Wednesday, July 14, 2010

AstraZeneca Shows Continued Commitment Towards RNAi Therapeutics through Partnership with Silence Therapeutics

One week after announcing the grant of a US patent covering RNAi triggers with enhanced guide strand loading, Silence Therapeutics today announced the one-year extension of its R&D collaboration with AstraZeneca for the ‘identification and optimization’ of five siRNAs targeting genes involved in cancer and respiratory disease. This relationship dates back to 2007 when AstraZeneca paid Silence a 7.5M pounds Sterling technology access fee plus the usual potential for future fees and milestones. After similarly extending and expanding relationships earlier this year with AstraZeneca and Dainippon Sumitomo in RNAi delivery, Silence Therapeutics has met important partnership goals earning it time to now prove to the investor and pharma worlds that its merger with Intradigm also brought with it technological synergies.

The way I read the AstraZeneca extensions is that Silence Therapeutics was certainly able to convince AstraZeneca that it is a RNAi Therapeutics company with scientific credibility, but that AstraZeneca still needed extra time before it could fully commit to Silence Therapeutics. It is interesting to speculate that AstraZeneca was a major force behind the Silence Therapeutics-Intradigm merger, as Intradigm had filed for a number of patents covering siRNA sequences against cancer-related as well as inflammatory targets also useful for respiratory diseases. Some of these have actually started to issue and may come in handy for this siRNA-specific collaboration [update: the company informed me that the Intradigm RNAi triggers would not be part of this collaboration, and re-confirmed that the RNAi trigger and delivery collaborations are separate. Sounds to me like they are holding back, possibly hoping to monetize some of these assets on even better terms to another potential licensee or as part of a larger collaboration with AZ eventually].

As to the targets, I could imagine that, based on the unmet need and AstraZeneca’s interests, RSV infection, asthma, COPD, and solid cancers esp. primary liver cancer are among them. Of note, mdRNA announced earlier this year an early collaborative effort with AstraZeneca China for studying that company's liposomal delivery technology for liver cancer, and today’s press release mentioned that AstraZeneca's Chinese R&D branch was part of the Silence collaboration, too. Since Silence Therapeutics appears to be keen to emphasize that the siRNA and delivery collaborations are separate- scientifically not necessarily the most sensible approach, but a deficiency that may open up the prospect of a more lucrative arrangement in the future- it is certainly an interesting thought if Silence’s siRNAs were to be formulated in mdRNA’s liposomes. Of course, it is more likely that mdRNA and Silence compete with each other for AstraZeneca China’s favor in liver cancer, but still...

As I said, it would eventually make a lot of sense to consolidate the two efforts, siRNA and delivery, into one larger collaboration. Based on Silence’s own data, I am fairly encouraged that its lipoplex-siRNA formulations could be generally useful for knocking down genes in the vascular endothelia, which not only would be of obvious relevance for cancer, but also lung disease which often involves vascular escape and infiltration of the lung by inflammatory cells. An alternative approach to siRNA delivery to the lung is, of course, by inhalation, desirable e.g. for RSV infection involving lung epithelial cells, although Silence hasn’t reported much progress in that regard. It remains to be seen what Intradigm's technology can add to that.

Ultimately, I consider today’s extension a major de-risking event for the near-term health of Silence Therapeutics. While much remains to be done, the stock at 5.5 pence and a market cap of little over $20M is simply too cheap, if not an insult to RNAi Therapeutics in general. It is especially encouraging that AstraZeneca shows continued interest in RNAi Therapeutics, a company that I honestly had at the bottom fifth of Big Pharma companies willing to embrace cutting-edge platform technologies to once again efficiently develop drugs that make a difference. Unless their goal is to buy back all their shares and eventually liquidate operations or become consumer healthcare companies selling diapers and skin lotions, realistically, it is their only way forward.


Anonymous said...

Dont forget AZ bought MedImmune

Dirk Haussecker said...

Good point. However, do we know how much of that was driven by AZ's desire to innovate their drug development, or to buy sales growth at a premium as seems to be the main motivation in many of these acquisitions. Access to monoclonal antibodies can be had for considerably cheaper. I acknowledge though that their previous purchase of monoclonal antibody company Cambridge Antibody Technology reflected their will to innovate (came at much lower price point). But when I listen to their presentations, their outlook is one of the most 'risk-averse' ones among their peers.

Anonymous said...

I dont have the numbers here, but my impression from others that have looked at it more closely was that the acquisition was a bit of both. The price paid was too high to relate to buying sales... too high whatever some would say. The acquisition was said by commentators to be about long-term focus, so presumably fitting with CAT's capabilities in terms of target identification and biologics development. It was also about vaccines though.

AZ suffered quite a few set backs over recent years, so it fits that they're a) seeking to lessen risk and b) trying to give the impression at investor days of not being too risky.

Like Sanofi and other pharmas, AZ is moving to externalise R&D. So, the lack of exciting products may be dampened somewhat by further deals.

It would be interesting to know what AZ could acquire Silence for at the present time. From memory, the Intradigm shareholders are on an average of 40p/share. They'd perhaps not expect to get all that back.
To remove any need to pay milestones on product development, gain Atu-027 and other proprietary products, gain a share of Pfizer/Quark payments, the Zamore IP that it would be able to enforce.... an acquisition wouldnt seem out of the question?

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