Tuesday, November 30, 2010

A Lean RNAi Therapeutics Will Do Just Fine

The media coverage on Roche’s decision to ‘abandon’ all things RNAi Therapeutics almost makes one believe that we have just witnessed the demise of RNAi as a therapeutic modality. The naysayers of the technology had their heyday, apparently delighted by the that Roche's decision is absolute proof that RNAi has failed in its quest to improve human health. Nevermind that the Roche news has to be seen in the context of Big Pharma’s crisis of confidence in its own ability to innovate and investor pressure to cut almost everything that does not immediately produce positive cash flow. Even Roche has to admit that in the 3 years since it took the $300M+ license from Alnylam and the 2 years since it bought Mirus Bio for $125M, nothing fundamental has changed with the science, except for maybe that the potency of LNP delivery has improved by 100-fold for some applications.

On the other hand, it is also the time to acknowledge the significant financial support that Big Pharma, including Roche, has provided to RNAi R&D at times in the capital markets that were otherwise quite hostile for companies based on novel biotechnologies. I’m quite hopeful that measured investments in RNAi Therapeutics by larger pharmaceutical companies will continue, and even increase again in the not-so-distant future as results confirming gene-specific knockdown in Man emerge from a number of the ongoing clinical studies.

Unfortunately, the Roche news has done much damage to investor confidence. As valuations of RNAi companies have dropped to levels that may sicken some investors, companies in the space will have to change how they conduct business.

If done smartly, there is an amazing amount of progress to take advantage of, not only as described in the literally thousands and thousands of RNAi-related papers coming out at ever increasing speed, but also progress in disciplines as varied as human genetics, ‘omic’ technologies and bioinformatics, nucleic acid chemistry, and IT and how it has allowed for business models with increased capital efficiency. By judiciously combining the growing knowledge of human biology with technologies that lower the barriers of entry by the day, biotechnology in general is poised to become one of the major pillars in many of the world’s economies, similar to how the eroding cost of computing power has changed the way we lead our lives.

Not all companies, of course, will adapt equally well. Humble Tekmira, as the re-incarnation of Protiva, may serve as a great example in how it is possible to make speedy technology progress without having to throw millions at the wall and hope that something will stick, and without building corporate structures to rival that of Big Pharma. It is also my hope, and expectation, that chastised Alnylam will find back to its roots and put technology and clinical results front and center without letting empire building take primacy as I believe it did when Alnylam let go of its Kulmbach operations. A market cap of less than $400M for a company with a financial profile that is the envy of the biotech industry, and with a pipeline poised to yield critical proof-of-concept data for a potentially transformative technology…I would not have dreamt to see such bargain prices for ALNY again.

I will now take a little writing break. After a good year of re-commencing this blog, I am at the risk of repeating myself. As the RNAi research engine powers ahead just as swiftly without my commentary, I will dive into the literature and take a more detailed look at some of the technologies. It is truly amazing how far we have come in understanding human biology and rationally interfere with it, also for therapeutic purposes.

Friday, November 19, 2010

Merck: “Tekmira are Truly Experts [When It Comes to Formulating SiRNA-Liposomes]”

Roche’s decision this week to terminate in-house RNAi Therapeutics development is widely reported to be a vote of no confidence in the platform. The alternative interpretation, however, namely that it might reflect a vote of no confidence in the ability of Big Pharma to innovate from within receives little or no consideration in an online media world that, at best, gets compensated according to click number. Even more so in an environment that demands immediate financial results, they may prefer to play it ‘safe’ by buying innovation in later for hundreds of millions in the form of drug candidates that have already proven themselves in phase III studies or have even received regulatory approval.

In addition, it is widely understood that since Roche intended to use liposomal delivery for its first RNAi-based product candidates, Roche must have been disappointed with the performance of Tekmira’s LNP delivery technology. Again, I strongly disagree that this is necessarily the right conclusion, because for Roche the development of LNP-delivered siRNA therapeutics did not really require a large in-house RNAi Therapeutics development organization. One could even hypothesize that the collaboration with Tekmira and Alnylam opened Roche’s eyes just how difficult it is to develop cutting-edge technologies such as RNAi Therapeutics with the same efficiencies as pure-play companies can, at least within current organizational structures.

In this light, I found the presentation by Alan Sachs, Head of Merck's RNAi Therapeutics efforts, at the recent RNAi Asia meeting particularly telling as he went out of his way to complement Alnylam and particularly Tekmira for their pioneering work in RNAi Therapeutics. It almost appeared like Merck considered them less as competition and that Merck would stand to benefit from their success in developing the breakthrough technologies necessary for RNAi a therapeutic reality.

The number one example of how Merck, and Big Pharma in general is dependent on biotech innovation in the field of RNAi Therapeutics is siRNA delivery, in LNP-mediated delivery. The statement thus emphasizes that all liposomal siRNA formulations are not created equal. Failures that others see and report with their home-brew liposomal delivery methods cannot necessarily be applied to Tekmira’s LNP technology.

If the RNAi Asia meeting is any guide, then Tekmira’s LNP technology is the de-facto gold standard in systemic siRNA delivery, widely acknowledged by industry and academia. As the gold standard, of course, it is also exposed to a lot of criticism. An interesting dynamic that emerged in this meeting is that not only does liposomal siRNA delivery receive heaps of criticisms by those companies that develop competing delivery technologies, but that liposomal researchers themselves start criticizing it. Unfortunately, these are also the scientists that get approached by the investment community and pharmaceutical industry for their views on liposomal delivery.

As Alan Sachs put it: there are dozens of variables in formulating a liposomal siRNA nanoparticle. Slight variations can have large effects on shape, stability, and reproducibility of the process, all with important implications for the toxicity, potency, and commercialization of such therapeutics. It is formulation that Alan Sachs considers Tekmira to be ‘truly experts’ in. He goes on to say that the question of IP exclusivity is not really that relevant, what matters at the end of the day is really the know-how behind reproducibly formulating safe and efficacious LNPs, at commercial scale at that.

This, I guess, also addresses the claims by other company, valid or not, that they do not require Tekmira’s IP for their own liposomal siRNA delivery purposes. It is true that many groups can efficiently knock down genes in the liver, and some also in tumors in rodents. Some now also at quite low microgram per kg potencies. Transitioning from rodents to non-human primates, however, has proven to be a big hurdle for almost all of these groups.

And listening to the talks and reading the literature, it is not difficult to see why performances differ so widely. Often, lipid formulations are cooked up to superficially approximate what has been reported by Tekmira and their collaborators. However, because the formulation processes are typically not comparable and little effort is put into characterizing what particles have actually been generated, these particles will behave very differently to a Tekmira LNP, no matter how similar the lipid chemistries and molar ratios applied. In more extreme examples certain lipid components have been dropped out, or the particles are highly positively charged and unshielded and therefore prone to aggregate. Still, implications are directly drawn towards the safety of Tekmira’s LNP technology. Sometimes it appears that some research groups have only recently entered the field and are trying to re-invent the wheel by reporting what should have already be well known.

My cynical view is that pointing out such supposed safety issues, is what gets you research grants these days. Since Tekmira’s LNP technology is the gold standard, funding agencies are more likely to fund research into the safety of LNP technologies than on the safety of some obscure delivery technology.

I do not want to suggest that there are no safety concerns with LNP delivery, also as practiced by Tekmira. But from my perspective, I am more than encouraged by the clinical record so far: the Tekmira ApoB study went up to 0.6mg/kg and experienced (only) one case of apparent immune stimulation, and Alnylam’s ALN-VSP02 is still dose-escalating, having reached 1.5mg/kg. Before these programs went into the clinic, my biggest concern for Tekmira’s LNP technology had been immune stimulation at much lower dosages based on Protiva’s experience with the liposomal delivery of plasmids almost a decade ago.

With regard to safety, Alan Sachs complemented Tekmira on putting patient safety first and making Tekmira’s whole-blood immune assay immediately available to the industry. Like Alnylam, Merck also quickly adopted/tested it. He added, however, that in Merck’s limited experience with the assay, results could vary quite a bit when using blood from different patients and that, as a result, the test cannot be considered to be reliable yet. My tendency, however, is to interpret the data to mean that the test is in fact very sensitive and reliable and that there may be some natural variability in how patients respond to LNPs. If a test like this can pick up some of these differences, then it should only contribute to the safety of LNP delivery. I’m sure Alnylam, and soon again Tekmira with TKM-PLK1, are busy collecting patient blood in an effort to determine the basis, maybe genetic, of such variability.

As an investor in Tekmira Pharmaceuticals, I must say that I do not really mind LNP formulation to be such a complex process. After all, one reason why the pharmaceutical industry is abandoning small molecules and flocking into biologics is that small molecules sales are easily canabilized by generic competition. A ‘naked’ antisense or siRNA that can be generated by straightforward chemical synthesis may face similar generic issues as small molecules. The story, however, would be quite different for an LNP-delivered RNAi Therapeutics with high technical barriers of entry.

In summary, in contrast to what seemed to be the message of an interview with Alan Sachs by Xconomy earlier this year, Merck appears to be as enthusiastic as ever about the potential of RNAi Therapeutics. Liposomal delivery won’t cure all diseases, but ‘even’ Merck considers it promising enough to focus most of their delivery efforts on this technology. As supported by Alan Sachs’ talk at RNAi Asia and the robust publication record by Merck RNAi scientists this year (at least 7 papers by my count), RNAi to Merck is not just about target discovery and validation. It’s much more, but since even with such an effort a Big Pharma like Merck expects to be dependent on sourcing RNAi innovation from the outside, it is best to lower, or ‘manage’ in the words of a Merck spokesperson, overall expectations and enjoy bargain prices.

Wednesday, November 17, 2010

Following Late-Stage Pipeline Setbacks, Roche Cuts In-House RNAi Research as Part of Large-Scale Corporate Restructuring

The writing has certainly been on the wall. First, in an August 2010 interview, Roche’s Head of Pharma Research and Early Development, Jean-Jaques Garaud, was a bit lukewarm about the maturity of RNAi Therapeutics. While acknowledging that ‘siRNA' was a 'hot field’, this Roche executive who assumed his current role in 2009 following the retirement of Jonathan Knowles, stated that RNAi Therapeutics was a ‘bit like science fiction right now’, but that within 2-5 years Roche should make progress in that direction. Then in September, a tight-lipped Roche informed development partner Tekmira that it won’t meet its earlier guidance of filing for an LNP-enabled RNAi Therapeutics IND before the end of the year.

Of course, 2-5 years in today’s pharma world, a world challenged by patent expirations, poor pipeline productivity, ailing healthcare systems, and an ultra-conservative FDA, equates to ‘not relevant to our bottom line’ and are considered an investment with expected negative returns. Roche in particular has been hit hard recently by setbacks in their late-stage pipeline, as well as several blows to their all-important Avastin franchise which now makes the Genentech acquisition look a bit pricey. This is in stark contrast to what appeared to be the healthiest pipeline in the industry in 2007 when it took a license to Alnylam’s RNAi Therapeutics IP and when it acquired RNAi delivery company Mirus Bio in 2008.

So as Roche struggles to meet earnings expectations for the coming quarters, it is maybe not that surprising that as it cuts costs where it can, its in-house ‘siRNA’ research in Kulmbach, Germany, and Madison, Wisconsin, have to go as part of the large-scale re-structuring of the Company announced today.

I have today returned from the RNAiAsia meeting in Singapore, and it was during this trip that I have been particularly struck by just how conservative Big Pharma has become again when it comes to new therapeutic modalities. Only 3 years ago Big Pharma seemed committed not to repeat its mistake of not having participated early on in the development of recombinant proteins and monoclonal antibodies and then pay a hefty premium for acquiring biologics companies later on in the game, yet today the same companies don’t even want to give the impression that they want to lead in the unchartered waters of RNAi Therapeutics. Potential and promise are just that, and it seems like that there is no way around the conclusion that proof-of-concept has to be provided by the smaller pure-play companies before Big Pharma (re-)commits in a big way.

In addition, despite some attempts to improve Big Pharma’s capacity to innovate by setting up pseudo-independent ‘Centers of Excellence’, Big Pharma seems to be fundamentally organizationally challenged in maturing cutting-edge technologies like RNAi Therapeutics as a result of inflexible bureaucracies and insufficient/inefficient communication between the relevant groups within sprawling organizations.

I do not want to deny that some of Roche’s RNAi expectations were probably disappointed, and not all of it is Roche's fault. I wonder how mature Roche considered dynamic polyconjugate delivery to be when it purchased Mirus for $125M, or what exactly it got from Alnylam in return for over $300M in 2007. Not to say that these were outrageously overvalued deals if put in the proper context, but Roche management, watching their peers pull back from RNAi Therapeutics, must feel a bit exposed now.

The full impact of Roche’s own pull-back from internal RNAi research on its RNAi Therapeutics partners Alnylam and Tekmira remains to be seen. After having spent north of $500M on RNAi Therapeutics, it is hard for me to imagine that Roche will write this investment off just like that.

It is possible that Tekmira and Alnylam get a shot at Roche’s RNAi assets, including the one candidate that seems pretty close to the clinic (Tekmira reported Roche revenues in the latest quarter of $0.7M, mainly for the development of this candidate). With Severin Schwan, Roche's CEO, stating that Roche may ‘spin off’ or ‘find a partner’ for its RNAi assets, one may even speculate as to whether Roche has plans to float its RNAi Therapeutics division on the stock exchange. These are strange times in RNAi Therapeutics and the pharmaceutical industry and stranger things have happened.

Friday, November 12, 2010

The Race between RXi, Marina, and Silence to Do Deal by Year-End (RNAi Therapeutics Portfolio Update)

It is not the first time in RNAi Therapeutics history that we hear of promises that cash-generating deals will be closed by the end of the year. This year is no different: RXi Pharmaceuticals, Marina Biotech, and to some degree Silence Therapeutics by disclosing an approach 2 months ago, all have the markets expect lucrative Big Pharma partnerships or even acquisitions as the year winds down.

Judging by the number of early-stage technology evaluations, there is good reason to believe that some partnerships will eventually materialize. However, because these 3 companies are likely to compete for a similar set of partners, the RNAi Therapeutics portfolio has been updated to take advantage of the recent increases in the shares of RXi and Silence Therapeutics, and after selling some of these shares add back Marina Biotech which is relatively attractively valued followed the share price decline ever since the merger with Cequent. Benitec was also added back following the re-grant of a fundamental ddRNAi patent in the US.

Marina Biotech

With the initiation of trials for the trans-kingdom RNAi Therapeutics candidate CEQ-508, Marina Biotech now sports a clinical program and that the Company may be able to develop all on its own. In addition, they have a good-quality program in synthetic RNAi trigger molecular biology and chemistry as exemplified by the recent publication on the utility of unlocked nucleic acids (UNAs), exclusively licensed from RiboTask, for siRNA trigger design. As previously indicated and supported by research from other groups, including Merck, these modifications can be used to abolish off-target effects mediated by the passenger strand. Even more importantly, UNAs can also mitigate microRNA-type off-targeting by the guide strand when judiciously placed in the seed region without compromising on-target RNAi-type silencing. Interestingly, inhibiting passenger strand incorporation by 5’ end UNA modification may simultaneously increase the potency of the guide strand. Hence, it fulfills is similar function as the Zamore thermodynamic end-stability rule.

While this molecular biology makes sense, the IP situation around ‘usiRNAs’ is less than apparent. I have long been puzzled by the usiRNA freedom-to-operate opinion that Marina had said a venerable intellectual property firm provided it with. I finally learned more about this during a Q+A session at an investor presentation by Marina where CEO Michael French answered this question as follows: usiRNAs are blunt-ended siRNAs with non-nucleotide 3’ overhangs (and thereby do not infringe the Tuschl-II 3' overhang IP)! Wow, somebody apparently got paid for this opinion. but who knows maybe Merck might subscribe to this interpretation of the scope of Tuschl-II should they lose access to it as a result of the Tuschl Litigation.

Whether you buy it or not, by committing itself to 3’ UNA overhangs, Marina consciously compromises siRNA activity, especially with 3' UNAs in the guide strand (typically some reduction in activity). UNAs in the passenger strand 3’ overhan, however, appears to make scientific sense and it will be interesting to see whether Marina will adopt asymmetric overhang designs in the future.

With CEQ-508, and maybe also relatively soon the topical bladder cancer candidate, Marina has bought itself some time to try and catch up on the systemic delivery front where it still seems to be stuck at the rodent stage and behind the likes of Tekmira and Alnylam.

As the number one wheeling-and-dealing company in the space, Marina Biotech has to be considered a serious contender in the race to find a partner by year-end.

Silence Therapeutics

Following the exciting news of a possible takeover, I am getting a bit concerned that the longer a deal takes to materialize, the weaker the negotiating position for Silence Therapeutics and the more complex for the company to secure alternative capital. In light of the recent positive development in Silence’s share price, it might not be a mistake to reduce the exposure should no deal materialize any time soon.

On the IP front, it appears that one can now expect more of the same also for Zamore: patent litigation galore. At least it shows that somebody, I wonder who, considers Zamore to be a threat. It cannot be Alnylam, of course, since it stated that the Zamore end-stability rule patents are of no concern at all. I guess the RNAi trigger players harvest what they sow. In the big picture, everybody could benefit from preserving IP around the fundamental discoveries in RNAi biology.

RXi Pharmaceuticals

My view on their technology hasn’t changed, but as the clock runs down one is reminded by RXi’s history of missed partnership promises. Whether Pfizer’s recent comments that intravenous delivery is not a viable delivery route makes a deal with RXi more or less likely is an open question. Since RXi has a new CEO, however, I will give him the benefit of the doubt.


Hopefully a highlight for the RNAi Therapeutics portfolio for the rest of the year will be the NASDAQ listing of Tekmira. With Tekmira being a well recognized player in RNAi Therapeutics, the US listing and a share price above $5 could mean that US institutions like Fidelity take meaningful positions in the company.

Tekmira under its new leadership is the only company in the space that has never explicitly promised a partnership and also happens to be the only 2nd tier RNAi Therapeutics company that does not desperately need a deal at this moment. In recent weeks I am starting to get the impression that Alnylam understands the value of an amicable relationship with Tekmira. On the other hand, this could mean that upcoming deals will have to be Roche-like deals, possibly with Novartis and Takeda, deals that are focused on developing specific LNP-formulated candidates.

OK, it’s now time for the companies to wow us with scientific results and the promised deals. No pressure, of course. RXi, Marina, Silence…which one is most likely to close a deal by year-end? Have your say by participating in the poll on the top right hand side.

Notice: None of the above is meant as investment advice, and as always, do your own due diligence before considering an investment in RNAi Therapeutics. Also, please read the important disclaimer at the bottom of this blog page.

Thursday, November 11, 2010

Alnylam Escalates Liver Cancer Drug Candidate to Dose Levels Predicted to Yield Meaningful Knockdown

Alnylam provided an update on the ongoing phase I clinical studies for their RNAi Therapeutics candidate ALN-VSP02 for liver cancer. Clinical data such as these are widely anticipated by investors and potential partners alike, and Alnylam with recent comments have left themselves little choice but to be measured against the quality of the data.

The presentation provided at the Chemotherapy Foundation Symposium held this week in New York City follows a June 2010 presentation at the prestigious ASCO meeting at which point 19 patients had received the liposomal formulation containing siRNAs directed against VEGF and kinesin spindle protein (KSP) up to a dose level of 0.7mg/kg. The importance of the new data is that the trial has now reached a dose of 1.25mg/kg, a dose that based on pre-clinical studies for VSP02 is predicted to start to yield meaningful and widely distributed gene knockdown in the liver (compare ASCO pharmacokinetic data with AACR 2009 animal data). However, for VSP02 to reach a dose of at least 1.5mg/kg would be even better.

The ASCO data included preliminary data from 19 patients and strongly suggested that VSP02 has anti-angiogenic activity as measured by reduced blood-flow in the tumors and as might be expected from reduced VEGF activity. This response, however, was not dose proportional which could be due to small numbers. As to safety in this quite sick and heavily pre-treated patient population as of ASCO, the one patient death was remarkable, an event that was deemed possibly due to study drug. Since this patient had an extensive liver tumor burden it had been decided to exclude patients of comparable or worse cancer burden for the remainder of the studies.

Achieved dose bodes well for the entire LNP pipeline

The good news is that the 0.7mg/kg dose has been overcome and that there have been no dose-related elevations in liver enzymes, the expected dose-limiting toxicity for most LNP applications. If we assume that such general liver toxicity and potency of LNPs are independent parameters, in the case of the ionizable LNPs I believe a valid assumption, then the fact that 1.25mg/kg has been achieved in this challenging patient population, challenging especially in terms of liver health, this should bode well not only for VSP02, but also for the other D-Lin-DMA-based LNP drug candidates currently in clinical trials or close (ALN-TTR01, TKM-PLK1, and TKM-EBOLA), and even more so for the 2nd gen LNP formulations with up to 100x increased potency for liver gene knockdown.

Among the 9 patients recruited since ASCO, one patient experienced transient grade 3 thrombocytopenia at 1.25mg/kg, a dose-limiting toxicity that necessitated a confirmation of the safety of 1.25mg/kg. Again, given the nature of the patient population and the importance of the liver also for platelet function, I would not read too much into this adverse event. With 6 patients in this cohort having been initiated on the drug, it looks like 1.5mg/kg is realistic.

Some patients have now received quite a number of LNP administrations, up to 13 (up to 5 at ASCO), and 3 with stable disease have entered the extension phase of the study. A trend towards increased disease stabilization with dose was noted. While this is promising, I would again caution that we are dealing here with very limited number of patients in an uncontrolled trial, and also the fact that some of this analysis could be confounded by the fact that a slightly different patient population is now being recruited at the higher dosages following the 0.7mg/kg adverse event. No tumor responses were reported.

In summary, the update is very encouraging for the success of VSP02, and even more so for the entire LNP pipeline. The next major milestone will be the presentation of biopsy data, possibly at ASCO 2011, which should critically tell us whether the drug is doing what it’s supposed to do (RNAi cleavage assay; mono-aster formation; RNA/protein knockdown etc). Beyond that, it will be interesting to speculate on the nature of the next clinical studies. A combination of VSP02 with a microtubule-targeting chemotherapeutic could be promising with VSP02 functioning as a sensitizer, thereby opening up MT cancer drugs also for liver cancer. Combinations trials with DNA-damaging agents often used for liver cancer would also appear to be reasonable to investigate.

Next stop for the clinical data-flow: Results from the ongoing ALN-TTR01 studies- this time hopefully with knockdown data.

Update on Silence Therapeutics

Yesterday seemed to be RNAi Cancer Therapeutics Awareness Day, with Silence Therapeutics highlighting a publication related to their lead candidate Atu-027, also in phase I studies for solid cancers. The publication concerns the activity and potential mechanism of action of the PKN3-targeting lipoplex formulation in mouse models for (hematogenous) lung metastases.

I would categorize these studies as being consistent with the previous scientific reports by Silence Therapeutics that suggest pleiotropic mechanisms to be responsible for the observed pre-clinical activity of Atu-027. Importantly, the results further seem to indicate that we may not see a response in the form of existing tumor shrinkage in the phase I studies as Atu-027's main activity appears to be in preventing the spread and seeding of new metastases. Similar to ALN-VSP02 the maximum tolerated dose will be the primary focus of the phase I trial with Atu-027.

Shareholders, albeit apparently pleased by the publication of these studies, will be even more interested in a Calando or Alnylam-like clinical update for Atu-027. And even more than that (!), they will want to know whether a takeover offer is finally forthcoming. In any case, it may be advisable to become more concrete about short-term financial plans in order to avoid a situation like last year when Silence Therapeutics was forced to merge with Intradigm as it was running out of funds.

This includes reporting milestones it is currently receiving, such as from Quark. Alnylam reported a Q3 increase in InterfeRx revenues of about $2M which I speculate largely comprises the Quark payment related to Quark granting Novartis an option on their kidney drug candidate. I speculate that Silence received a similar amount from Quark.

Thursday, November 4, 2010

Alnylam Green Shoots After Corporate Restructuring

The latest quarter must have been the best quarterly performance by Alnylam in the last 3 years. After going through a rough patch that culminated in Novartis not adopting a widely expected $100M platform license with the attendant lay-off of a third of its staff, the results and also tone of the conference call struck me as if the company had re-discovered its old enthusiasm for RNAi Therapeutics drug development and is intensely focused on creating value by providing additional clinical proof-of-concept data over the coming months.

There is reason to be cautiously optimistic about the upcoming clinical data. For one, dose escalation for the liver cancer candidate ALN-VSP02 seems to have progressed beyond the magic 1mg/kg mark and is still ongoing! First generation or not, the fact that patients have now received and tolerated this kind of dosage, and on a repeat basis, is major de-risking for all of Alnylam’s, but also Tekmira’s pipeline candidates which involve LNP delivery (almost all of them). Similarly encouraging, ALN-TTR01 dosing is also ongoing and with 3 centers in Europe recruiting now, results may not be that far off (28 patients anticipated in this phase I study).

Although the first generation LNPs appear to be well tolerated, Alnylam seems to be even more excited about a potential quantum leap in LNP delivery: LNPs containing the next-generation MC3 lipid which not only silence in the unprecedented single micro-gram per kg range for gene targets in the liver, but also appear to be very well tolerated in animals. The MC3 lipids are derived from the DLin-KC2-DMA ionizable lipids developed by Tekmira, results from which were published earlier this year in Nature Biotech.

Besides the science, financials seem to be in better-than-expected shape, and I believe is what underlies today’s jump in share price (you can assume that the stock market wouldn't pay much attention to MC3). With over $370M cash/equivalents on the balance sheet, Alnylam is poised to close the year with well over the previously guided $325M cash/equivalents. Having slashed the work force, albeit probably at considerable personal cost, thus buys the company strategically valuable breathing room. In addition, there were a number of positive one-offs this quarter, including $2M for the successful award of 8 federal grants, a Quark milestone, and increased activities related to Novartis finalizing its 31 target picks. And with Novartis' relationship with Alnylam settled now, it should become easier to talk to other companies about partnerships and further add to the strong financial position.

Alnylam and Medtronic also stand to receive very significant funding from the Huntington’s Disease Foundation (CHDI), likely totaling over $10M, some of which has already been earned (agreement is retro-active). Somewhat dampening the excitement around that program was news that ALN-HTT is now a 2012 goal for entering the clinic, while LNP-delivered ALN-TTR02 and PCSK9 (both probably MC3) are poised to be the Company’s 2011 new clinical candidates.

An interesting tidbit on PCSK9 is that, faced with numerous competition from mainly monoclonal antibody candidates against the same target, some of which have already entered the clinic, it appears to be now Alnylam’s strategy to emphasize the fact that with RNAi you down-regulate both intra- and extracellular PCSK9 levels, which therefore is closest to recapitulating human genetics which has been driving the adoption of PCSK9 as a drug target for hypercholesterolemia in the first place. A good argument indeed.

Overall, my most important take-home was that this seems to be a re-energized company, and with some of the right clinical news, there may soon be a second honeymoon between Alnylam and its shareholders (of whom I’m btw not one of…yet).

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.