Thursday, December 3, 2009

RNAi Therapeutics 2010: The Year of the SNALP

While the broad markets have enjoyed a considerable rally since the lows earlier this year, with the S&P500 up more than 65% since March, shares in RNAi Therapeutics companies have only initially participated, but then reversed course. This is unfortunate since this does not make establishing a broad drug development platform any easier with no products on or close to the market. I want to be clear though that one cannot blame it all on a market that 'does not get it' or just bad luck: strategic mistakes have been made, false expectations raised to a point that the market, and this might include Big Pharma, is saying ‘show me credible non-human primate, or even better, human data before I believe you’.

On the other hand, chaos brings with it opportunities, especially for companies that can emerge from this confusion with pre-clinically well-validated technologies and unambiguous proof-of-concept data for therapeutically relevant gene knockdown in humans. A lot will therefore depend on whether a single delivery technology, SNALP, can achieve such results. Results from both SNALP-ApoB (Tekmira), expected at the end of Q1 2010, and ALN-TTR (Alnylam) later in the year, provide opportunities for demonstrating efficacy in relatively small patient populations. Safety, of course, will be equally important to watch.

There are other RNAi Therapeutics candidates in the clinic among which maybe Benitec’s HIV program may provide molecular indications of antiviral activity with the rHIV-shI-TAR-CCR5RZ triple RNA(i)Rx combo. Cancer-related clinical results will mostly focus on safety, although ALN-VSP02 results could go into more mechanistic depths. Quark Pharmaceuticals’ candidates, of course, are far ahead of the field- sometimes I ask whether possibly too far ahead in light of what we have learned about the uptake of naked siRNAs and innate immune stimulation. Beyond RNAi Therapeutics, progress with mipomersen, DMD exon-skipping, and miR-122 inhibition for the treatment of HCV could help return optimism to RNA therapeutics drug development in general.

Taken together, I believe that 2010 could indeed be remembered as the RNAi Therapeutics Year of the SNALP, although it is always possible that a MEGA-deal, possibly inspired by the ApoB-TTR results could divert some of the immediate attention. Some of you may remember that I called out 2008, also for reasons related to SNALP, as the RNAi Therapeutics Year of the Liver. I still believe that this would have been possible if the attention had been focused properly on the exciting development path of this technology for liver applications some of which are now entering the clinic, instead of the somewhat broader messages the market received and is now struggling to cope with. After SNALP, cancer is a strong runner-up, and may in fact drive some of the major business developments of 2010. 2011 or 2012 may be the RNAi Therapeutics Year of Cancer outright.

Given my obvious fondness for liposomal delivery and to stay on top of the exciting scientific developments in this area, e.g. targeted delivery, I am already looking very much forward to be attending the annual International Liposome Society meeting in London next week. All the while next door Cancer RNAi Therapeutics company Silence Therapeutics, which also works on somewhat related lipid-mediated siRNA delivery, should be discussing their merger at the General Meeting and is just one more reason to go.

RNAi Therapeutics Portfolio Update

As we approach the New Year, I decided to take a look at the RNAi Therapeutics portfolio and finally take out gene therapy company Oxford Biomedica. This is not because I have lost faith in gene therapeutics, recent clinical data strongly suggest otherwise and the ocular/neuro applications approach that Oxford Biomedica takes, also in partnership with Aventis, should make this one of the companies in the field to watch. Oxford Biomedica, however, has done too little in RNAi Therapeutics drug development to justify its place in the portfolio. I still wonder how ocular DNA-directed RNAi Therapeutics for example could be institutionalized- maybe as part of a more general gene therapy company such as Oxford Biomedica, or an eye-focussed RNAi Therapeutics company employing both synthetic and ddRNAi techniques. Maybe even packaged into a re-formulated Targeted Genetics, yet another company that provided clear gene therapy clinical efficacy data for a rare eye disease. Until more strategic clarity is provided, however, including their continued interest in RNAi Therapeutics or not, I decided to sell some of TGEN as well.

The proceeds from these sales were put into ISIS Pharmaceuticals whose shares I believe have been oversold in the wake of the somewhat lukewarm phase III homozygous FH mipomersen results. Considering previous clinical results obtained with mipo as well as the overall favorable lipid profile changes as a result of ApoB knockdown, chances are that the upcoming phase III results in the other severe hypercholesterolemic populations will look better and signal the start of the manic phase of the manic-depressive mipo story.

Otherwise the portfolio should be well exposed to the potentially major value creating force in RNAi Therapeutics 2010 with Tekmira now making up the largest position in the portfolio, largely the result of the relative weakness in ALNY (-40%). Silence Therapeutics should warrant a re-evaluation after they make public their merger partner. AVI Biopharma remains on the radar for their involvement splice modulation (DMD foremost) and other areas that could provide them with near-term revenue, especially if they should move closer with mdRNA which could make for an attractive combination. Just fresh from the press is also the announcement that ISIS Pharmaceuticals will play a more active role in splice modulation.


J. Maguire said...

It appears this RNAi portfolio is a paper exercise. Do you invest in publicly traded RNAi companies and, if so, which ones do you presently own? IMO, you should disclose your personal RNAi holdings with each blog you write. Sincere thanks, though, for sharing your well-informed perspective on this technology and the companies involved in RNAi!

Dirk Haussecker said...

You definitely have a point and I will think about to what degree I can change my disclosure policy. As most of you will understand, however, I have no interest in fully disclosing my personal finances on the world wide web.

The portfolio right now provides an opportunity to summarize and capture some of the dynamics in the space. As a result, the portfolio comprises about 10 companies, while personally I would own a much smaller selection of those.

One problem with the portfolio right now is that I do not update the portfolio whenever I personally would buy/sell a share as I do not want this blog to be a stock trading blog, rather a finger in the wind of RNAi Therapeutics. Especially during my absence from writing the blog, there have been many events that would have required a re-adjustment of the positions. However, when I do update it, then I do my best for it to reflect my personal thinking and decisions, although typically not with the decisiveness as I would typically do for my own purposes. However, this does not mean that I am happy/OK with the performance of this portfolio, but I also believe this reflects the difficulties the sector went through in the last 2 years.

I have always dreamt about starting an RNAi Therapeutics fund. One day, who knows, it will become a reality.

James Taylor said...

Great post. Have you previously posted, or what's your take, on targeting siRNA to non-hepatocyte targets using nanoparticle carriers? When and who will be the leaders?

Dirk Haussecker said...

James- It is probably too early to tell who will emerge as the leaders in systemically targeting non-hepatocytes with nanoparticles/large conjugates. Mirus/Roche's DPCs may have applications beyond hepatocytes and seem to be fairly advanced. Also some contenders like SNALP can deliver siRNA outside hepatocytes, but do not entirely avoid them.

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