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.

10 comments:

Anonymous said...

http://www.gartner.com/technology/research/methodologies/hype-cycle.jsp

Trough of disillusionement?

Guy.

Anonymous said...

Dirk,

Please don't stay away too long. Your expertise in RNAI development has been invaluable to me and, I am confident, many more. You have contacts with many people working in this area, and the information you provide is greatly appreciated.

Anonymous said...

Dirk,
As stated by previous comment..we will miss your insight and look forward to when you resume you blog. I am not a scientist but have found your insights very helpful in understanding the technology and the developments. Hope you come back soon, with lots of exciting developments to brief us about.

Anonymous said...

Dirk

I can't help but think big pharma is in dire straits when it come to revenue going forward. Roche leaving RNAi was nothing more than taking the riskiest parts of its portfolio away. I imagine PFE is doing the same thing now as the Lipitor franchise is getting ready to vanish.

Your comments about ALNY being such a bargain are interesting. While I am not a scientist, the commom sense in me says the management and Board of that company are deficient and have destroyed what value any shareholder had. It is trading at cash value for all intents and purposes, so the market values its IP at zero. Is that what you think???

I think the market is correct as IP will only be worth something when a drug is Phse III. The old comment that ALNY will be the toll booth is dead.

With RNAi drugs miles away and ALNY burning millions, why don't they start acquiring assets and companies than complement their science. I have to give Michael French of Marina credit as he is a guy with very little capital yet
finds Cequent and has another shot on goal for little cost. We can name the non-big pharma players in the RNAi space on two hands. Are egos and stupidity keeping advancement away?

You need not write about the science for a while, but please try to stay active with advice and thoughts about who would work well together. I think it is the only ral chance for this science to make it.

Thanks..you have been a great help to all.

Anonymous said...

Monoclonal antibodies were dead in 1994, now they are worth 13 billion a year in revenue to big pharma, ( although 20 billion of small molecule patent revenue expires in the next 12 months alone ). RNAi be it SI or more probably SH will be a multiple of what monoclonals are in 15 years say 25 billion a year or more in todays money. Maybe as part of todays major Pharma companies or maybe as new companies as the Genzymes and Genetechs have done before, RNAi after all is the embodiment of the human genome project and intelligent design.

Anonymous said...

Perhaps interest in microRNA mimics and inhibitors will become the focus of RNAi research.

Anonymous said...

Dirk, we need your insight. Please don't leave for long, now about say 1 article a month :)

Your work is very much appreciated and I believe a day will come when RNAI will be I'm vogue again, clinical results will help a little bit :)

Sam

Anonymous said...

Dirk,

I have followed your blog for the last couple of years.

I have found your posts to be thoughtful, insightful, and extremely valuable.

Like others that follow your blog, I hope your sabbatical is short-lived...

Best wishes.

Anonymous said...

Guru

Read your post on the TKM IV board..You give too much credit to ALNY..They are very arrogant and the Board is clueless....Ifthey were smart when the stock was at $30 they should have sold 10 Millions shares..They do no understand biotech..You finance when you do not have to..I do not see them as a majr player 3 years from now..They have squandered shareholder value..big time.

Anonymous said...

I wish one of the big Pharma companies hired you to head their RNAi investments, I cant believe you have not been head hunted already . I believe one of the small cap RNAi companies would like to hire you if they had the resources , you are doing great work here, I am very grateful for your efforts. PS how is the CSIRO interference on Fire and Mello proceeding? Saw that Wikipedia calls the 2006 Nobel prize for medicine the most contentious as Waterhouse and Graham were not included even though their work was first and more inclusive , I suppose being animals we rate plants as less important although they are Eukaryotic as well.

By Dirk Haussecker. All rights reserved.

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