Sunday, October 31, 2010

Big Pharma Interest in RNAi Therapeutics Often Poor Indicator of the Science

The current perception is that large pharmaceutical companies have become quite a bit more conservative in their approach towards RNAi Therapeutics. This stands in stark contrast with only 3 years ago when some of the same companies topped each other in their efforts to securing a piece of the RNAi Therapeutics action. Clearly, given that the development of any new class of drugs is a gradual process and facts do not change as fast, Big Pharma must have been very wrong not too long ago, or it is now. So today I try to put Big Pharma’s mood swings into the perspective of the big picture progress in the underlying science.

In brief, while some players in the RNAi Therapeutics sector are partly responsible for the current Big Pharma RNAi conservatism, a lot can be explained by the herd mentality prevalent in Big Pharma where the actions of a fellow company rather than the primary scientific data guide the decision making, since standing up for your beliefs and out from the crowd has rarely proven to be good for climbing the corporate ladder. At the moment, the overpowering mantra in Big Pharma from which RNAi suffers from as being considered too early to know is that, with the exception of diagnostics, investments in R&D and especially innovative technologies generate deficits. This is not helped by the fact that the healthcare sector does face a few economic uncertainties leading to a state of paralysis where RNAi clinical development is put on hold and investments in RNAi technology development are reduced to rather mundane pharmacological assay development projects instead of real enabling technology development.

The 2006-2008 gold rush

About 4 years ago, Merck set on a collision course with Alnylam and bought rival Sirna Therapeutics for more than a billion US dollars. Now, RNAi Therapeutics was firmly on the radar of Big Pharma with Roche firing the next volley through a $300M+ platform deal with Alnylam the following July, the same month that Silence entered into a relatively broad RNAi development deal with AstraZeneca. Heightening the excitement was the Nobel Prize to Fire and Mello later that year for having discovered, only a decade earlier, that it is double-stranded, not single-stranded antisense RNA that triggers highly potent homology-dependent, post-transcriptional gene silencing.

Consequently, and despite the cracks in the economy that were starting to surface then, Takeda spent $150M for limited access to Alnylam’s IP estate, to at least secure an RNAi leadership position among its fellow Japanese pharma companies. All this left Pfizer scrambling not to be left behind in RNAi. Pfizer made the unorthodox decision to acquire Coley Pharma, which was working on TLR therapeutics and with which Pfizer had a collaboration, and use their oligonucleotide therapeutics expertise to form the basis for Pfizer’s RNAi platform effort. In addition, Pfizer also licensed a ddRNAi Therapeutics candidate for HepC from Tacere. The price tag: $164M for Coley alone. Despite all these investments, Pfizer has not formulated an outwardly cogent RNAi Therapeutics strategy, with no significant access to leading delivery technologies (this after having lost Mirus to Roche in 2008) and RNAi trigger IP.

Now, do I believe that Big Pharma overpaid for RNAi Therapeutics in that period? If you consider how RNAi has already revolutionized biomedical research and feel, as I do, that it also has the potential to do the same as a therapeutic platform, then the multi-million dollar deals should not come unexpected. I do believe, however, that some of these investments certainly did not find the right targets, the Sirna Therapeutics acquisition probably being the most egregious example. In addition, when it came to delivery, Big Pharma largely behaved penny-wise, pound-foolish, treating it almost the necessary evil of RNAi Therapeutics, or worse, ignoring it altogether. Why for example would anybody want to spend over a billion dollars for essentially RNAi triggers only, when delivery had only just reached the non-human primate stage (Alnylam-Tekmira 2006 Nature SNALP/LNP paper)? And even for LNP delivery then, scale-up, immune stimulation and the ability to repeat administer were still very much in doubt. Like building an aircraft and forgetting that you need fuel to fly it.

So RNAi Therapeutics investments at that time had still to be regarded visionary investments that could pay off hugely, driven by the belief that humanity would not fail to exploit such an elegant natural gene-regulatory pathway for therapeutic purposes, and I am convinced that Roche and Merck conducted some careful analysis of whether the attributes of RNAi Therapeutics would fit into the pharmaceutical business model of the future (‘personalized medicines’). Nevertheless, the actual trigger for the nature and timing of these investments in many cases must have been some mild panic of maybe missing the RNAi Therapeutics train about to leave the station, a technology that may have come around just in time to help the industry through the worst of the patent cliff that it was just starting to face. And if Merck invests $1.1B in the technology, maybe they know something we don’t know?

The Ripple Effects of the Dark Days of 2008-9 Still Being Felt Today

The worst financial crisis in decades was made worse still for the industry as it became clear that some of the early results that may have led Merck to believe that RNAi was quite close to reality, particularly in the antiviral, wet AMD, and cancer areas, were indeed too good to be true. Innate immune stimulation reared its ugly head, and soon every in vivo efficacy result was assumed to be an immunostimulatory artefact. Could innate immune stimulation be the fatal fundamental flaw of RNAi Therapeutics?

Here, the industry proved resilient and some high-quality studies came out that showed that in vivo efficacy can be achieved in the absence of immune stimulation and rules how to avoid them emerged. I would like to highlight here the efforts by Tekmira which in many ways have proven to be the forward-looking savior of the industry a) by developing the most advanced systemic delivery technology, and b) for having addressed immune stimulation almost as soon as they entered the field. In early 2009, Silence Therapeutics also provided high-quality pre-clinical proof-of-concept for non-immunostimulatory RNAi for cancer in various animal models. This was nice also because this validation occurred outside the Alnylam-Tekmira space.

Still, Big Pharma interest in RNAi Therapeutics as a platform hit a low. Merck-Sirna Therapeutics strangely made it their PR policy to question the platform, Roche after their merger with Genentech became noticeably more cautious about RNAi Therapeutics (also probably due to a change in personnel), and Pfizer just last week said that maybe, although we still have to test it, antisense is great after all? Contrary possibly to Pfizer, I had always believed in investing in drugs for diseases where treatment decisions are not influenced by whether having to go for a half-hour infusion every 2-4 weeks is sufficiently convenient to patients. With all due respect, I don’t understand a number of comments that were published in an interview on Pfizer’s RNAi efforts last week.

Considering the publications and conference abstracts from Big Pharma, one may speculate that Big Pharma’s PR strategy for RNAi Therapeutics may be considerably informed by lack of access not only to IP, but especially enabling delivery technologies. Lack of access not because such IP and technologies don’t exist, but because they cost something. Moreover, RNAi champions within these organizations are likely frustrated by being held on a short corporate leash due to the general economic uncertainties of the pharmaceutical industry and the fundamental loss of Big Pharma’s confidence in the power of innovation. This means that Big Pharma’s internal efforts in RNAi Therapeutics are largely limited to more mundane pharmacologic assay development, which albeit certainly useful, cannot substitute for investments in delivery technologies with essentially all the innovative, ground-breaking work happening outside their walls.

This situation is not helped by the fact that the high-ranking decision-makers are typically too busy to read the scientific literature to properly inform their own opinion and instead rely on the conventional wisdom which at the moment says that RNAi has disappointed as a therapeutic modality and now it needs to prove that it is more than just a useful laboratory tool. And it does not matter whether the current scientific literature has well moved past this existential angst phase.

I know that this is a rather scathing critique of Big Pharma’s RNAi Therapeutics philosophy, one driven by herd instinct and PR rather than an open-minded assessment of the latest primary data. There must be many scientists in Big Pharma, too, that are frustrated by the constraints and lack of scientific leadership in those companies. In a way, I sometimes feel sorry for the criticism that Merck gets for its $1.1B purchase of Sirna Therapeutics. Others are now well aware of the consequences of sticking out from the crowd as RNAi visionaries.

It is now up to the industry to carefully manage its way through this funding desert and, over the next 12 months provide a series of human proof-of-concept data with Alnylam’s ALN-TTR01 and ALN-VSP02 coming up first, then followed by Silence Therapeutics’ Atu-027 phase I results in H2 2011. In addition, there should much to be gained for the negotiating position of pure-play RNAi Therapeutics companies by aligning some of the fundamental IP and pushing back efforts by Big Pharma to talk down the price of RNAi.

14 comments:

Anonymous said...

hello Dirk great read!
"In addition, there should much to be gained for the negotiating position of pure-play RNAi Therapeutics companies by aligning some of the fundamental IP and pushing back efforts by Big Pharma to talk down the price of RNAi". just quite didnt understand what you where trying to say.
and if you dont mind which are those pure -play rnai companies you menion .Thanks in advance

Dirk Haussecker said...

The only beneficiaries of pure-play RNAi companies challenging each other's IP and as a consequence reducing its value is Big Pharma. This despite the fact that critical RNAi innovation has thus far come out only from the small companies, never from the large companies. It would deprive the pure-play companies of their labor and risk that they took. Scientists in the large organizations, however, know of the value of RNAi, I'm not worried about this. In anticipation of clinical proof-of-concept it could be quite valuable to re-establish one or two gate-keepers to IP and leading enabling delivery technologies. On the RNAi trigger side, 3' overhangs (Tuschl II), relative end-stability (Zamore), and depending on perspective also CSIRO/Benitec IP, would be important components. On the delivery side, Tekmira's SNALP should definitely be part of it and again depending on perspective, RXi's self-delivering rxRNAs for localized RNAi and Silence's lipoplexes for endothelial RNAi.

Anonymous said...

My broker just informed me that they received notification that Tekmira will proceed with a 5:1 share consolidation as part of their NASDAQ listing. Sounds like the listing is likely to follow very shortly.

Helena Andrade said...

Hello Dirk, I really enjoy reading your blog. I have been learning a LOT since I started reading it!
I would like to comment on the Pfizer treatment decisions issue. We can not be romantic about it and believe any good drug for non-life threatening diseases will have immediate acceptance just for the sake of it. As a pharmacologist/toxicologist I must say that the "final product" does matter and that the consequence of not giving the patient the most comfortable/convenient option will be catastrophic. Thus, I understand Pfizer statement, even though I would like things to work some other way. In the end, they have to sell these new drugs, right?
Thank you for your delightful blog and keep the good work ^^

Anonymous said...

Was your broker notified when this would occur?

I also own TKM but haven't heard boo.

Dirk Haussecker said...

Dear Helena- I take your point and there is definitely a big demand by various stakeholders in easy-to-use drugs*. What I meant to say was that at this stage of the development of RNAi Therapeutics, investments in the technology should not depend on whether current technologies require IV, subQ, or oral admin. You naturally start with what is technically feasible right now and select the appropriate indications. As the potency of LNP delivery increases e.g., subQ should be possible maybe 5-10 years down the line. And maybe there will in the end be oral RNAi Rx that are taken up into systemic circulation just like many small molecules do today. There are sufficiently large numbers of patients that would gladly take any drug that makes their condition better. Even for hypercholesterolemia, there are subpopulations that benefit from IV drugs. A business model can be built around this and you don't get from A to C just hoping that others will solve the problems and then hand over the solutions for free.

Unfortunately, many of these statements on RNAi are quite political, and since the current narrative is that, surprise/horror, RNAi isn't as easy as we once thought, there is a need to present the other side of the story, too. But yeah, the ball is now in the court of RNAi Therapeutics companies to provide clinical proof-of-concept.

Dirk Haussecker said...

* People will be surprised at how bad patients are taking drugs as prescribed. Irregular meals, a hectic life-style etc all account for it and payors are finding out results are not as good as expected based on clinical trials.

This shifts the benefit-convenience analysis, and I bet that for this reason the trend towards administering drugs in a clinical setting will only increase from hereon. And I also bet that Pfizer did not spend billions on Wyeth's protein products because such drugs are particularly convenient to administer. Something seems odd with Art's comments.

Anonymous said...

I have the view that the industry made the wrong choice in choosing "naked" siRNA technologies over "expressed" or ddRNA.
The issues of delivery and cytokine response are not issues for ddRNA.
In terms of research, ddRNA techniques are well established. For anti-viral therapeutics, ddRNA offers the "low hanging fruit" (City of Hope HIV lymphoma and T-cell; Tacere HCV).
Tissue specific delivery of siRNA will define multiple generations of new drugs. "Walking" with ddRNA rather than "running" with siRNA therapeutic modalities would have create a better foundation for RNA therapeutic investment.
BTW I am also very appreciative of your blog.

Anonymous said...

I can confirm that my broker received notification from the Tekmira Transfer Agent that the BoD recently voted in favour of a 5:1 share consolidation to comply with Nasdaq listing requirements. The share consolidation is expected to be complete by the end of the year.

No information was provided regarding the potential for a capital raise.

To my knowlege, Tekmira has not published this information on their website or in a Press Release.

If one requires confirmation, I would recommend contacting your broker or TKM Investor Relations.

Kevin CC said...

Tekmira Press Release. Expected NASDAQ listing date of Nov 15 following a 5 for 1 consolidation of shares.

TSX consolidation will commence Nov 4.

http://ca.news.finance.yahoo.com/s/03112010/28/link-f-ccnmatthews-tekmira-provides-update-nasdaq-listing.html

Anonymous said...

It is interesting to see Benitec with its IP and success in each application of its technology continue to operate below the radar of big Pharma , I suppose it falls outside of traditional small molecule medicine, what am I missing? Is not ddRNA a valid aproach?

Anonymous said...

someone in UK must thing ddRNAi is a valid approach judging by their sudden opposition to Graham's UK patent (granted 2003). ref Benitec pr today.

Anonymous said...

But you have to be pleased with the attention that microRNA therapeutics has received in the last 2 years. I believe that Regulus and Santaris have captured the attention of Big Pharma.

Anonymous said...

Merck is now setting their sights on microRNA mimic development. I believe they have worked most recently with miR-124.

By Dirk Haussecker. All rights reserved.

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