The mystery surrounding the abrupt halt to the trading of Tekmira shares on July 14 was solved when Tekmira announced that it was awarded a significant US government contract for the development of an Ebola drug worth up to US$140M, $35M of which could be earned over the next 3 years. This essentially provides Tekmira with a free shot on goal for early product revenues, and should also prove beneficial for its overall balance sheet because of the typical fee component of such contracts plus expenses generally applicable to SNALP drug development.
This development nicely builds on the impressive SNALP-Ebola study published in the prestigious journal The Lancet less than 2 months ago where Tekmira scientists along with collaborators from Boston University (Geisbert group) showed for the first time the complete protection of non-human primates in a post-infection model.
While this is not the Big Pharma buy-out deal that I had speculated about yesterday, this endorsement of SNALP technology by the US government only makes one more likely now. It is even more impressive given that Tekmira, based in Canada, obtained this contract on a shoe-string budget without the significant government support that competing groups have enjoyed, and in a much shorter period of time.
The initial funds will be used for IND-enabling pre-clinical development and one phase I human safety study. This should involve more extensive safety and efficacy testing in animals, especially non-human primates, and the development of biomarkers predictive of efficacy in humans where efficacy cannot be tested. Ultimately, the big payout in the form of the first RNAi Therapeutics product revenues may come from government stockpiling contracts after further successful clinical safety and non-human primate efficacy testing.
The contract raises once again questions about Tekmira’s relationship with Alnylam. Alnylam actually have earned from 2007-2009 about $30M in hemorrhagic fever virus R&D government funding and may therefore at one point have competed with Tekmira (then Protiva) for such government contracts. Another interesting issue is whether Tekmira would have to exercise a target pick under the Alnylam RNAi trigger license. It is possible, however, that Tekmira will not have to exercise one because it is likely that the US government, the eventual main customer of any Ebola product, has rights to many of Alnylam’s fundamental RNAi trigger patents. It is also curious that Alnylam appears to have given up their pursuit of Ebola therapeutics, and could possibly reflect the influence that Tekmira enjoys in practical terms in who is able to pursue SNALP products and for which targets (‘Tekmira know-how’).
Overall, this was unexpected news to me. I had mainly considered the value of the Ebola program as being a quite visible proof-of-concept for the wider applicability of SNALP delivery, not expecting any significant funding windfalls. Following the wide publicity that The Lancet paper received, the fact that this study now turns out to have actual positive financial implications for the company could mean a significantly shortened trajectory towards profitability and increased investor interest to coincide with the upcoming Nasdaq listing. If that were not enough, the upcoming filing of the IND for SNALP-PLK1 and the $100M Novartis decision means that the momentum is now decidedly in Tekmira’s favor.
In related RNAi Therapeutics deal news
Quark Pharmaceuticals and Japanese Co. Nitto Denko announced a collaboration whereby Quark will contribute its RNAi triggers, with supposedly structural features that provides them with freedom-to-operate, with Nitto Denko’s siRNA delivery technology to develop an RNAi Therapeutic for cirrhosis of the liver. Financial details were not disclosed, except that it said to be in the double-digit million dollar range. While the exact nature of the delivery technology was not disclosed, the press release referred to a 2008 Nature Biotech paper that successfully employed small molecule-targeted cationic liposomes to knock down a cirrhosis-related gene in specialized cells of the liver. Liver cirrhosis is certainly another disease of the liver of high unmet medical need and attractive for liposomal siRNA delivery. Ligand-targeted liposomes should even further expand the utility of SNALP-siRNA delivery and I look forward to learning more about progress in that area, including the detailed structural and functional characterization of such particles.