Thursday, July 29, 2010

Marina Biotech Continues to Drive Sector Consolidation, Acquires Novosom’s Liposomal Delivery IP

Marina Biotech, formerly known as mdRNA, continues to snap up assets in the oligonucleotide therapeutics and diagnostics space, this time acquiring the liposomal delivery IP from Novosom, a privately held drug delivery company based in Germany. This comes only a week after shareholders approved mdRNA’s merger with tkRNAi company Cequent Pharmaceuticals to form Marina Biotech. It will be curious to see whether Marina’s strategy of challenging Alnylam's industry-leading position by taking advantage of the depressed market for oligonucleotide therapeutics will succeed in luring Big Pharma and pay off for shareholders. The investment this time: $5M in newly issued stock.

Similar to Silence Therapeutics, Marina acts on the premise that in order to capture those lucrative partnerships, being able to provide a choice of delivery technologies, plus some claims in RNAi triggers, too, is key. This, of course, is in contrast to Tekmira’s so far quite successful strategy of doing one thing very well, meaning clinically maturing and expanding the applicability of its industry-leading SNALP delivery technology and avoid some of the deal frenzy and dilution of effort.

By the looks of it, Novosom has to be considered one of the more bona fide delivery companies. Similar to Tekmira’s SNALP, Novosom’s SMARTICLES can change their surface electrical charge and therefore reconcile (serum and storage) stability with endosomal release functionality. Unlike SNALPs, however, these liposomes also contain anionic lipids, in addition to cationic and neutral lipids, and do not employ PEG stabilizers. This stability can be attributed to the negative charge of SMARTICLES at phyisiologic pH which ought to avoid various interactions with host factors and resulting toxicities often associated with positively charged lipids. However, as the pH acidifies upon endosomal uptake of these particles, they become positively charged and competent for membrane disruption and cytoplasmic release. For similar reasons, ionizable SNALPs as practiced by Tekmira not only employ PEGylation, but are also essentially uncharged at physiologic pH.

In terms of IP, from the looks of it, Novosom has assembled a respectable IP estate with various fairly broad patents granted also in the important US market. This should provide Marina with considerable options to leverage its other liposomal assets, trp-cage targeting technology and amino acid-derived lipids, that I have felt lacked robust patent protection when used in liposomal formulations similar in composition to Tekmira’s SNALPs.

Theory and IP, of course, are only part of the equation. In terms of actual data, the literature bears out the tolerability of these liposomes. In terms of in vivo knockdown efficacy, I haven’t really seen much for liposomal delivery of siRNA in the peer-reviewed literature. There was, however, a paper on the liposomal delivery of a CD40 antisense oligo (under license from ISIS) in a rodent inflammatory disease model and that supported specific CD40 knockdown and disease amelioration while the unformulated antisense oligo appeared to be inactive. In general, based on the literature and also Novosom’s website, their technology seems to be in the late rodent stage and yet to be validated in larger mammals including non-human primates and Man.

There should, however, be an open IND for the delivery of a DNAi compound (no mis-spelling) by PRONAI which makes use of Novosom’s technology. However, it appears that PRONAI’s funding situation may have delayed actual dosing.

Novosom also entered into at least 2 collaborations with RNAi companies. One with (now defunct) DNA-directed RNAi company Nucleonics for treating hepatitis viral infections, and one with Boehringer-Ingelheim for the validation of drug targets in the liver and lung. Again, because Novosom is a private company I can only speculate whether the lipids used by Nucleonics in their soon aborted phase I study stemmed from the Novosom collaboration. Similarly, the status of the Boehringer-Ingelheim collaboration is unclear to me. Who knows, but maybe Boehringer-Ingelheim is actively looking for (liposomal) delivery and triggers for the development of RNAi Therapeutics, which raises another point: although the press release did not specify this, but selling what looks like the entire IP estate would appear to be tantamount to selling the entire company, existing partnerships and programs included.

But back to the fundamental question: Consolidating into a one-stop-shop, almost an ‘anti-Alnylam’, a la Marina and Silence versus technological deep-dive a la Tekmira- which strategy will create more shareholder value? The next 3 months should provide for some of the answers.


Please let your voice be heard and vote on the right.

9 comments:

Anonymous said...

Dirk,
Thanks for the new blog entry re; Marina Biotech. That was much more than I had expected. I will post a link to your blog over at yahoo. Hope you don't mind. Joe/Miami Beach

Dirk Haussecker said...

Joe,

That's fine. The reason though I did not respond to your earlier inquiry is that in some cases such inquiries don't come from retail investors or other generally interested people like you appear to be one, but in disguise from those that write reports on RNAi Therapeutics companies that are then sold for good money to 'traders', often of the short/parasitic type. Especially with broad questions it can be difficult to tell.

Anonymous said...

Dirk,

There is an saying, "You can learn more about a person from what he asks, than from what he says."

I found the question you posted on the survey, telling.

Most recently, you appear to be a strong proponent of the technologies and general investment prospects of Alnylam and Tekmira; however, clearly you are debating the value proposition of the one-stop-shop business model, also.

I am very curious, for companies that you categorize as one-stop-shops, which specfic companies would you rank #1 and #2 for technology and investment prospects?

Further, if I now asked you to rank Alnylam, Tekmira and these two other companies - what ranking order would you come up with.

I know I am posing a challenging question as I haven't provided specific definitions of "good technology" or "good investment" prospects... and I know a good investment for one person, might be a terrible choice for another; however, consider the same investment thesis you have used to arrive at the value proposition of Alnylam and Tekmira, and apply to all four companies.

Thank you in advance.

Dirk Haussecker said...

I believe all 4 companies deserve a look here.

Clearly, as most readers here will know very well, my favorite company both investment and technology-wise is Tekmira- and it has been like this for the last 2 years. With the industry's most advanced delivery technology, essentially allowing for knocking down genes at will in the liver and increasingly also in other tissues and disease states, Tekmira is in an excellent strategic position in most regards. If you have read the papers and patents by Tekmira and their collaborators, I don't know how one cannot be excited about the future of the company and what it could do for human health. Couple this with one of the most attractive financial gearing in the small biotech space, an $80M market cap is very attractive to me.

Alnylam at $15 is clearly attractive, too, but probably with a more limited upside than Tekmira near to midterm. Simple gravity. Although Alnylam also practices SNALP quite extensively and is getting better and better at target picking, the business model is more capital intensive/aggressive than Tekmira's which is something that Alnylam ought to look out for. The prospects for clear clinical knockdown results from their TTR and PCS programs plus Novartis and maybe another $100M+ deal should put the share price back on track.

Silence and Marina...probably worth wetting the feet at this point. I've personally been adding Silence Therapeutics over the last couple of weeks because of progress on the IP front which should increase their leverage in partnership negotiations and contentious relationship with Alnylam. The lipoplex delivery data looks promising although by far not as extensively validated as Tekmira's SNALP. So before increasing my position, I will wait for more scientific validation in the literature. The risk is clearly very high, but so should be the upside. A $10M upfront deal should probably more than double its share price (market cap only $20M with about a year of cash runway). I think it is not totally out of the question. I treat it as an attractive LEAP option, or a hedge on Alnylam because all these companies are vying for collaborators.

In the case of Marina, I'd need some more time to digest the recent deal flurry, its impact on its financials and scientific strategy.

Anonymous said...

Thank you for your commentary re: Tekmira, Alnylam, Silence, and Marina...

Can can you provide your view of ISIS?

Anonymous said...

Dirk

I saw Marina buy Cequent..Now they buy Novosom...My question.

It is obvious that big pharma and the cash rich RNAi players and biotech firms have the money to buy these two assets and must have some knowledge of their science and IP position..

Why does Marina buy them?? Do they know something the rest of the industry does not know??? ALNY could have acquired them from the interest the earn on their cash.

Makes no sense to me. Is Marina smarter than the rest???

Anonymous said...

Is Marina smarter than the rest? Probably. And so probably are the inventors that run these tiny companies that teamed up with Marina as opposed to anybody else. You have to assume they know more than anyone else, yes. And that they know what they are doing. I think one of the two key Cequent folks was the top scientist at Alnylam once. And don't forget the inventor of Santaris's LNA gave his UNA to Marina last year to get the ball rolling.....Stay tuned.

Anonymous said...

I just do not buy the smart argument as there are a lot bigger buyers than Marina and they have been working with LNA for 4 years with little succes. And I am told that Cequent was shown around a few times before MRNA bought them, which I do not doubt as VCs owned most of it.

Be that as it may, good luck.

Anonymous said...

I don't get the LNA argument you're making. Maruina acquired Wengel's other thing - the UNA. And only Marina has played with it. Don't know about Cequent being shopped around....venture capitalists or not....but those venture capitalists chose to take 50 percent of Marina stock. I assume because they feel that their stuff will make that stock go up beyond whatever any "big boy" was willing to pay to buy them out. If they in fact where looking for that buyout. (They could have only shopped around to bargain with Marina)...I think owning 50 percent (50 million shares) of a young company whose stock is a buck - and who has the team that can actualize the drug - may have been one of their "shopping around" options. The one they ultimately chose. And probably not because they thought their stuff wasn't so hot. And I don't think the folks at Marina would bet half their company on something they didn't believe in either. The players here are the top guys in the field after all.

By Dirk Haussecker. All rights reserved.

Disclaimer: This blog is not intended for distribution to or use by any person or entity who is a citizen or resident of, or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject the author or any of his collaborators and contributors to any registration or licensing requirement within such jurisdiction. This blog expresses only my opinions, they may be flawed and are for entertainment purposes only. Opinions expressed are a direct result of information which may or may not be accurate, and I do not assume any responsibility for material errors or to provide updates should circumstances change. Opinions expressed in this blog may have been disseminated before to others. This blog should not be taken as investment, legal or tax advice. The investments referred to herein may not be suitable for you. Investments particularly in the field of RNAi Therapeutics and biotechnology carry a high risk of total loss. You, the reader must make your own investment decisions in consultation with your professional advisors in light of your specific circumstances. I reserve the right to buy, sell, or short any security including those that may or may not be discussed on my blog.