Monday, November 30, 2009

Has mdRNA Found a Way around Alnylam’s RNAi Trigger IP Wall?

mdRNA has to be The RNAi Therapeutics corporate success story of 2009. At the brink of bankruptcy at this time of last year after problems with their former nasal delivery business sent the company into a breathtaking tailspin, the new management, critically made up of former Sirna Therapeutics executives, was able to save the company by quickly cashing in on some non-core assets, attracting upfront payments of about $12M in two non-exclusive RNAi Therapeutics deals with RNAi heavy-weights Novartis and Roche, and an opportunistic financing shortly after final approval of a partnered legacy generic (calcitonin-salmon nasal spray for osteoporosis) caused an irrational spike in mdRNA’s share price. Although I perceive mdRNA’s lack of RNAi Therapeutics publications as a clear weakness, also in light of its history of later unsubstantiated scientific claims, these developments are signs that not only is the management apparently well connected, but that the company has been able to establish a quite decent RNAi Therapeutics drug development platform and with IP that cannot be dismissed out of hand. Since the Novartis deal on delivery involved not only IP, but also the transfer of liposomal formulation know-how, but the Roche deal on RNAi triggers appears to be an IP-only deal, I have looked more into mdRNA’s claim of having freedom-to operate with its ‘proprietary’ RNAi trigger designs. Out of fairness, I should add here that a lot of this change had been set in motion with the old management.

It has become a popular game in the RNAi Therapeutics industry to design ways around Alnylam’s dominant RNAi trigger patent portfolio. While corporate strategy is the driving force behind these supposedly proprietary designs, given that intellectual property is not always guided by the spirit of science and since new trigger designs might have unexpected beneficial properties for certain applications, it is prudent to pay attention when Roche is willing to pay mdRNA non-refundable $5.0M for a non-exclusive license to mdRNA’s RNAi trigger IP claims after having just paid more than $300M for much less of Alnylam’s RNAi trigger IP. Of course, one might also view this deal, which was also largely free of downstream obligations, as a move by Roche to cover all their bases- just in case.

At the time of that deal, mdRNA had three RNAi trigger designs in its stable: certain rights to City of Hope’s Dicer substrates, the three-stranded meroduplex siRNA design after which mdRNA takes its name, and unlocked nucleic-acid-modified siRNAs (usiRNAs). Subsequent to that deal it emerged from regulatory filings that, perhaps because Dicerna appears to own most of the Dicer-substrate IP, that mdRNA has dropped Dicer substrates from their portfolio. Furthermore, since Dicerna would probably have been quite happy to make a deal with Roche, it would appear that Dicer-substrates, although part of the deal, was not the main motivation for Roche. This leaves us with meroduplexes and usiRNAs.

If you assembled five PhDs in molecular biology for a weekend, presented them with the main claims of Tuschl I and II, and asked them to come up with RNAi trigger design-arounds, in principle the result may have looked similar to what mdRNA arrived at. That the various designs should also likely to be functional biologically, at least to a certain degree, is a testament to the robustness of the RNAi pathway when it comes to relatively short double-stranded RNAs, a realization that has only sunk in subsequent to the Tuschl publications, but that was already heralded by the findings of Kreutzer and Limmer.

Both Tuschl I and II essentially claim double-stranded RNAs of 21-23 (T-I) or 18-24 (T-II) (contiguous?) NUCLEOTIDES in length. Besides size and overhangs which had been the main theater of the RNAi trigger IP war thus far, one might argue that an RNAi trigger that does contains a number of NON-nucleotides or in which the dsRNA is made up of three, and not two strands, does not literally violate the Tuschl claims.

I have long been puzzled why mdRNA would think that using unlocked nucleic acids (UNA) per se would be the solution, as I considered UNA just another nucleotide-modification alternative in the armamentarium of the siRNA synthetic chemist: UNAs are simply nucleic acids in which the C2-C3 bond has been disrupted (that is apparently also the process by which they are generated). But when the company’s CEO Michael French at the BMO Capital Markets Focus on Healthcare Conference made a point that it is the fact that UNAs supposedly are not nucleotides is indeed what underlies mdRNA’s interest in UNAs. A quick, non-representative survey among scientists that I know, however, was consistent with my initial assumption that UNAs clearly have to be considered ‘nucleotides’ as they look and behave like such. Moreover, there are numerous quotes by the inventor of UNA, Jesper Wengel of Denmark, and by the Danish company RiboTask from which mdRNA has exclusively licensed the UNAs for therapeutic applications that UNAs are modified nucleotides. The question therefore appears to boil down to whether potential partners first and then the patent offices can be convinced of that a ‘nucleotide’ that does not contain an intact ribose or deoxyribose strictly is a nucleotide no more. Although I am skeptical that any one nucleotide modification is sufficient to get around the Tuschl patents, I could imagine that the possibility alone of their literal interpretation could motivate others to come up with similar non-nucleotide siRNAs.

Aside from the IP considerations of usiRNAs, it is premature to judge the scientific value of this modification over others. The fact that ‘unlocking’ a nucleotide is a quite distinct modification should allow it to endow an siRNA with unique properties with respect to recognition by the RNAi machinery, target specificity, the potential to be recognized by innate immune receptors etc. What can be said based on the limited publication record (Bramsen et al., 2009: Large-scale screen....; Kenski et al., 2009: Analysis of acyclic nucleoside modifications...), UNAs like many other modifications are best tolerated in the passenger strand and can reduce off-targeting by the passenger-strand, whereas the use in the guide strand is much more position-dependent. Whether its judicious incorporation can indeed largely abrogate innate immune responses and/or allow for a better differentiation of on-target cleavage over microRNA-like off-targeting as claimed, remains to be seen and especially published (also because mdRNA/Nastech has a track record of making similar claims which tend to silently disappear over time). On the other hand, since Sirna Therapeutics (Merck) is evaluating UNA-modified siRNAs (Kenski et al., 2009), despite its access to Tuschl I, may be interpreted as a sign that there may indeed some unique scientific merit to usiRNAs, and mdRNA may derive value from controlling its use for RNA therapeutic applications.

Moving on to 3-stranded siRNAs, the other pillar of mdRNA’s RNAi trigger strategy, from an IP point one has to probably say that this stands a better chance of surviving Tuschl scrutiny with Tuschl II explicitly claiming double-stranded RNAs consisting of two strands. The double-strandedness of Tuschl I, however, could be more broadly interpreted in that a nick should not make a difference in determining the length of a double-stranded region. In this case, it will be interesting to find out how 3-stranded siRNAs with a gap instead of a nick would perform.

When I first heard of the 3-stranded siRNAs in 2006, I thought that this was based on the observations by a number of labs at the time that the passenger strand of the siRNA is cleaved as part of RiSC activation and that the objective of 3-stranded siRNAs thus was to hi-jack the RNAi machinery downstream of the intact siRNA. However, looking at the history of the relevant patents, it appears that this was not the case, but was merely a coincidence. There is, however, an interesting twist to the story. RiboTask, which happens to also be mdRNA’s partner in usiRNas, filed for almost identical patent protection, but with a priority date that appears to be a couple of months ahead of mdRNA’s. In the case of RiboTask, which calls the 3-stranded siRNAs not meroduplexes but small internally segmented interfering RNAs/LNAs (sisiRNA/sisiLNA), I do not want to be as dismissive about their scientific motivation, as they address a major concern of 3-stranded siRNAs related to their potential instability. Since short segments of double-stranded RNAs should be relatively unstable, they demonstrated (Bramsen et al., 2009: Improved silencing properties using small internally segmented interfering RNAs) that it is possible to restore ‘duplex’ stability by modifying it with locked nucleic acids, the mirror-image of UNAs and curiously invented by the same people. Moreover, they show that while heavy modification of both strands renders most siRNAs inactive (with the exception of 2’F and 2’-O-methyl), converting such a modified siRNA into a 3-stranded siRNA often restores at least some of the knockdown activity (also quite interesting from an RNAi mechanism point of view). The ability to heavily modify an siRNA without losing activity may be particularly useful for applications where the siRNA is exposed to nucleolytic degradation such as for conjugate-siRNA approaches. From a scientific perspective, I should also mention that the 3-stranded siRNA design is a way to abolish passenger strand microRNA-type off-targeting, although this is no more a considerable challenge for RNAi Therapeutics. It should also be of interest to evaluate how nicked, and particularly gapped siRNAs are recognized by the various innate immune receptors. The above demonstrations may also help RiboTask and mdRNA in their way through the patent offices, particularly in the US and in light of the mentioned academic research that might have started before RiboTask’s work, and I am curious whether the usiRNA relationship between RiboTask and mdRNA will be extended also to sisiRNAs/meroduplex technology.

Since IP is subject to interpretation and therefore fraught with some uncertainty, it remains to be seen whether mdRNA can achieve certain freedom-to-operate in the RNAi trigger space. Although usiRNAs are the current focus of the company, keeping the meroduplex as an alternative design option open seems prudent. More broadly, RNAi Therapeutics in general can only gain from investments in evaluating new modifications and designs as unforeseen beneficial properties could emerge from this. Until then, however, it is unlikely that any Big Pharma would want to risk their RNAi Therapeutics future entirely on mdRNA’s RNAi triggers. This also explains why mdRNA sees more partnership potential in its RNAi delivery efforts, the currently more pressing need in RNAi Therapeutics and for which the financials should continue to grow. mdRNA urgently needs such a partnership since although the company had just averted bankruptcy, with cash running out over the next 3 months, the struggle to get out of the bankruptcy quicksand has not stopped. Based on management, while a number of early-stage technology evaluations are ongoing, no significant upfront payments from partnerships can be expected until the middle of next year by which time it hopes to have more non-human primate data to satisfy a more discriminating Big Pharma audience. Given the positive developments of the company over the last year and management’s track record, investor interest should be sufficient to support a PIPE within the next 30-45 days so that the company gets a shot at achieving its partnership goal. If one indeed wanted to make the gamble on mdRNA’s management, from an investment perspective, waiting until more is learnt about the terms of the financing may be prudent, unless valuations continue to fall much further.

Sunday, November 22, 2009

Calando’s RONDEL RNAi Therapeutics Delivery Promising, but CALAA-01 Prematurely Entered into Clinic

[Part 1 of a 3-part collaborative series with Tobias Wolfram on the first notable attempts at RNAi Therapeutics for solid cancers that have entered the clinic]

When during the company's R&D day the CEO of Alnylam, John Maraganore, highlighted Calando’s cyclodextrin-based siRNA delivery technology (RONDEL) as one of the noteworthy non-SNALP systemic siRNA delivery technologies out there, it certainly piqued my interest. This is not least because any cash infusion and longer-term commitment by a partner like Alnylam would do wonders for the parent company of Calando, Arrowhead Research which is a conglomerate of early-stage, IP-focused business units and has just barely scraped by bankruptcy through a diet of cutbacks. While I always remembered the maturity of RONDEL, developed in the Mark Davis lab at Caltech, to be years behind SNALP, Tobias and I decided to to take a closer look at the development path of CALAA-01, the first clinical RONDEL delivery candidate and also investment focus of reorganized Arrowhead Research.

When Tobias first heard of the technology, it struck him as a very elegant, because simple, and modular method to formulate targeted nanoparticles. In fact, there are not many targeted nanoparticle siRNA delivery approaches where the components supposedly can be assembled by the pharmacist just before patient administration. RONDEL siRNA delivery consists of mixing together siRNA, a short cyclodextrin-containing polycation, and adamantane-coupled PEG stabilizers some of which carry a transferrin ligand, so as to create 60-80nm particles. These particles were rationally conceived to satisfy a range of pharmacologic and formulation considerations. Their suitability for solid cancer relies on the enhanced permeability and retention (EPR) effect of nanoparticles with reasonably long circulation times (here supposedly achieved by PEG stabilization), the ability of the particles to be taken up into cancer cells by transferrin receptor-mediated endocytosis and their subsequent release into the cytoplasm in a pH-dependent manner.

Unfortunately, what we soon came to realize was that while the concept is a very nice one indeed, the particles, particularly CALAA-01, remain to be better characterized both physically (shape, uniformity, storage and biological stability etc) and for their RNAi knockdown ability in vivo. For example, knockdown of RRM2, the target of CALAA-01, and subsequent tumor inhibition have not been demonstrated in a convincing in vivo system. Instead, knockdown efficiencies have largely been limited to in vitro studies. Moreover, these involved siRNAs that were selected with what today would be considered outdated methods and probably as a result were not very potent. The in vivo studies were essentially limited to pharmacological investigations, with the combination of in vitro efficacy and in vivo pharmacology forming the rationale for moving CALAA-01 into the clinic. Moreover, even when considering only the pharmacology, measures such as biodistributions and circulation times did not fit the model which may be explained by nanoparticle instability in vivo, something that really needs to be investigated further. Also, since the siRNAs were unmodified it strikes me as rather strange that no innate immune induction and only moderate adaptive immunity were reported.

What I found to be a valuable take-home message from those studies, although according to Tobias’ liking resting too much on indirect evidence, but not necessarily data obtained with the CALAA-01 clinical candidate, was that the utility of the targeting ligand appeared to be in increasing the cellular uptake of particles with little positive surface charge, less so in skewing the biodistribution towards the solid cancers per se. This could also be because the particles were cleared relatively rapidly from circulation, mostly into the kidney and bladder, which raises further questions about the purity and integrity of the particles. In this light, the mention of nanoparticle assembly by a pharmacist may also be interpreted a necessity due to storage problems of fully formulated particles. Nanoparticle assembly is notoriously sensitive to even slight changes in parameters such as temperature, speed of mixing etc so that it would be preferable for the physician to just administer the drug without the need for prior handling. It is therefore unfortunate that results from long-term storage and robustness of the formulation method were not presented. Nevertheless, an enhanced cellular uptake through the addition of a ligand could critically increase the therapeutic index of a cancer RNAi Therapeutic, and the modular nature of the RONDEL system should easily facilitate such additions.

Our assessment that CALAA-01 was probably entered into the clinic too early naturally rests on the publicly available data only. The publication dates of the relevant data, however, strongly suggest that they indeed represent the relevant data points and considering the financial situation of Calando, it would not appear that much were to be gained by holding back on positive data. This is by no means to belittle what otherwise is very rich science. Unfortunately, it is here that the tension between corporate demands for advancing a pipeline and the need to sufficiently advance the science is most evident and in the end risks harming both objectives. Optimistically, completion and evaluation of the CALAA-01 phase I trial will allow for valuable insights into the performance of RONDEL delivery in man for the benefit of any follow-up programs. Without any such strong data, it is questionable however whether the promise of RONDEL as a differentiated and flexible platform for RNAi Therapeutics delivery alone will be enough to make Arrowhead Research a good RNAi Therapeutics investment.

PS: To expand on the latter point, Tobias and I also discussed that, in general, it is easy to caution against entering RNAi Therapeutics candidates into the clinic early and dismiss such as a move of desperation. On the other hand, the case can be made that, when it comes to RNAi Therapeutics as a broadly applicable platform, clinically evaluating candidates which for example would not be expected to effect large knockdowns can be justified in that the data coming out of these studies may provide timely data invaluable for follow-up programs using very similar delivery approaches. Although investors will rightly fear the costs of a failed trial particularly for small biotech companies, such data may be valued more highly by a potential Big Pharma partner. This argument receives added weight in an environment like now where it is very difficult to raise capital from the public markets, and partnering is the primary means for small biotech to obtain capital at acceptable terms.

Wednesday, November 18, 2009

Merging Antisense with RNAi Therapeutics to Create Fitter Companies

Yesterday’s long awaited data presentation on phase III results from ISIS Pharmaceutical’s lead antisense gene knockdown program was met by disappointment in the investor community: ISIS down over 15% on the day. While the exciting news is that the drug, mipomersen, looks like it is very close for approval for the severe, but very rare condition of homozygous familial hypercholesterolemia (hoFH) and importantly also possibly other forms of highly elevated LDL-cholesterol, part of the disappointment may be related to the long-term outlook on antisense for gene/mRNA knockdown: a 27% reduction in ApoB levels following 6 months of 200mg weekly injections with a safety profile (a number of cases of elevated liver enzymes, injection side reactions) that may be adequate for the severe cases of hypercholesterolemia, but not necessarily for less severe diseases. And this is for an organ, the liver, which has one of the best pharmacologies for antisense. Also, while a 27% knockdown may be therapeutic for a few targets, especially in metabolic disease, for most other targets it is insufficient.

Lack of high-quality gene knockdown opportunities would lead to an inefficient use of its capital that includes an enviable $600M+ cash pile and an equally remarkable cash-flow from their ‘satellite businesses’. Maybe partly because of this realization, but also of course because it believes that its IP is transferable to all areas it considers antisense, ISIS is not standing still and continues to innovate in areas such as RNAi Therapeutics and the promising gain-of-function antisense technologies of splice modulation and microRNA inhibition.

On the other side of the fence, RNAi Therapeutics is also facing a challenging investment environment. Capital is particularly difficult to raise for early-stage platform technologies. While some companies such as Alnylam, Tekmira, Sirna Therapeutics (historical example), and mdRNA are making good strides in establishing broad RNAi drug development platforms, this alone does not make up for lack of steady newsflow from mid- to late-stage clinical results that can support rich valuations in biotech. This is also not helped by some obvious mis-steps within the industry itself with the main sins being spending money on lawsuits and prematurely entering programs into the clinic, ironically not least in an attempt to keep investor interest levels high.

By merging with antisense, both the pipeline maturity profile could be enhanced and resources spent more efficiently by avoiding the temptation of entering programs into the clinic prematurely and otherwise weeding out programs that serve to artificially fill pipelines. The latter point, of course, would also apply to the antisense company, and the antisense company would further benefit from gaining access to the most potent and therapeutically promising gene knockdown technology known, RNAi Therapeutics. As the intricate relationship between Alnylam and ISIS Pharmaceuticals or the acquisition of Coley as a launch pad for Pfizer’s RNAi Therapeutics ambitions demonstrate, the scientific barriers for such mergers should be relatively minor. One risk, however, that cannot be ignored, particularly for those companies that have been built for sale, is that by combining various drug development platforms, the new entity may become a less attractive candidate for a Big Pharma acquisition. When it comes to mere survival, however, a combination should be the lesser evil.

I will now briefly discuss three fantasy combinations, at least one of which I would speculate to see within the next year.

1) Alnylam Pharmaceuticals and ISIS Pharmaceuticals (probably not within the next year). Without a doubt the most influential and potent leaders in RNAi Therapeutics and antisense, respectively. Already highly entangled through their IP cross-licensing agreements and microRNA therapeutics spin-off Regulus, a combination would create an almost cash flow-positive dream team with over $1B in cash, blocking IP, unmatched expertise in nucleic acid chemistry, clinical pharmacology, and RNAi Therapeutics. First revenues from the sales of mipomersen and continued IP licensing revenues would support a solid pipeline consisting of mipomersen label extensions, RNAi Therapeutics opportunities for liver and solid cancers, full ownership of the miR-122 program for the treatment of HCV, and transitioning antisense towards splice modulation, microRNA inhibition (with Regulus), and possibly other gain-of-function antisense applications. As part of the re-organization, some programs could easily be sacrificed without punishment by the markets. John Maraganore would be the CEO of the combined company, allowing Stanley Crooke to follow his passion in the science of oligonucleotide therapeutics.

2) mdRNA and AVI Biopharma (how soon?). The transition of antisense for gene knockdown to gain-of-function applications is most noticeable in the case of AVI Biopharma. After many years of attempting gene knockdown with their steric-block morpholinos, the company finds success in applying its technology for the modulation of gene splicing. It is considered the closest competitor to Prosensa’s Duchenne Muscular Dystrophy exon skipping program which has only recently entered an attractive $25M upfront plus multimillion bio$$$ milestone and royalty deal with GSK after a series of high-profile publications on DMD-related exon skipping. The partnership potential of AVI’s DMD program then as well as its recent capital raising should provide the needed capital cushion for the combined company to invest in RNAi Therapeutics for gene knockdown and some new splice modulation opportunities. mdRNA, of course, is scheduled to run out of cash early next year and it would be a miracle if the two companies had not contemplated such a merger, particularly after AVI Biopharma moved in as mdRNA’s neighbor not too long along up from Oregon. With AVI’s cash reserve, the combined company may then find it easier to attract platform partners for mdRNA’s technology further bolstering the financials.

3) Silence Therapeutics and Archemix (not really an antisense company, but close enough). It is almost two months now that Silence announced to be in reverse merger talks. Since then, however, not a word except for so-so news on the results of opposition proceedings at the EPO related to their core patent. What Silence needs is cash (who doesn’t?), and what it can offer is a phase I cancer program, RNAi Therapeutics drug development expertise, and an siRNA structure that is not without use, although facing very serious patent challenges. What Archemix needs with its growing pipeline is access to public markets as evidenced by a previously failed reverse takeover attempt with cash-rich NitroMed, as does by the way Quark Pharmaceuticals which should also be counted as a possible Silence Therapeutics merger candidate. The fact that Silence Therapeutics has some aptamer in its blood line and the increased investment by Archemix into aptamer-mediated delivery of RNAi (Dicerna) and microRNA (miRagen) Therapeutics should help a combined company find a common language. Until any such deal is announced, however, Archemix would have to be prepared though that yet another potential partner will walk away from it last minute as Silence Therapeutics should also be receptive to other offers.

Which one is the most likely combination? Add your vote on the right.

Friday, November 13, 2009

Cequent Pharmaceuticals to Enter Clinic with First Oral RNAi Therapeutics

Cequent Pharmaceuticals is somewhat of an oddity in the RNAi Therapeutics space. Neither does it use synthetic RNAi triggers, nor does it fit properly into the DNA-directed RNAi paradigm. Instead, it is based on the so called trans-kingdom RNAi (tkRNAi) technology where genetically engineered bacteria are utilized to both generate and deliver the RNAi trigger, particularly to areas where commensal bacteria occur naturally. This includes the epithelia of the gastrointestinal tract, skin, and urogenital areas. This differentiation then allowed it to become the first RNAi Therapeutics company to test an orally administered RNAi Therapeutic in the clinic. The candidate drug, CEQ508, aims to prevent the formation and malignant progression of polyps in Familial Adenomatous Polyposis (FAP).

FAP is a rare ('orphan') inherited disease in which mutation of the tumor suppressor APC gene initiates events that cause the growth of countless polyps that ultimately progress to become malignant by the age of 40-50. CEQ508 contains an shRNA that is targeted against beta-catenin which is the major mediator of APC-regulated signaling, and the knockdown of which should therefore delay polyp proliferation and development of malignancies. In the trial, 18 adult FAP patients will be given capsules containing lyophilized tkRNAi bacteria daily for 28 days. Of course, safety is the primary objective of this phase I trial, but beta-catenin levels will also be measured as an early biomarker for drug efficacy. A cute video from Cequent's website explains the technological approach of this trial much better than I could ever do here:

Let me say a few general words about tkRNAi. When I saw the seminal paper initially, years before my direct interactions with the company (disclosure: I have been consulting for the company), I was somewhat skeptical of the approach. One of the reasons was that bacteria are very complex systems compared to other RNAi delivery systems, which means that there should be an increased likelihood for causing off-target phenotypes. The other concern was that maximal knockdown levels in vitro appeared to be less than typically achieved with siRNAs and shRNAs. Since then, however, I have learned a little bit more about tkRNAi convinced myself that it indeed does knock down genes, and that at this stage a carefully chosen target could allow for clinical success at ~50-60% knockdown levels as observed in the CEQ508 non-human primate studies. As to the off-target effects, the tkRNAi products have been shown to be well tolerated in a number of animal models. In addition, I learned that Cequent was not the first to harness bacteria as therapeutic agents for the transfer of genetic material so that additional safety and mechanistic information is available already.

Because of the awesome powers of bacterial genetics I would expect that the speed and creativity with which specificity (e.g. engineering of targeting ligands; reduction of key components responsible for off-targeting; increase of the ratio of shRNA to bacterial RNA and DNA following release into cytoplasm etc) and potency (e.g. shRNA designs; co-expression of factors affecting shRNA maturation etc) can be increased should be quite considerable. On the other hand, with the recent fund raising, it will be the immediate focus of the company to conduct the phase I trial where it will gain first clinical experience with the system in the gastrointestinal tract, lessons from which should also be also applicable towards follow-up gastrointestinal applications such as the inflammatory bowel disease program it co-develops with Novartis.

Tuesday, November 10, 2009

Combining Forces to Understand RNAi Therapeutics Inside Out

This entry is first a PR on a business development of the blog itself, but also reflects what should be the next major value-driver in RNAi Therapeutics after the liver: solid cancers.

Solid cancers are a very attractive target for RNAi Therapeutics because of its unmet needs and because of the so called Enhanced Permeability and Retention (EPR) effect of solid tumors which means that it should be possible to target them with siRNA-containing nanoparticles. Getting there, of course, is only half the story. The particles need to navigate their way through the extracellular matrix of tumors, latch onto the cancer cells, be taken up, and then finally be released into the cytoplasm. This requires a good understanding of nanoparticle-related chemistry and physiology, the biology of the extracellular matrix of cancer tissues, and cancer cell membrane biology.

Enter Tobias Wolfram. I have known Tobias since my days studying biology in Heidelberg (10 years ago now!) and have since been impressed by his enzyclopaedic knowledge of not only biology, but also history, psychology, economics and what not. He spent much of his time as a teenager with science projects and in molecular biology labs and won national prizes, at a time I did not even know that PCR existed. Since then he has become a truly multi-discliplinary scientist spanning the subjects of biology, chemistry, and material physics. Right now, he is at the Max-Planck-Institute for Metals Research in Stuttgart, the home of German engineering, where Tobias employs precisely engineered nanometer-patterned substrates for studying the interaction of cells with the extracellular matrix and their use for cell-based diagnostics. I visited him there two weeks ago to talk about working more closely together on the topic of RNAi trigger delivery.

In an experiment, we have decided to combine his expertise in getting molecules to cells with my understanding of the molecular biology of RNAi inside cells, to hopefully provide more insightful blog entries on the topic of RNAi Therapeutics delivery, with an initial emphasis on solid cancers. With Calando, Alnylam, and Silence Therapeutics having active programs in solid cancers, we will, over the next couple of weeks, start by taking a look at each of the applied technologies.

Sunday, November 8, 2009

RXi Pharmaceuticals Appoints New CEO in Attempt to Become a Clinical-Stage Company

RXi Pharmaceuticals has been the perennial talent of the RNAi Therapeutics space with high potential based on interesting IP, a staff with solid backgrounds in oligonucleotides, and an impressive line-up of scientific advisors also with political influence, yet was never able to live up to its expectations of translating this into partnerships and therapeutic programs with imminent clinical relevance. It is then maybe not too surprising that following the resignation of RXi’s Chief Financial Officer and the appointment of a Chief Medical Officer not so long ago, the company has now also announced a new CEO in the form of Mr. Noah Beerman.

The general problem that I have seen with this company is its lack of focus. While in terms of RNAi trigger IP, the company has potentially valuable access to parts of Tuschl I (through a non-exclusive license from the University of Massachusetts) and shRNA/Dicer substrate-related Hannon patents and some Dicer-resistant, yet >24bp silencing dsRNAs, the portfolio lacks coherence. Maybe as a result, RXi has been all over the place with their RNAi triggers starting with dsRNAs less than 15bp, longer than 24bp, and the obligatory claim to single-strand RNAi, too. At the same time it seems to have conceded 15-24bp dsRNAs to the Kreutzer-Limmer and Tuschl patent estates largely owned by Alnylam, which leaves me puzzled as to what exactly their rights are to Tuschl I, something that Merck paid $1.1B for in their Sirna Therapeutics acquisition. In the absence of better disclosure and the trend of ever decreased emphasis on Tuschl I, I have to suspect that these rights are very limited in scope, including limited or non-existent sub-licensing rights. Investors apparently feel the same, since access to even just areas like the liver, oncology, or metabolic disease alone could be worth well North of RXi’s current ~$30M market cap, especially if Tuschl I ends up further encroaching onto Tuschl II.

Being satisfied with second-choice, the re-invention of existing technologies, or somewhat questionable claims appears to be also the case for RNAi delivery. Orally delivered GeRPs particles are one example. While the idea of turning the natural tendency of nanoparticles to be taken up by the phagocytic system from a nuisance into a therapeutic opportunity is a promising one and ought to be further pursued, looking at the actual publication leaves me with lots of questions and maybe explains why the company would not advertise these what appear to be at face value revolutionary findings with more vigor. What it does advertise though is their ‘self-delivering rxRNAs’ which promote gene silencing in vitro in the absence of additional transfection reagents, albeit at concentrations often as high as 1uM. This high concentration coupled again with an unwillingness to disclose more about the technology and RXi’s ties Dharmacon which distributes the Accell siRNA-conjugate technology, makes me suspect that these are variants of the lipophile-siRNA conjugation idea pioneered by Alnylam and published in Nature in 2004. From a scientific perspective, what is interesting though and was shown at RXi’s recent Analyst Day, is that for current siRNA-conjugates, the benefits of delivering in vivo shorter dsRNAs may indeed outweigh their potency disadvantages compared to the traditional ~21bp siRNAs.

Like a number of other RNAi Therapeutics companies, it has been the ambition of RXi to compete across the platform rather than focusing on key enabling technology development and a path towards the clinic. If GeRPs and the self-delivering rxRNAs were indeed so revolutionary, why not just work and capitalize on these similar to what Tekmira is doing in liposomal delivery? Formulating a coherent strategy may also mean that you have to source technology from all over the world, rather than depending on the medley of innovations coming out of UMass and Dharmacon. It may be the more outward-looking nature of mdRNA which enabled it to rapidly move past RXi with much less to start with. On the other hand, the close relationship of RXi with UMass and the State of Massachussetts carries with it significant benefits for its financial position which with ~$10M in cash otherwise would look quite dire. With this cushion, it should be possible for the new CEO to build a company with real clinical relevance partnering appeal.

Wednesday, November 4, 2009

Alnylam and Roche Renew Their Wedding Vows

When Alnylam essentially reminded us today Roche to be still interested in RNAi Therapeutics after having spent close to half a billion dollars on the technology, it caused a lot of anxiety in the RNAi Therapeutics investor community. The impression was that surely something must be wrong when the company chooses to issue such a PR just before it was about to host the company's Q3 09 conference call where everybody expected to get a no-nonsense update on management’s previous guidance, some considered it a promise, for 2 or more major deals by the end of the year. As an investor of Elan Pharmaceuticals, I am all too painfully aware that press releases right before or after conference calls/annual meetings to either soothe or avoid analysts’ wrath, respectively, never bode well.

Almost thankfully, what came then just confirmed that the timelines for the deals have been extended into 2010, rather than news of a clinical trial fiasco which I almost came to expect. ALN-VSP02 continues to enroll which is very good news for SNALP delivery for which I have high hopes for being the next major RNAi Therapeutics value driver, and the TTR program also using SNALP technology is on track for IND filing later this year (although the company does not plan to provide an update at the time of filing). As an armchair analyst, I have to say that this, whether pre-defined in the Roche agreement or not, very much came across as an attempt to deflect disappointment on the changed guidance, and that this was one of the occasions where a PR hurts more than it helps. Overall, I am glad, however, that Alnylam is not going to put itself in an adverse negotiating position, when it financially does not have to, and is going to announce ‘the right partnership at the right time‘. Silence Therapeutics and mdRNA for which we are still waiting to hear on deals e.g. do not share the same luxury.

On the positive side, what I hope today's turn of events signaled is a new emphasis on technology and product development rather than just IP monetization. The repeated mentioning of collaborating on specific disease areas by combining Alnylam’s RNAi platform expertise with Roche’s disease expertise is therefore positive. Also, the fact that the two companies will share access to their respective delivery technologies shows the commitment of Roche for its partner and RNAi Therapeutics. Just how much Alnylam had to pay for this in terms of being restricted of partnering programs at a later stage, however, remains to be seen. Ideally, Alnylam would build such capabilities in-house.

This was followed up in the call with more clarity on Alnylam’s lead program for RSV infection with a potential registration-type trial for RSV infection of lung transplant patients slated to start early next year (ALN-RSV01 now developed without Cubist, but with opt-in) following encouraging phase II data from a small trial earlier this year, and a second-generation, chemically modified ALN-RSV02 to be jointly developed with Cubist for the pediatric population both of which appear reasonable decisions from my perspective. Talk about successful chimp data at microRNA therapeutics spin-off Regulus for the anti-miR122 HCV infection program was also notable.

In a little bit more than two years, Roche has become a very strong force in RNAi Therapeutics rivaling the capabilities of Alnylam, and a company that has shown to have its own mind. It now has dedicated operations in Kulmbach, Germany, which used to represent half of Alnylam’s practical capabilities; Wisconsin, after snatching away Mirus for $125M and which should form a strong basis for their RNAi delivery efforts; and Nutley where it conveniently houses both centers for metabolic and oncology operations, coinciding with the areas where RNAi Therapeutics is poised to create most value near- to midterm, together with work on RNAi Therapeutics. It also had the luxury of exploring mdRNA’s RNAi IP after having paid Alnylam $300M for what appears to be essentially the same, and will be restless on other RNAi Therapeutics business development fronts as well. Importantly, it recently announced plans to move an RNAi Therapeutic candidate into the clinic in 2010.

I believe that it must be extremely challenging to navigate a potentially revolutionary technology for medicine such as RNAi Therapeutics through to fruition and reap the financial rewards along the way. Scientific progress over the last 8 years since the discovery of RNAi in mammals has been more than satisfactory with real drugs based on RNAi Therapeutics conceivable now. Just think back 4 years ago, when 50mg/kg cholesterol-siRNA conjugates in mice were considered the gold standard compared to today’s near microgram/kg SNALP, sometimes also referred to as LNPs; or the steep learning curve about siRNA-triggered immune stimulation, and only Alnylam out of the many contenders has managed to build a financially strong operation. Much of this clearly has to be attributed to management skills and a wise BOD. But shareholders tend to be a restless bunch, always afraid of a stumble that can wipe out all that’s been built and would like to be taken for adults. I believe today’s events leave a certain credibility gap which could be corrected by either removing the poison pill which I believe has served its purpose by now, or insider purchases of the stock. With the share price in the mid-17s, they might actually profit from the situation, too.

Correction (11-05-09): When re-listening to the conference call, I noticed that with respect to the chimp anti-miR122 HCV data Alnylam was not referring to work done by Regulus, but that of others, i.e. almost certainly Santaris/Stanford. After the recent emphasis on additional anti-miR122 patents issued to Regulus, I expect further tension arising as a result of Santaris' scientific leadership in the area, while Regulus appears to have the stronger IP.

Update-1 (11-05-09): February 2010 was mentioned in the conference call as the (presumably Tuschl II) trial date. This, and upcoming SNALP data, could be good reasons why deals have been delayed, in addition to the macroeconomic environment.

By Dirk Haussecker. All rights reserved.

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