe and well tolerated in patients with wet age-related macular degeneration (wet AMD). Similar to DME which affects about 10% of type I and II diabetics, wet AMD is caused by the growth of leaky blood vessels in the back of the eye leading to blurred vision, and in some cases blindness. For this reason, it is not uncommon that a given compound is being tested for both indications.

The reason that Pfizer has chosen DME instead of wet AMD as the indication for this trial may be related to the fact that the wet AMD RNAi Therapeutics space has become crowded with Opko Health and Sirna Therapeutics/Merck having wet AMD RNAi Therapeutics in phase III and II studies, respectively. Opko Health also has a phase II study for DME using the same compound. It may also be related to the recent controversy caused by a Nature paper that showed that dsRNA-triggered immune responses alone may be anti-angiogenic in a mouse model for wet AMD and that this may have led to mis-interpretations of data from related pre-clinical RNAi Therapeutics studies.

However, PF-4523655 is unlike Sirna’s and Opko’s compounds in that it is intended to prevent abnormal blood vessel growth and leakage in a VEGF-independent manner. It is also a 19bp blunt-ended compound and therefore unlikely to trigger non-specific TLR3 responses (21bp seems to be the cut-off where you have to take TLR3 signaling into account). I trust that the former Coley Pharmaceutical’s folks with their deep understanding of TLR biology and that are now running the RNAi Therapeutics show at Pfizer will have closely looked at the issue.

Quark received an undisclosed amount for the initiation of the trials, Silence Therapeutics which had originally licensed the AtuRNAi technology to Quark collected $1.9M, and Alnylam from which a technology license was subsequently obtained on Pfizer’s insistence another undisclosed amount. Clearly, with today's allowance of Silence Therapeutics’ 10/633630 patent in the US which specifically claims AtuRNAi molecules of 18 or 19 base-pairs the IP battles are about to begin, and will be addressed in a follow-up blog entry. In any case, it is an interesting coincidence that the initiation of the phase II studies and the patent allowance occurred on the same day.

Independent of all these patent issues, I look forward to the results of this compound which has the makings of a safe and differentiated RNAi Therapeutic for DME.

Tuesday, July 29, 2008

Comments Section of the RNAi Therapeutics Blog

I have been very impressed by the quality of the comments left below some of the blog entries. If somebody hasn't noticed them, I would highly encourage you to read them for interesting insights, fresh perspectives, and discussion.

I think this small forum here exemplifies that not only is drug development undergoing profound changes, from a sales-force and reformulation-driven model towards one of evidence-based medicine and innovation, but so is the practice of science and investment. Freely accessible scientific publications, realtime quotes and news, and online forums bringing together people with complementary backgrounds mean that everybody has now a chance to participate on a level playing field. Appropriately, RNAi Therapeutics has in the same way empowered the individual scientist to conceive novel drug candidates without the need for large-scale automation, and I would also hope that emerging economies that have thus far not participated in the development of innovative therapeutics will grasp the emerging field of RNAi Therapeutics as an opportunity to be at the cutting-edge of medicine.

Before I digress further, I just wanted to say that I will try and do my best to answer questions if directed to myself, but may not always be able to do so. A sincere “thank you” to all the contributors.

Monday, July 28, 2008

RNAi Therapeutics delivery: not a zero-sum game

Shares of Tekmira briefly fell last week below 80c, a ~20% decline, following Roche’s purchase of fellow RNAi Therapeutics delivery company Mirus Bio. Initially, I did not draw a connection. If a reaction at all, then I would have expected the $125M price-tag to point out the value attached by the industry to promising RNAi delivery technologies in general, which “should have” resulted in a share price increase for Tekmira.

To my surprise, however, it then transpired that the Roche acquisition had been interpreted by some as a vote for DPC and against SNALP RNAi delivery, leading some to sell in a panic. This blog will briefly outline why, unlike is the case in the battle for core RNAi trigger IP, RNAi Therapeutics delivery is not a zero-sum game with room for more than just a handful of technology platforms.

As is becoming more evident by the day, RNAi Therapeutics offers the opportunity to address a very wide range of diseases. As all disease has a genetic element, regulating gene expression should always be able to modify or even correct a disease. To do this, however, one has to be able to knock down the desired genes in various different organs, tissues, and cell types. If there was a universal RNAi delivery technology, it would have to be able to physically contact every cell in the body, yet only knock down genes in the disease-related subset of cells.

Based on the limited publicly avaibable data, Mirus’ DPC technology actually promises to come close to that dream. It is very small in size (~20nm) and therefore satisfies at least one of the pre-requisites of achieving a broad biodistribution. Moreover, it has been shown to be capable of differentiating between the different cell types within an organ, in this case the liver, depending on which sugar had been added- all in the absence of apparent toxicity! It will clearly be exciting to learn more about the delivery profile of DPCs. Nevertheless, I doubt that DPC will necessarily be the delivery system of choice for every indication.

This is because the choice of a delivery system is not only determined by the ability to knock down a gene in a given cell, but also by factors such as overall maturity of the technology, safety as determined by the dose required to achieve such gene knockdown, the biodistribution and cell type-specific gene knockdown on a systemic level, as well as by cost, route of administration, and stability of the formulation.

Consider for example an RNAi Therapeutics against the kinesin spindle protein (KSP) that is being developed by Alnylam as a treatment for liver cancer. Although directly interfering with cell division by down-regulating KSP is seen as a very promising anti-cancer strategy, anti-KSP small molecule programs have indicated considerable dose-limiting toxicities that appear to be target specific. This, however, should not come as that much of a surprise since interfering with spindle function would be predicted to affect normally proliferating cells as well, particularly those of the hematopoietic system. Well, this dilemma is not new at all to the cancer field, and often the benefits outweigh the side-effects, but this example illustrates the value of a delivery technology such as SNALP-RNAi that can be tuned to deliver around 95% of the injected dose to the liver, including hepatic tumor tissue.

Certainly, Roche may elect DPC delivery over SNALP delivery (note: Roche has access to both) for some liver indications, but that type of competition has actually only decreased with Mirus Bio out of play. This is because all the other two dozen or so pharmaceutical companies equally interested in RNAi Therapeutics, will now have access to one less viable delivery technology. The incentive to gain access to the still fairly accessible RNAi delivery platforms with clinical potential has therefore never been greater. Roche, of course, enjoys the luxury of being able to choose between two technologies that, maybe in an effort to avoid the appearance of favoritism, it has valued essentially identically based on their $5M equity investment in Tekmira at $2.4 per share(Tekmira now has 51.6M shares outstanding).

Bottom line, due to the ever growing attraction of RNAi Therapeutics, any company, and that goes beyond Tekmira-SNALP, with clinically relevant RNAi delivery technology and a good IP package to protect it can rest assured that they own a very hot commodity.

RNAi Therapeutics portfolio update: With Roche’s validation of the value attributed to clinically relevant RNAi delivery technologies and with increased clinical visibility, I have slightly increased my position in Tekmira while paring back on the overweight ALNY position. In another attempt to capitalize on the idiosyncracies of the stock market, I have converted the RXi Pharmaceutical holdings back into CytRx shares (CytRx owns about 50% of RXi, but none of that is reflected in CytRx’s market cap) and added some more at the cost of largely cashing out of RNAi trigger competitor Silence Therapeutics (a token $1 investment is maintained to monitor stock performance).

Disclosure: Long Tekmira, Alnylam, Targeted Genetics, Oxford Biomedica.

Tuesday, July 22, 2008

Roche Nabs Mirus Bio’s RNAi Therapeutics Delivery Technology

Roche again...before this week will have come to an end, Roche has drastically changed the RNAi Therapeutics playing field leaving many heads in the RNAi space spinning.

You may think it is because I live in an RNAi Therapeutics bubble, but the Roche-Genentech press release and conference call to me clearly shows that a major motivation for the proposed taking private of Genentech was to broaden their RNAi Therapeutics efforts by bringing in a company with deep immunology and personalized cancer know-how, as well as being able to leverage Genentech’s monoclonal antibody capabilities for targeted RNAi Therapeutics delivery.

To this they now add for $125M, a sum that makes related companies look very cheap in comparison, the privately held Madison, Wisconsin, nucleic acid delivery company Mirus Bio. The jewel of Mirus Bio is their Dynamic PolyConjugates (DPCs), small, flexible designer particles for the targeted systemic delivery of siRNAs. Although the technology is relatively young and data scarce, from the PNAS publication last year (reviewed here in the RNAi Therapeutics blog) and conference presentations, DPCs are very competitive with liposomal technologies for delivery to the liver. Also very attractive from a safety and efficacy point-of-view is their apparent ability to selectively target silencing either to hepatocytes or Kupffer cells in the liver, depending on whether glucose or galactose-derivatives were attached. Although I haven’t seen data beyond the liver, the small size and modularity suggests that with the appropriate pharmacology it could well have applications for a number of other tissue types and organs and nicely complement larger nanoparticle delivery technologies.

It’s unlikely to be a coincidence that Roche is making all these moves in such short order. What has started with an IP license from Alnylam for basic access to RNAi mechanism of action, within 2 days they have now added to that one of the most coveted delivery technologies and scientific depth. The rapid moves by Roche means that fellow Big Pharmas like Pfizer, which had a non-exclusive license to DPCs, and Merck which had probably also been very interested in DPCs, now risk falling behind on delivery while their core RNAi IP has either not been secured yet (Pfizer) or is at best uncertain (Sirna Therapeutics/Merck). From a strategic perspective, it will be interesting whether due to their close relationships there will be any sharing/coordination of DPC technology with Alnylam and Tekmira, and for which indications Roche will employ the two leading delivery technologies (DPCs and SNALPs) both of which it has now immediate access to.

Today's acquisition is yet another piece of evidence that Roche is building their future on RNAi Therapeutics in a big and bold way. It's also encouraging that this comes a year after the Alnylam platform licensing agreement and suggests that they must have been pleased with what they have seen since.

Sunday, July 20, 2008

Speaking of the Devil: Genentech Receives Full Takeover Offer from Roche; Stands to Become Alnylam’s Partner

Just as I was speculating that Genentech may become Alnylam’s next major RNAi Therapeutics partner, Roche makes an offer to buy the rest of Genentech’s shares that it does not own already. I’m sure the pundits will be all over what this event will mean for drug development, so just a few notes on its relevance for RNAi Therapeutics.

From the press release and based on historical comments against the notion of mega-mergers with fellow Big Pharma and against entering generics, it is clear that Roche is very keen on leading the development of innovative medicines, particularly personalized medicine. What better candidate than Genentech with all its know-how in this arena as well as size to sufficiently impact Roche's top and bottom lines? Just to demonstrate that personalized medicine is more and more becoming a reality, Roche appropriately also announced today European approval for an interferon-ribavirin treatment regimen for hepatitis C based on individual viral titers and rapid viral response. Interestingly, Alnylam disclosed really for the first time in the Pharmaceutical Executive report its interest in hepatitis C which might be best addressed by SNALP delivery. And how much more personalized can hepatitis C treatment get than to sequence the virus in a given patient and then deliver the appropriate siRNA combination?

Reassuringly, the press release prominently mentions RNAi Therapeutics as a central component of the innovation engine of the combined company:

“The structure of the combined company will allow for a diversity of approaches in research and early development, while also strengthening cross fertilization between the companies, leading to enhanced overall innovation within the Group. Roche's recently adopted Disease Biology Area approach, which allows five diverse groups to manage their innovative portfolios, will be maintained and strengthened. This, together with recent moves into RNAi (Ribonucleic Acid interference) and delivery technologies, as well as licensing activities, continues to provide a stimulating
environment for the creation of medically differentiated medicines.”

And on the “enhanced ability to innovate”, the press release goes:

“The transaction will over time significantly enhance cooperation and cross fertilization among all research hubs inside and outside of the combined company. Sharing of technologies (e.g. RNAi, novel protein architectures), assets (e.g. chemical libraries), intellectual property(e.g. antibody production), unique capabilities (e.g. exploratory development, modeling and simulation) and know-how of the combined research organization will strengthen the Group's ability to innovate.”

I wonder how much Genentech will be surprised by the offer. In this regard, it is also interesting to speculate whether Alnylam had been in negotiations with Genentech or not. If so, would an unsolicited takeover of Genentech by Roche mean that Alnylam has to forego platform license fees that it would have otherwise received if Genentech remained independent? On the other hand, could it be that Genentech’s moves into RNAi Therapeutics had long been co-ordinated with Roche’s efforts, relying on being able to access RNAi know-how and IP through Roche? I guess the answer will come whether the $89 a share offer will be recommended by Genentech management to shareholders or not. Given the close ties between the companies a Ventana-like takeover battle is difficult to imagine. The weak dollar may also aid Roche in increasing the price a little bit to satisfy all Genentech shareholders.

Today’s development promises to be a defining moment in the history of drug development. With the recent acquisitions of diagnostics company Ventana and now Genentech, Roche has now fully committed to embracing the future of personalized medicine. Based on comments by the new CEO Severin Schwan who has now more than amply demonstrated that he really means what he says, RNAi Therapeutics is to play a key part in this.

Genentech and RNAi Therapeutics- Part 1

A very enjoyable, yet detailed feature article by Walter Armstrong on the state and prospects of RNAi Therapeutics in the Pharmaceutical Executive this month, concludes with a somewhat bold prediction of mine: Genentech will partner with Alnylam to develop RNAi Therapeutics. I would like to use the next two blogs to expand on this speculation, explaining why such an alliance would not just make Alnylam shareholders happy (Part 1), but also the ways that Genentech’s participation in RNAi Therapeutics should benefit the entire sector (Part 2).

First off, all of this is conjecture and not based on inside information. I think it is fair to say that Alnylam is the bellwether of the RNAi sector. At the same time, however, Alnylam has made it no secret that it in turn is following the example of another biotech company- the iconic Genentech. For example, when Alnylam won the prestigious biotechnology James D. Watson Helix award for the mid-cap category in 2006, it was particularly proud to join Genentech as that year’s winner of the large cap category. References to Genentech’s business development strategy can also be heard at regular intervals in its conference calls and interviews like the one by Nature Biotech with Alnylam CEO John Maraganore in 2007 from which this excerpt is taken:

“JM: By that, I mean good old-fashioned, peer-reviewed, published research, appearing in top journals like Nature, Science and Cell. In this, we have a prominent role model: Genentech (S. San Francisco, CA, USA).When I was starting my career in biotech in the 1980s, Genentech wowed both academic and industrial scientists by blazing a trail in genetic engineering. Every week, it seemed, there
was a paper in one of those top journals describing an exciting new advance—Axel Ullrich making fusion receptors with cytoplasmic tails that helped us understand cell signaling, the cloning of tissue plasminogen activator—all of which were amazing feats at the time. Just as importantly,Genentech captured the imagination first of academic scientists, then of public-market investors and then of Hoffmann-
La Roche (Basel, Switzerland), all of whom profited handsomely on their decisions to place their trust and their capital in the hands of that company’s leaders.”

Also note the reference to Roche and Alnylam's deal with Roche announced 3 months thereafter. It was then also a statement by Roche made in the wake of Roche-Alnylam expressing their hopes that Alnylam may be their second Genentech (Roche is the majority owner of Genentech), that then confirmed that there may be more to Alnylam-Genentech than just the respect and admiration of an emerging company for the industry powerhouse. I’d like to think that at the time the statement was made, it was not merely hopes of making lots of money that where on Severin Schwan’s mind, now the CEO of Roche.

When as part of the Tekmira-Protiva reunion it was mentioned that out of the four technology evaluations by unnamed companies there was a Big Biotech, it was possible to start seeing the scientific dimensions take shape. Appropriately, in addition to Alnylam upping their stake, Roche joined by buying 4% of New Tekmira. As a reminder, one of the most promising therapeutic areas for SNALP RNAi delivery technology is oncology, and when it comes to Roche and cancer, we really mean Genentech and cancer.

Genentech not only pioneered recombinant protein therapeutics, but is also leading the pack in developing personalized cancer medicines. As I mentioned in an earlier blog, Genentech is now looking at small molecules as monoclonal antibodies cannot address the numerous targets it has discovered and accumulated considerable know-how in as part of their oncology efforts. These targets are downstream of the much more limited upstream components of cancer signaling pathways (downstream in general also means more specific/safer). This is particularly problematic when resistance mutations occur that render targeting the upstream ones futile. While RNAi Therapeutics had not been officially mentioned, I have to admit that I would be very surprised and quite frankly disappointed if Genentech did not resort to RNAi to harness its oncology target know-how by non-monoclonal means.

RNAi-related microRNAs should also be of great interest to Genentech as they could be developed as companion diagnostics for personalized cancer drug treatment, and possibly as therapeutic targets themselves to which Alnylam could provide access via Regulus.

Building on publicly disclosed RNAi screening know-how, the following job advertisement by Genentech earlier this year suggests that its RNAi Therapeutics plans are rapidly materializing:

“Responsibilities: We are seeking a highly motivated Research Associate or Senior Research Associate to conduct a range of research activities to enable delivery of an exciting new class of therapeutics based on RNA interference (RNAi). As a key member of our research team, this scientist will use a variety of methods (molecular biology, cell biology and biochemistry) to: (a) develop technologies to effectively deliver RNA-based drugs for a variety of therapeutic indications and (b) discover and elucidate the mechanisms of delivery and gene silencing.”

Whether an alliance is announced this year or not, the above circumstantial evidence and the secretive Genentech conference participants suggest to me that srtl RNAi Therapeutics will not only be validated as the innovation outlet for Big Pharma, but even biotech.

To be continued…

Monday, July 14, 2008

Journal Club: Structural Basis for Double-Stranded RNA Recognition by TLR3 and Activation

The recent Nature paper by Ambati and colleagues raised some concerns about whether non-specific inflammatory responses due to activation of TLR3 by double-stranded RNAs, the inducers of RNAi, would represent a significant, if not insurmountable obstacle towards the development of RNAi Therapeutics. While the short answer was no, since most in the field had already recognized the need to screen against the capacity of RNAi triggers to induce immune responses, determining the rules activating TLR3 and similar molecular patterns should facilitate the more efficient design of safe and potent RNAi triggers. Recent papers on TLR3 structural biology should do just that.

In an April edition in the journal Science, Liu and colleagues from the NIH report on the structure of mouse TLR3 with its double-stranded RNA substrate (note that mouse and human TLR3 are very similar). The structure suggests that a 40-50 base-pair double-strand RNA is optimal for binding by TLR3 thereby inducing TLR3 dimerization and downstream signaling. The fact that one of the dsRNA binding patches contains a number of pH-sensitive histidines further suggest why TLR3 signaling is most robust following uptake into endosome which provides for an acidic compartment. Overall, the structure supports previous observations that dsRNAs longer than what is typically used for siRNAs are better inducers of TLR3; however it does not explain well how smaller siRNAs may also induce such signaling.

An explanation for this is provided by structure-based mutagenesis studies by Pirher and colleagues from the University of Ljublijana (Slovenia). In this paper, they identify two dsRNA-binding patches within a TLR3 monomer and also find and explain why B-type helices, as typically found in DNA, only bind to one of the two binding patches and therefore fail to induce, and even competitively inhibit TLR3. This is in contrast to dsRNAs that typically assume A-type helical formation and bind both patches. With this the authors come up with a model to explain how TLR3 dimers bind to shorter double-stranded RNAs by assuming alternative conformations with ddimerization on the shorter dsRNAs being less efficient.

These findings immediately suggest various ways to avoid TLR3 signaling. The simplest would be to stay below 21 nucleotides, and it is well known that 20 nucleotide siRNAs are equally potent inducers of RNAi. Unlike the somewhat disgruntled 1st commentator following my previous blog would like to suggest, 15-21 nucleotide siRNAs as covered by one version of Kreutzer-Limmer in Europe are therefore therapeutically highly relevant. Generally, keeping it short is the probably easiest way to avoid non-specific immune responses. Next to sequence length, limited modifications of the siRNA at sites where they interact with TLR3 as shown by the structure should abolish any TLR3 activation and possibly serve to antagonize TLR3, similar to what has been found for 2’o-methylation and TLR7. Likewise, changing the helical shape at one end which may also have the added benefit in encouraging asymmetric RiSC loading may be a third strategy of circumventing TLR3 activation.

It is clear from reading the papers that much of the motivation for performing these is related to RNAi Therapeutics. These are findings that are not just theoretical in nature, but very much of practical relevance. The speed with which this progress has been achieved illustrates the vigor and the many tools brought to bear by the scientific community on making RNAi Therapeutics become a reality.

Friday, July 11, 2008

Silence Therapeutics Wins PR Prize in RNAi Therapeutics

Silence Therapeutics’ press release following the initiation of the Glover patent opposition hearings has to be counted as yet another example of the company’s series of misleading and factually flawed public statements.

Claiming that “the Glover patents was arguably Alnylam’s broadest patent” may be true in the sense that the patent claimed a lot, essentially double-stranded RNAs for gene silencing in mammals, but it is far from true, as Silence would want you to believe, that it represented Alnylam’s most important (RNAi trigger) patent. As Michael King from Rodman & Renshaw rightly noted in a report on the Xconomy blog, these are Tuschl II, followed by Crooke and Kreutzer-Limmer. Actually, when you would use the search function on my blog, yesterday may have been the first mention of the Glover patent. That’s how important I have considered this patent to be.

If I had been part in the early planning stages of Alnylam, a company that had been built around Tuschl II, Glover would have been a worry due to its early date and broad claims. But it is clear that Glover did not solve the non-specific interferon response issue that had critically impeded the broad application of RNAi in man, and claiming such based on studies in exceptional model systems such as oocytes and pre-implantation embryos may be overly ambitious. Still, a good patent to have control over and a weakening of Glover after the appeals have been heard, would only strengthen Tuschl II.

Another salient example of Silence’s overly zealous PR machine is the Quark issue. I’ve always found it amusing to come across Silence Therapeutics’ lengthy press releases that typically follow any pipeline and business development progress by their PR-wise much more conservative partner Quark Biotech, making it appear as if these achievements were almost entirely to the credit of Silence Therapeutics. Not surprisingly, according to a report in February this year by David P. Hamilton on the VentureBeat Blog, this appears to be a mis-representation and Quark is not very happy with this situation. I would not be surprised if Alnylam's COO Barry Greene, on his recent visit to Israel, had not visited Quark's operations there to see if the relationship between the two companies could be strengthened.

And finally, whether it’s liposomes or lipoplexes, hey, we are also working with some kind of a fat globule and if Merck says they are safe then we want to be part of it. And who really cares and understands the difference anyway?

I understand that PR is a very important element of the business strategy particularly of a developmental-stage biotech, but it has to be handled with care and, in a financial world where free and fair reporting is lacking, if careless may cost you the credibility in the eyes of one of your most important constituencies- your investor.

Thursday, July 10, 2008

It’s Getting Lonely as Silence and Merck Attempt to Climb Alnylam’s Many RNAi Trigger Patent Walls

Today, Alnylam announced the completion of initial oral opposition proceedings concerning the Glover patent EP1230375 for the use of double-stranded RNA to inhibit gene expression in mammalian cells, one of the many RNAi trigger patents and patent applications Alnylam either owns or has (often exlusively) licensed access to and which are based on pioneering RNAi research in mammalian cells thus shoring up the company’s gate-keeper position in the therapeutic application of RNAi.

Such opposition proceedings are common in Europe, particularly for patents deemed valuable enough to have the potential to restrict the freedom-to-operate of other parties. One familiar example that has been the subject to similar proceedings in Europe is Kreutzer-Limmer, yet another of Alnylam’s RNAi trigger patents backing up its crown jewel Tuschl II which is currently successfully sailing through the global patent systems.

Most of you reading this blog will be well aware that while Fire and Mello’s seminal discovery shed light on double-stranded RNAs as the trigger of RNAi, subsequently found to be true throughout almost all eukaryotic life, its application to human cells was not immediately apparent as the long double-stranded RNAs used are well known to induce non-specific innate immune responses in most mammalian cell types, therefore making long double-stranded RNAs not useful for the vast majority of conceivable RNAi Therapeutics. It was therefore the breakthrough discovery by Tuschl and colleagues that opened up RNAi for widely applicable human use by showing that structurally defined short double-stranded RNAs, siRNAs, derived from the processing of long double-stranded RNAs can induce gene-specific gene silencing in essentially all mammalian cells without the induction of the non-specific responses.

One exception to the non-specific response to long double-stranded RNAs are oocytes and pre-implantation embryos, and indeed in the wake of Fire-Mello work underlying the Glover patent and published by Florence Wianny and Magdalena Zernicka-Goetz from Cambridge University (UK) in 2000 demonstrated that long double-stranded RNAs could be used for specific gene silencing in these cell types. While a highly exciting finding for reproductive biology, including potential uses for RNAi-enhanced ES cell therapeutics, it is clear that its impact for the wide development of RNAi Therapeutics is far more limited than Tuschl II. It is probably one of the patents that Alnylam would want to control to make sure that it was not construed to precede Tuschl II and forms part of a well thought-through patent strategy, but that it does not critically rely upon. Of course, because Glover, similar to Kreutzer-Limmer, also claims long double-stranded RNAs and would therefore also impinge on Dicer-substrates etc., it is particularly susceptible to attack by companies whose sole existence depends on having varied the size of the double-stranded RNA or having engineered a “proprietary” modification or pattern thereof into double-stranded RNAs.

From the title you might think that I am a blind Alnylam supporter (and, yes, I do own Alnylam shares, but, no, I am not paid by the company to write this), but note that I refer to RNAi trigger IP, that is the molecules themselves that induce RNAi silencing in mammalian cells by synthetic double-stranded RNAs. This does not mean that there is enough potential for big and small alike to create valuable enabling IP around these siRNAs (delivery, safety, and gene target-specific), also to gain some leverage with regards to Alnylam. It is interesting to speculate that the subject of another announcement today, namely the creation of Boston-based “Enlight Biosciences”, a technology incubator jointly sponsored by Pfizer, Merck, and Eli Lilly, of which one of the stated goals is the development of RNAi delivery methods all the while trying “…to find the next RNAi,” according to the Xconomist blog. A tall order, particularly the latter.

In the ideal world of free market capitalism, resources would flow to where problems need to be solved, in the case of RNAi delivery and safety, not into the coffers of lawyers- they get their share anyway in each and every deal sealed or not sealed even without patent litigation. It therefore certainly makes sense that rather than engaging in costly and futile battles with a strong company, more and more large biotech and pharma companies have opted to join a strong Alnylam in its quest to develop RNAi Therapeutics.

After Novartis, ISIS, Janssen/Johnson&Johnson, and Quark have withdrawn their opposition to Kreutzer-Limmer and Glover, it is now essentially Sirna Therapeutics/Merck and Silence Therapeutics with some of their partners that remain the only opposing parties. Meanwhile Alnylam, confident of their freedom-to-operate and overall strong IP position, continues to watch the early legal wranglings in the field, while focusing on the real issues at hand. As Nucleonics and Benitec would tell you, it’s probably wiser to handle patent violations by exacting appropriate royalties once products near the market, not now. Shares in Silence Therapeutics closed at 23.75p today on the London Stock Exchange, down almost another 10% and off more than 80% its high of last year.

My strong opinion is founded on having looked at the totality of the high quality science underlying Alnylam’s fundamental patent estate, and I would consider it a travesty of the patent system if as a result of a gap in the understanding of the science of RNAi by judges or patent attorneys, the commercial value of the IP would be eroded, with serious consequences for the therapeutic exploitation of RNAi. Such a weakening of the patent system would not only hurt Alnylam, but the entire drug industry which will only survive if truly deserving innovation can be protected. So far, this has not happened to RNAi, and I believe the outcome of these proceedings and future Alnylam deal flow will substantiate this.

Big Pharma would therefore do well not to attempt to kill the goose that lays the golden RNAi eggs for them.

Sunday, July 6, 2008

The Potential for AAV-mediated RNAi Therapeutics

There is good reason to believe that synthetic siRNA-mediated RNAi Therapeutics should emerge as the most commonly used form of RNAi Therapeutics. Nevertheless, DNA-directed RNAi Therapeutics also has a number of potential uses where it should not only be competitive with, but even superior to synthetic RNAi. Unfortunately, the commercial development of DNA-directed RNAi Therapeutics has been somewhat hampered due to litigation and other management issues as well as funding problems that all things “gene therapies” face. In an effort to dispel some of the myths surrounding DNA-directed RNAi Therapeutics and since I’m somewhat familiar with particularly AAV-mediated DNA-directed RNAi, I would like to take the opportunity here to briefly highlight some of the potential applications for this particular technology.

DNA-directed RNAi can either by delivered by non-viral or viral means. For the most part, current systemic non-viral delivery technologies for DNA vectors that need to get into the nucleus for functional activity may not be adequate as a result of their inability to transfect sufficient cell numbers as well as support long-term expression. By contrast, viral vectors, particularly AAV and lentivirus, are capable of very efficiently and stably transducing many cell types. In fact, in vivo potencies are often greater than with most current synthetic RNAi methods with essentially knock-out phenotypes in the liver and eye observed for months and years using self-complementary AAV8 vectors in work reported by the laboratory I work in and collaborators to name just one example.

Before focusing more on AAV with which I am most familiar with (learning by osmosis), lentivirally delivered RNAi has much potential for disease of the CNS, largely for the same reasons as outlined for AAV below, and in combination with cell therapeutics. The latter would involve the ex vivo transduction of lentiviral RNAi constructs for example into stem cells similar to the ongoing phase I HIV-RNAi trial by the City of Hope and sponsored by Benitec, or also to enhance dendritic cell cancer vaccine strategies. Many of these applications take advantage the stable integration of lentiviral vectors into the host genome such that the vector and its expression/knock down will be maintained even in dividing tissues.

By contrast, due to its largely episomal nature, AAV gets rapidly during cell division thus limiting their applicability for cancer therapy or in other situations that involve cell division (regenerating liver, stem cell differentiation etc). Moreover, in certain settings humoral and T-cell mediated immune responses against AAV viral proteins present another challenge for achieving persistent gene silencing (the transduced cell may be recognized by the immune system and be eliminated) and where repeat-administration is desirable (due to neutralizing antibodies generated following the first administration).

For these reasons, AAV RNAi appears most promising for diseases of the eye and CNS as immuno-privileged sites. Although infusion pumps may address some of the challenges of allowing for long-term intracranial gene silencing by synthetic means, due to the ability to mediated sustained gene silencing for 6-12 months if not several years as suggested by canine AAV studies for hemophilia, the prospect of maybe having to subject a patient only once or very few times to an invasive operation makes AAV and lentivirus attractive alternatives for diseases such as Huntington’s Disease and other neurodegenerative disorders.

Not coincidentally, Targeted Genetics and the University of Iowa are currently pursuing an AAV RNAi program (pre-clinical stage) for Huntingon’s Disease that has shown promise. A critical factor for the success of this program should be the design of the shRNA expression cassette, and I personally would feel more comfortable with an H1 promoter-driven instead of a U6 promoter-driven construct that has been the front-runner so far. Another interesting application may be for the treatment of PML viral infection. Biogen Idec and Alnylam have been working on an siRNA-mediated approach, but due to serious nature of JC virus reactivation during PML, rapid onset of gene silencing by self-complementary AAV RNAi and the efficient vector delivery achieved for a number of neuronal cell types, AAV-mediated RNAi warrants consideration for this devastating disease.

Suitable non-CNS applications for AAV ddRNAi candidate may be instances where a single administration may already be therapeutic without the need for sustained gene silencing and repeat administration. HCV infection of the liver may be one such case as it is now possible to essentially transduce every liver cell, at least in mice, and effect long-term silencing after a single administration. AAV-medicated RNAi could therefore be an important component of combination therapies for patients that do not respond to current therapies and could also quite easily be tailored to the different HCV genotypes. Pfizer just recently acquired co-development rights for the pre-clinical stage AAV RNAi program for HCV from the Benitec spin-off Tacere.

AAV gene therapy is relatively new, but it is making rapid progress. Two independent phase I/II AAV gene therapy trial for Leber’s Congenital Amaurosis caused by RPE65 deficiency, a condition that leads to blindness later in life, demonstrated clear improvement in vision and treating children early on promises to even cure the disease. One of the studies was conducted by an academic group in London and was sponsored by Targeted Genetics, the other by a group from the University of Pennsylvania.

It is not clear whether an immune reaction that eliminated transduced liver cells in a hemophilia trial was specific for the AAV 2 serotype used, as most of us will have been exposed to this type of AAV during childhood and may therefore harbor some immune memory for it. A number of strategies have been proposed to minimize the risk of immune recognition in future trials, for example transient immune suppression or the use of alternative serotypes. The search for and development of alternative AAV serotypes is truly exploding and is rapidly yielding new AAV vectors with various tissue tropisms and immune properties.

The less AAV that needs to be administered the better also from an immune point of view. Very promising in that regard is the finding that the self-complementary AAVs which by-pass the rate-limiting second-strand synthesis step during the establishment of gene expression much more efficiently and functionally transduce target cells than conventional single-stranded AAV vectors. While this halves the vector capacity to less than 2kb, a size that is not very practical for expressing many protein-encoding genes, this does not matter at all in the context of small hairpin expression cassettes and appears to be just made for AAV RNAi. Actually, it was this property of self-complementary AAV vectors that was one of the main reasons for me to come to Stanford to conduct post-doctoral research. A patent for this possibly critically enabling technology has been issued to Targeted Genetics.

RNAi Therapeutics Portfolio Review: Increasing Position of Targeted Genetics

The technology is certainly there to be harnessed for therapy, but the development of AAV RNAi Therapeutics is not trivial and is a collaborative effort that requires careful gene target selection, safe and potent hairpin vectors, thoughtful clinical trial designs, and the manufacture of large amounts of high-quality AAV particles. Nevertheless, with the right team and some luck, it should possible to do.

It has both amazed and scared me to learn in a vivid report by RNAiNews that DNA-directed RNAi company Nucleonics whose lead program was a very long-shot (to put it mildly) RNAi program for HBV, was close to raising $25M in a series C round that would have included a venture capital arm from Johnson & Johnson. How that was even a remote possibility given the odds for that particular HBV RNAi program and the uncertain IP of that company is a mystery to me and makes the ~$13M market cap of Targeted Genetics’ look very cheap by comparison.

For this reason and given the promise of AAV-mediated RNAi Therapeutics in general, Targeted Genetics’ AAV gene therapy know-how and IP, including IP directly related to RNAi -especially the one for the double-stranded AAV and apparently another one for the expression of non-coding RNAs- I will add $680 worth of TGEN to the RNAi Therapeutics model portfolio and will pay for this with the sale of some stock in ISIS Pharmaceutcals (-$280), Oxford Biomedica (-$200), Silence Therapeutics (-$100) and Rosetta Genomics (-$100).

Remember, an investment in Targeted Genetics is highly speculative, its balance sheet somewhat ugly which is made worse by current market conditions which make it almost impossible to raise small biotech capital on reasonable terms. This investment thesis therefore is that Targeted Genetics will be able to win the race against the clock by being an attractive partner for other drug companies interested in RNAi Therapeutics with the resulting license fees and development milestones helping the company through the hard times. Maybe Genzyme with its considerable AAV gene therapy efforts and orphan disease management expertise or Biogen Idec with its long-standing ties to Targeted and interest in PML will bite.

Disclosure: The lab that I work in has an interest in AAV-mediated RNAi Therapeutics. The author has also been accumulating shares in Targeted Genetics between $0.58 and $0.72. The stock is not suitable for most due to adverse market conditions and the precarious balance sheet of the company. The thin trading volume of the stock causes volatilities in share price, usually to the downside, and there is a real chance that the stock will be de-listed from the Nasdaq exchange which will make this little company even more opaque to investors. On the other hand, conditions will improve at some point and in an environment where venture capital exits have become increasingly difficult and considering the attractive relative valuation and maturity of the company and technology, Targeted Genetics may represent an interesting, somewhat more liquid piece of RNAi Therapeutics real estate for investors otherwise specializing in private start-up companies.

Thursday, July 3, 2008

Metabolic Disease Drug Development Anxieties Highlight Benefit of Diversified RNAi Therapeutics Pipeline

Like the commodity bubble, it seems that the regulatory hurdles to drug development are mounting just when we thought we had reached the top. This is the impression one gets from the vote taken by an FDA advisory panel this week that can be essentially boiled down to the presumption that lowering blood sugar increases the risk of heart attack. The prospect of longer and more expensive clinical trials has certainly caused a few mini heart attacks to a number of drug companies developing medicines for diabetes and other metabolic diseases thinking that the obesity epidemic in the prosperous half of the world was bad enough such that regulatory agencies, politicians, and certain clinicians involved in drug development would have a keen interest in new treatment options. Don’t get me wrong here, I see very well the problem of millions of real patients and maybe not-so-needy folks taking drugs from which they do not derive any benefit, but there certainly are other ways of ensuring drug safety and efficacy without rendering drug development, and eventually the cost of drugs just unaffordable to anybody, and often without good reason.

Now that I got this off my chest, what does the broad attack on metabolic disease drug development mean for RNAi Therapeutics?

Metabolic disease, because of the ability of current systemic delivery methods to effectively knock down genes in the liver which is critically involved in regulating blood sugar and lipid levels, is one of the main therapeutic focus areas of current RNAi Therapeutics development. It shares this position with cancer, followed by respiratory, ocular and CNS-related disease. It may therefore be tempting, if you have the ability to target a range of hot metabolic disease targets, to create a development pipeline based on metabolic disease and little else. ISIS Pharmaceuticals from the related field of antisense therapeutics is probably the best example here as it has very much limited their internal drug development activities on metabolic disease, while handing off some of the more challenging targets such as for cancer to one of their many satellite companies.

Of course, if you don’t have the capability to diversify, concentrating on building a franchise around a single, but potentially very lucrative market may be the most efficient way of maximizing shareholder value given the many synergies derived from largely having only to exchange the siRNA inside and comparatively few other changes. However, if you can afford it and you are interested in establishing RNAi Therapeutics as a broadly applicable drug development platform, you probably would want to spread your risk more widely even if all the programs added up individually would yield a higher valuation. The fact that the regulatory environment may change overnight while drug development is a 12-15 year effort being one reason.

Next to insuring from regulatory risk, diversification also means that failure of one drug candidate such as for a given organ does not necessarily have to impact the perceived probability of success for candidates aimed at other organs. In the same vein, it may also be wise not to be too dogmatic about delivery technologies, siRNA modification or DNA-directed RNAi methods and structures. For example, if your entire IP claim depends on just one siRNA modification pattern even without so much as functional validation in a non-human primate, you may have ended up totally reliant on clinically non-viable chemistries. Related technologies have shown that developing chemistries in generations rather than multiple chemistries in parallel may mean that if your chosen chemistry generation turns out to be either inefficient or unsafe, it may take another 7 years to get a shot with the next generation.
Meanwhile, all bets are off what steps the FDA will take next.
By Dirk Haussecker. All rights reserved.

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