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.

2 comments:

Anonymous said...

Speaking of new CEOs, it is also noteworthy that Rosetta Genomics appointed a new CEO last week.

Prior to being appointed CEO of Rosetta, Ken Berlin (45) served as worldwide General Manager at cellular and molecular cancer diagnostics developer Veridex, LLC, a Johnson & Johnson company.

This move has to be welcomed by Rosetta's shareholders, who often perceived the company's management (unlike its science) as somewhat inexperienced, as demosntrated, for example, by the unusually weak expectations management as regards the commercialization of Rosetta's 3 tissue based tests and the revenues therefrom.

Martin

Dirk Haussecker said...

Hi Martin- It almost seems natural that at different stages of a company you require different managements. I feel that this was also the case for Rosetta and that getting a person with more commercial experience in cancer Dx was the right move, although a year or two earlier would have made the transition smoother. I’m curious whether the new CEO will continue to place this heavy bet on the colorectal cancer screening Dx which with the recently disclosed difficulties appears to have become an even more risky strategy. I also have the impression that Rosetta has, at least publicly, neglected the opportunity to develop microRNAs as companion Dx. Maybe Mr Berlin will find a partner for that in somebody like Roche/Genentech.

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