My guess: Pfizer or Novartis.
I have just returned from a vacation on the beautiful island of Taiwan that also allowed me, finally away from my laptop, to reflect on RNAi Therapeutics and the financial markets. At the end of it (I just returned four hours ago), I was quite positive that the markets for high-risk/hi-reward investments such as RNAi Therapeutics have just hit rock bottom and that the survivors of the shake-out are poised to be among the best performers in the stock market as the dead money sitting in large companies’ coffers and the deceptively safe gold and bond market will find its way back again into small biotech companies in search of higher yields as a double-dip recession appears less likely by the day. Combined with the upcoming $100M Novartis decision and clinical data from particularly the SNALP/LNP-based trials (TKM-ApoB, ALN-TTR…), this should indeed be a very good time to be invested in RNAi Therapeutics.
If you follow this blog over time, you will have noticed that I have become much more bullish about Silence Therapeutics as it may well be a valuable addition to the RNAi Therapeutics efforts of a few Big Pharma companies. Today then, the company announced that the company has received an ‘approach which may or may not lead to an offer for the company’, with details yet to be released.
Novartis is such a Big Pharma that might benefit from a Silence acquisition and maybe not so coincidentally has also recently expressed some confidence in Silence Therapeutics RNAi platform when it optioned an RNAi clinical candidate that is based on the Silence Atu-RNAi trigger design. By exercising the $100M Alnylam option and complementing the RNAi trigger IP position with some of the valuable pieces controlled by Silence and that have recently started to issue, Novartis may well end up with one of the strongest, if not THE strongest position in RNAi triggers. It is also my feeling that although Novartis has apparently been on an RNAi Therapeutics hiring campaign, its technical expertise still lags behind that of pure-play companies such as Silence Therapeutics.
An acquisition of Silence Therapeutics may allow Pfizer, which like Novartis has also invested serious money in a clinical candidate based on the Atu-siRNA platform, to finally formulate its RNAi trigger strategy and get a start in delivery, too. In general, Pfizer to me has been a bit directionless in RNAi Therapeutics and risks missing its stated goal of an in-house RNAi Therapeutics IND in the near-term. Silence Therapeutics may help them remove a lot of the question marks over their RNAi efforts.
The offer price? Considering the recent share price before the offer (4.6p-7.5p) in light of the valuation of the merger with Intradigm (slightly above 20p just 8 months ago) and the stage of Silence Therapeutics' technology and IP position (increasingly solid in the RNAi trigger arena, encouraging in delivery), I would consider an offer price in the 20-25p range to be acceptable to Silence Therapeutics.
If you haven’t invested in Silence Therapeutics, I wouldn’t be too disappointed in the possibly missed opportunity here. First of all, it’s not a done deal yet, and more interestingly there are a few other companies out there whose shares should catch fire if a solid buy-out offer indeed emerges. Shares in Tekmira, RXi Pharmaceuticals, and mdRNA may be the primary beneficiaries due to their low market caps and because they might be considered by the markets to potentially be of similar strategic value to Big Pharma. Shares of Alnylam should also respond quite positively to such news, because it would confirm Big Pharma’s strong interest in RNAi Therapeutics and Alnylam being the bellwether of RNAi Therapeutics.
Please let it be true, please… J
20 comments:
Hi Dirk,
Have you heard anything regarding what Tekmira will need to do to become listed on NASDAQ? Should we expect a reverse stock split and do you think such a split would be detrimental to current shareholders?
Following the merger with Intradigm earlier this year, Haworth was granted 1.325 million share options at an exercise price of 21.225p, and Davies (CFO) got 300K options at the same exercise price. At 25p/s, I consider it very unlikely they will sell the company for 70mil sterling and net less than 4p/s each. I predict a buyout price of no less than double that (50p/s) and more likely ~70p/s (~US$300mil).
Dirk,
Many of your blog-post have described the strategic importance of RNAi delivery plateforms. Specifically, you have compared and contrasted the competing technologies, and have provided valuable insight into the types of therapeutic areas for each trigger.
Much of your discusssion has been focussed on the rapid advancement and proof-of-concept for SNALP (1st and 2nd generation) as one of the most promissing delivery plateforms (at least for therapeutic areas including Liver, solid-cancers, infectious deseases, etc.).
In one of your posts, you introduced the term iSNALP as an interesting technology for more targeted delivery.
Further, you have discussed the collaborative relationship between Tekmira and Alnylam, and have suggested that the two companies might be distancing themselves re: SNALP.
I hope you can devote a blog specifically to understanding the unique relationship between Alnylam and Tekmira re: 1st and 2nd generation SNALP technology, IP patent portfolios and feedom-to-operate, cross-licencing deals, and development relationships. Specifically, with a focus on the commerical opportunities and risks for both companies vis-a-vis Roche, and Novartis.
I ask this, as I've found all of your posts extremely valuable, however, I find myself (and I assume others are, also) confused about the unique Alnylam/Tekmira relationship re: SNALP.
In light of your thinking that the competitive landscape and Big Pharma partnerships is nearing a tipping-point, I think a fullsome discription of the relationship between Alnylam/Tekmira would be extremely valuable for the followers of your blog.
Thank you in advance.
Kevin- About a possible Tekmira split: IMO, strong companies don't have to be afraid of such splits. It really doesn't change anything fundamentally except that certain price thresholds may allow some funds to invest (positive) and attract some shorts on auto-pilot (negative).
Anonymous 1- Thanks for finding out about some of the financial incentives of top mgmt at Silence. These have certainly to be considered, but shareholders in the end will determine whether a price is acceptable or not.
Anonymous 2- my take on the relationship between Tekmira and Alnylam. For now, I would have to refer to my combined previous postings where I have written quite a bit on the topic. I admit, it is definitely not an easy subject.
Tekmira drops reference to SNALP (TM) in latest PR re: ALN-TTR. In place, company now refers to "...Tekmira's proprietary LNP delivery technology."
Interesting development. Could it have something to do with protecting IP and licensing of n-gernation LNP's being produced by the company?
CORRECTED - the Tekmira PR I was referring to was Tekmira's PLK1 IND.
Just checked... Tekmira has completely rebranded their website, to remove/replace all references to SNALP with LNP.
Their pipeline of RNAi therapeutics has also been updated to reflect a new naming convention... TKM-XXX (e.g. TKM-APOb, TKM-Ebola, TKM-PLK1).
This could be a complete red-herring, but clearly the rebranding was thought-thru.
Also, they make reference to proprietary LNP technologies and protection of IP by several patent-series....
Tekmira announced the re-branding at the last quarterly report. They explained this move with the confusion and uncertainty caused by the concurrent use of SNALP and LNP by Tekmira and its partners while in practice they are essentially the same.
Hi Dirk,
I am not up to date with the delivery literature - Does the TKM-PLK1 IND use Tekmira's Gen2 LNP technology (2010 Nature Biotechnol) or has this info been disclosed publicly?
A significant trade alert has been issued for RXi Pharmaceuticals (NASDAQ:RXII). See BioMedReports!
TKM-PLK1: The lipid on TKM-PLK1 is more what one would call a 1st gen lipid. But keep in mind, 1st and 2nd gen has been largely defined for targeting genes in the liver, and it remains to be seen how the potencies with 2nd gen lipids change for non-hepatic targets/formulations.
You can find the publication underlying TKM-PLK1 here: http://www.jci.org/articles/view/37515
RXII trading alert: As I have written before, e.g. in my last portfolio update (http://rnaitherapeutics.blogspot.com/2010/08/rnai-therapeutics-portfolio-review.html), it makes sense that the share prices of especially second-in-line RNAi trigger companies like SLN and RXII as well as delivery company Tekmira would benefit disproportionately from the events triggered by the Novartis decision. Thus far, of course, it is only rumors. Probably a very good period to be invested in RNAi Therapeutics.
Dirk
Please do not place any credence whatsoever to any Biomedreports articles posted by Mike Garza. They (his reports) are completely garbage and designed for pump/dump strategies. The fact that RXII even talks to him for his "articles" makes me extremely suspect of RXII's credibility.
Dirk can you give us an update on the various delivery options for SIRNA and ddRNAi, how they have changed for each technology, perhaps you could include an update on the merits/ relative successes and failures of the two approaches ( SIRNA vs ddRNAi )to date and the main players , SIRNAs web site seems to stop at 2006 what technology is Merck using for its mass screening ? Sirna's which cost them 1.1 billion ie SIRNA or Benitecs shRNA approach which cost 400k for a research sub-licence?
Gene therapist- It is not clear to me what delivery strategies Sirna/Merck employ besides SNALP/LNP technology (see scientific literature). There was a flurry of gene specific patent applications by Merck that appeared in the databases recently, but little in vivo data there.
This, and especially in case that Merck loses access to the 3' overhangs in the wake of the Tuschl litigation, makes me think that Merck could return to the RNAi Rx market soon (delivery and even trigger), but probably won't be opening their wallets for another $1.1B.
And definitely, I think that ddRNAi Rx are very exciting, but would probably take a considerably different strategy from what companies in that space are currently undertaking. It's particularly unfortunate for the patients that could benefit from such therapeutics.
Tuschl's 21 to 23 nucleotides were covered by Waterhouse and Graham in work antidating Fire and Tuschl by years , 1991 to 1994, CSIRO has documentation in detail to this effect in their Government sponsored CSIRO log books plus Benitec logs and correspondence to their patent attorneys , both for ddrna shRNA and downstream SIRNA, CSIRO and Bayer the plant licencees are getting active on patent interferences to this effect, Benitec hold all human theraputic rights with reagents 50-50. As USPTO works on priority another tussle developing here. What does it mean to the space if CSIRO and its partners Benitec and Bayer prevail, Rossi thinks Carnegie is expecting an issue here? Ive seen the logs and documents to the IP attorneys and it looks like the practice as used in 2010 , although dated early 1990's. When Nuleonics CEO saw it , he rolled over commenting it looks like CSIRO owns it all on RNAi IP. A fews days later he put the remnants of Nucleonics on sale which interestingly Alnylam purchased. Could Benitec and Bayer and the CSIRO end up with the only US patents and where then for the other companies in the area?
CSIRO have good form in protecting their IP
http://www.smh.com.au/technology/enterprise/csiro-to-reap-lazy-billion-from-worlds-biggest-tech-companies-20100601-wsu2.html
I have a small amount to invest if I want one SIRNA company one ddRNA and one delivery company which ones would you suggest?
Gene therapist...I agree with you that the CSIRO appears to have a strong case. However, too early a priority may not be beneficial to them either. My take generally is that while Waterhouse could become a quite fundamental RNAi patent, this does not exclude other RNAi patents from being granted and Tuschl-II (3' overhang features would not be covered by Waterhouse) would still be commercially valuable, with possibly 5-9 years later longer validity.
Gene Genie...sorry that I cannot tell you that directly what to do with your money. Please go back to my postings on the RNAi Therapeutics portfolio to get a feel for what companies could be interesting opportunities. Before you invest is RNAi Therapeutics, think long and hard about the risk you are taking!
ON the ddRNA side Benitec looks like the main player, Tekmira or Marina look like the delivery plays, and Alnylam seems to be the main SIRNA play > would you agree?
Post a Comment