Tuesday, March 16, 2010

The Pfizer-Tekmira Deal: More than Meets the Eye?

In yet another sign that interest in RNAi Therapeutics Big Pharma is picking up again, Tekmira today announced the initiation of a research collaboration with Pfizer focused on its SNALP siRNA delivery technology. This trend follows a number of proof-of-concept studies over the last year not only in non-human primates, but increasingly also in Man, which in aggregate are allaying much of the concerns caused by the findings that non-specific, innate immune responses had been responsible for a number of early RNAi in vivo study results (see study and review by Tekmira scientists).

In Tekmira, Pfizer is certainly choosing a leader in the development of RNAi into a clinical reality, and despite the early stage of this relationship, this could harbor the seeds of much more to come. This is not only because the two research teams should be a good cultural fit, but also because Tekmira could become a central piece in Pfizer’s strategy of RNAi Therapeutics as a platform. Sure, Pfizer has been active with a number of deals in the space, including an eye disease collaboration with Quark and a DNA-directed RNAi approach for HCV with Tacere, but following its acquisition of Coley as the launching pad for RNAi Therapeutics, it has yet to decide on where it will get the fundamental IP from in terms of RNAi triggers and also has not committed yet to any particular delivery technology. Given this delay, I have therefore come to believe that Pfizer may pursue a strategy that includes a concerted move in both trigger and delivery.

It is no secret that there is a certain tension in what Tekmira feels it deserves from Alnylam, and what Alnylam is willing to pay. Clearly, SNALP delivery must have accounted for a significant part of the financials Alnylam achieved in the Roche and Takeda platform alliances. One important corporate development goal of Tekmira is therefore to create enough know-how and IP that Alnylam does not control so that Alnylam cannot take it any more for granted, and with more options create best shareholder value. Pfizer could be Tekmira’s white knight because it is also fair to assume, as evidenced by the persistent patent oppositions by Pfizer against Alnylam especially in Europe, that Pfizer would prefer not to pay Alnylam $300M upfront for a platform license. What better way to gain leverage over Alnylam than by building a relationship with Tekmira on whose technology Alnylam has build so much of its pipeline and business development?

The main reason why Tekmira does not sport an RXi-like $100M market cap, despite vastly superior enabling technology and financials, is because it does not claim to have proprietary RNAi triggers. One could therefore argue that if somebody like Pfizer decided that it did not need Alnylam’s RNAi trigger IP, combining Tekmira’s SNALP technology with an RNAi trigger workaround solution (e.g. blunt-ended siRNA’s depending on the Tuschl outcome) would create synergies that would easily justify a Mirus-type price tag for Tekmira. Given the recent impressive share price performance of RXII, I would not want to exclude that RXi Pharmaceuticals could feature in this equation.

One way of interpreting today’s news is therefore as yet another important validation of SNALP technology by a Big Pharma, all the more important since with Pfizer SNALP’s potential technology risks have passed the most critical smell test, innate immune activation and liver toxicity (Coley and Tekmira’s precursor Inex used to compete on TLR therapeutics), but with modest immediate financial implications. Behind hit, however, could be the beginning of the end of Tekmira as we know it. With the platform adoption option date coming up, Novartis may also want to have a say in this.

15 comments:

Anonymous said...

"It is no secret that there is a certain tension in what Tekmira feels it deserves from Alnylam, and what Alnylam is willing to pay."

Is this an acknowledged fact, or just speculation on your part? As of right now, the only deals with significant financials that Tekmira has concluded has been with Alnylam and its partners. They seem to have a close working relationship (e.g., collaborating on further improvements to the SNALP/LNP platform), and yet in a number of postings you've mentioned this "tension" that supposedly exists between them. Are you sure your holdings in TKM stock aren't coloring your interpretation of things and your view on what you feel Tekmira feels they deserve? Or has their management communicated such to you?

Anonymous said...

Dirk is speculating; there is no such tension.

Anonymous said...

Where's the disclaimer you once had about your Tekmira stock holdings? Did you sell? Or do you prefer the audience not be aware of this fact? You need to be up front.

Dirk Haussecker said...

I am surprised that the notion that there is some tension in the Alnylam-Tekmira relationship should be that controversial. Tekmira is an important component in Alnylam's strategy of locking up the space, while Tekmira would be better served by having more options. I don't think that's rocket science.

Anonymous said...

TKM the stock would certainly benefit (short-term) from having more options. It's an open question whether Tekmira the company would benefit by taking a more adversarial stance toward their most important partner/collaborator, however (at least if they're not looking to sell the company). With phrases such as Alnylam taking Tekmira for "granted," Pfizer riding in as a "white knight," and the "beginning of the end of Tekmira as we know it" you seem to suggest that the relationship is an oppressive one that Tekmira is looking to get out of (as well as engaging in what I believe is some rather unfounded speculation). This is perhaps obvious, but the ALNY/TKM collaboration is not just a one-way street.

I happen to own stock in both companies, although I own more ALNY shares, and perhaps that is influencing my opinion here. But the ALNY/TKM relationship has been very fruitful scientifically so far and has Tekmira well-positioned in the field. If their market valuation is somewhat disappointing, that is something that time and clinical success will address.

Dirk Haussecker said...

I don't contest that the Alnylam-Tekmira relationship has been quite fruitful scientifically and they are able to communicate and execute on their collaboration goals very productively.

However, as you might be aware, biotech is a race against the funding clock, and while Tekmira's management has done a tremendous job in minimizing dilution over the last 2 years, $3M here and there will not be enough to unlock the full potential of SNALP delivery, especially for shareholders.

In the deals that Tekmira got so far, delivery has always been treated as a step-child compared to the RNAi trigger load. In my opinion, given the unmet need in the field at least a 50:50 is appropriate, if not one that is slanted towards delivery. As an Alnylam shareholder I would be ecstatic that Alnylam had been able to extract from Tekmira the deal terms it did. It was also largely the result of an old Tekmira that owned important intellectual property, but had no money while Protiva had much of the know-how. Maybe as a result of this, it is my impression (not informed by Tekmira mgmt or the likes) that Alnylam has taken Tekmira a little bit too much for granted while its value to the market, including strategically, has steadily increased.

Anonymous said...

Hi, Dirk
Unrelated to this post, I am curious about single strand RNAi, why is it less efficient than dsRNAi? Any new research on its potential and what's your opinion? Thanks!

Anonymous said...

And the Coley acquisition had ZERO to do with RNAi, as the Coley IP estate had ZERO RNAi coverage, and no delivery capabilities. The Coley acquisition was the logical furtherment of Pfizer's moves into TLR biology, for which it had already partnered with Coley.

Dirk Haussecker said...

Coley...simply google for 'Pfizer RNAi' to find out more about the relationship of Coley and Pfizer's RNAi efforts.

ssRNAi vs dsRNAi...it is well documented that on a molecule basis, dsRNA is much more efficiently recognized as a substrate for RNAi than ssRNA. In nature, ssRNA is only an intermediate, not the inducer of RNAi.

Anonymous said...

I am still flabbergasted by TKM's inability or naivete regarding a NASDAQ listing. The stock would be $3.00 as I see them with the best delivery mousetrap out there.

Dirk, have you ever breached the subject with the company??

They have no U.S. coverage and they are always in the States presenting.

Anonymous said...

The double strand unwind when loaded in RISC or prior to incorporating into RISC? If ds is much better, what are the new findings that drive ALNY and ISIS to the ssRNAi direction? Also, what you think about moving into immune cells? Very curious, thx!

Anonymous said...

Hi, appreciate any thought on the broad range of efficacy from the Lancet mipomersen study in hoFH patients? For some, the drug has no or little effect, any explanation? Thanks a lot!

Dirk Haussecker said...

A US listing...maybe after the next large collaboration is formed?

Not sure what Alnylam's-ISIS' latest ssRNAi results are, but I would expect that research will lead to more effective chemistries facilitating ssRNA loading into the RNAi RiSC complex.

The Lancet studies...looking at the placebo data, it seems that LDL-cholesterol levels are inherently quite variable over a half-year period. Patient weight could be another factor, given that the 200mg dose is where the dose-response curve starts to become steep, although the trial design somewhat took into account patient weights (160mg for those <50kg)

Anonymous said...

"The Lancet studies...looking at the placebo data, it seems that LDL-cholesterol levels are inherently quite variable over a half-year period. Patient weight could be another factor."

If patient weight were a factor one would expect it to have been picked up in the initial multivariate study.

Very unusaul indeed to see a LDL percentage change from baseline ranging from 40% to -30% in the placebo group.

Anonymous said...

A Pfizer deal is a kiss of death. The last one laid fallow was Medivation. Gotta be afraid for TKM. Of course its more like Pfizer's uncanny ability to home in on losers. But just maybe they made a mistake this time.

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