Tuesday, June 29, 2010

Upcoming $100M Novartis Decision to Shake Up RNAi Therapeutics

As critical court rulings that could decide who will control the fundamental Tuschl patents are getting delayed at least into September, probably later than that (see the ‘RNAi litigation’ blog for the latest updates), the $100M question of whether Novartis will exercise their right to broadly adopt Alnylam’s fundamental RNAi trigger IP estate is likely to replace the RNAi litigation as the driving force in the RNAi Therapeutics deal dynamics in the near future.

Under the 2005 research collaboration and license agreement, Novartis paid Alnylam $10M in upfront cash in addition to a $58.5M equity investment in Alnylam's stock for the right to (exclusively) pick 30 therapeutic gene targets protected under Alnylam’s fundamental RNAi trigger IP as part of the research collaboration, and for the right of first offer to additional targets that Alnylam develops and wishes to partner. As I understand it, Novartis has until the end of the term of the research collaboration, probably October 12 2010, to pick their targets, and retains the right of first offer until 3 years thereafter (hold your breath if you expect new product-specific partnering before that).

In addition, Novartis also obtained the option to broadly adopt Alnylam’s fundamental RNAi trigger estate exercisable for an additional $100M. This non-exclusive license has been characterized by Alnylam to work similar to Alnylam’s platform relationships with Roche and Takeda. These licensing relationships provide the companies non-exclusive access to Alnylam’s fundamental RNAi trigger IP that will provide coverage until 2016-2025. One important difference, however, is that Novartis could use this IP in all therapeutic areas, not just a few select ones as in Takeda's and Roche's case. The other important difference, which I believe has the potential to fundamentally change the competitive landscape in RNAi Therapeutics, is that, unlike Roche and Takeda, the licenses do not provide Novartis access to crucial RNAi delivery technologies. Novartis has until the end of the research collaboration (October 2010) to decide on the option and think long and hard about their delivery strategy.

It would seem quite logical for Novartis to exercise the option. For one, Novartis is certainly ramping up their RNAi Therapeutics efforts based on the flurry of related job advertisements. Moreover, $100M would appear to be quite a bargain for such broad freedom to pick gene targets compared to what Takeda and Roche got. In fact, it would make Novartis the company with the most power in RNAi target picking. Lastly, Novartis has been consistently buying Alnylam shares in recent years to maintain their ownership at 13.4%. Such purchases have to be considered strategic.

But as I said, all this target selection power may not be worth that much without delivery. In fact, a long delay for Novartis in gaining access to say delivery to the liver and cancers (I’d love to have some insight into the targets that Novartis has picked thus far, but hepatitis C is a likely one and quite a few cancer-related targets, too), may quickly diminish the value of their initial 30 exclusive target picks as the patent clock is running down. So at some point Novartis has to think about entering the clinic and learn about the clinical aspects of RNAi Therapeutics development.

There are not that many delivery technologies that can provide clinically relevant delivery of synthetic siRNAs. As you will know, I consider SNALP technology as the most advanced at the moment. I would therefore expect Novartis to try and gain access to it. Last year, Novartis paid mdRNA roughly $7M basically to take a look at that company’s liposomal siRNA delivery technology. One way to interpret this was that Novartis wanted to evaluate (cheaper) alternatives to having to go through Alnylam and/or Tekmira in gaining access to liposomal siRNA delivery. One thing is for sure, Alnylam would likely make Novartis pay extra for a sub-license to SNALP-related Semple/Wheeler. Alternatively, Novartis may not like Alnylam’s terms and gain access to SNALP by buying Tekmira. What makes this even more attractive is that it would on top provide Novartis with another 7 target picks, which it could pick also after October 2010, and critical expertise on the use of SNALP. This is important because even if Alnylam gave Novartis access to the SNALP-related Semple/Wheeler IP, it, like Takeda and Roche before it, would still very likely require the co-operation of Tekmira to fully exploit SNALP technology. Such expertise would, of course, also benefit the overall RNAi delivery effort of Novartis.

With 37 targets protected by Alnylam’s RNAi trigger IP (note: the exact number would depend on how many targets Novartis will have chosen by October), one has got to wonder whether just buying Tekmira for $200M may be the better deal. 37 targets should be more than enough to keep them occupied into the early 2020’s. Or if Novartis was feeling real lucky and would like to become the dominant force in RNAi Therapeutics, it would spend $300M for the adoption license and Tekmira and look quite smart in comparison to Merck, Roche, and Takeda.

The above scenarios should, of course, give other Big Pharma companies cause for concern. Assuming for example that Pfizer agrees SNALP to be the most promising systemic RNAi delivery technology, it may not like the prospect of another important RNAi delivery technology disappearing from the market, just as it happened to them in 2008 when Roche bought Mirus Bio with which Pfizer had a siRNA delivery collaboration then.

Of course, if events unfolded like this, all other pure-play RNAi Therapeutics companies should also benefit. Alnylam Pharmaceuticals, mainly because it would confirm the interest by Big Pharma in RNAi Therapeutics, and pure-play companies like Silence Therapeutics, mdRNA, and RXi, because they would be viewed as moving up the acquisition queue.

PS: The above scenarios are based on a few assumptions, the most important of which probably being that an acquisition of Tekmira would also transfer the right to exploit SNALP technology for Tekmira’s 7 target picks (which are transferable) in the case of a Big Pharma which otherwise has not gained access to Alnylam IP, and in the case of Novartis, possibly for all its other target picks, too.

Tuesday, June 22, 2010

Regulus and Sanofi-Aventis to Develop MicroRNA Therapeutics for Major Unmet Medical Needs

Regulus Therapeutics and French pharma giant Sanofi-Aventis announced today that they would co-develop MicroRNA Therapeutics with an initial focus on fibrosis (PR by S-A, PR by Regulus, PR by Alnylam and ISIS). The deal demonstrates the need for innovative approaches for the treatment of diseases for which the pharmaceutical industry has long failed to develop meaningful therapies. The deal, valued at potentially over $750M, includes a $25M upfront, relatively realistic $50-60M in mid-term option fees and equity investments and major R&D support by Sanofi-Aventis, and provides Regulus with a nice cash cushion going forward. The ~$50M in realized partnership funding to date from GSK and Sanofi-Aventis should also make shareholders of both RNAi Therapeutics company Alnylam and antisense company ISIS Pharmaceuticals happy which are still the majority owners of Regulus.

Today’s announcement comes less than a month after Regulus Therapeutics secured exclusive access from the University of Wuerzburg to intellectual property related to fundamental work on the role of microRNA-21 in cardiac fibrosis. This should also be the lead program in the collaboration and justify Sanofi-Aventis transferring $25M of hard cash. Beyond the heart, fibrosis, a form of tissue scarring, is also widely observed in other organs such as the lung, kidney, and liver, and new treatment options are desperately sought after. Witness the fate of a drug for idiopathic pulmonary fibrosis (IPF) developed by Intermune of which the data appeared to be somewhat borderline, but which an FDA advisory panel recommended for approval earlier this year essentially because of the very significant unmet medical need (it was subsequently rejected by the FDA).

In addition to miR-21, other microRNAs have also been found to play a role in fibrosis, and both microRNA antisense and microRNA replacement approaches are conceivable. Given that these microRNAs often occur in various tissues, targeted delivery approaches may be preferable. On the other hand, should less specific delivery prove to be well tolerated, it is possible that the same drugs may be of use in other indications such as cancer for which some of these microRNAs, especially miR-21, have also been found to play a role.

The previous deals with GSK involved up to 4 microRNA targets in inflammation and targeting miR-122 for the treatment of Hepatitis C viral infection. Danish competitor Santaris also has an agreement with GSK covering up to 4 antiviral MicroRNA Therapeutics programs. Given that there are significantly less microRNAs than there are genes and microRNA biology is still relatively young, these deals seem to balance the concern of unwittingly giving away too much to Big Pharma with allowing enough flexibility for data-driven drug development.

In addition to proving to be a very good investment for Alnylam and ISIS, being part of Regulus also allows these companies to establish new relationships with major pharmaceutical companies. It is probably not a coincidence that the initial GSK-Regulus partnership was followed by the ISIS-GSK rare and infectious disease deal earlier this year. Of note, Sanofi-Aventis, under the new leadership of CEO Chris Viehbacher, recently entered into a relationship with California company Traversa for the development of protein-based RNAi delivery.

Overall, it is very encouraging to see that a number of companies in Big Pharma do understand the need to invest in potentially transformative new technologies to address major unmet medical needs. I hope that this summer will provide more such proof points.

Saturday, June 19, 2010

RNAi Therapeutics and Big Pharma: To Collaborate or to Integrate?

John Maraganore, the CEO of Alnylam, argued in a recent essay in the Xconomy that investing in innovation is a no-brainer now more than ever. However, with a few notable exceptions, judging from the actions of Big Pharma over the last two years in drug development in general, and in RNAi Therapeutics in particular, one would think that this must be an illusion. If anything, the mega-mergers and cutting of R&D indicates that Big Pharma apparently believes that the cure for its current ailments is to first of all slash innovation and focus instead on the marketing and distribution of ready-to-market products.

A related worrisome trend is that Big Pharma is shying away from acquiring small biotech companies building cutting-edge drug discovery platforms such as RNAi Therapeutics. Instead, a look-and-see, risk-sharing partnership structure is preferred, adversely affecting both the speed and quality of developing these technologies, ultimately to the detriment of all stakeholders, including Big Pharma.

My thesis is that this model cannot be sustainable. In a normal marketplace, the high margins in the drug business will eventually have to shift to coincide with where the highest technical barriers and value-adds are, and this is clearly in the discovery and initial development of viable drug candidates and the platform technologies on which they are built. In the age of the internet and the free flow of information and goods, I just cannot believe that distribution and very late-stage development can continue to command the premiums they still do.

When this happens, Big Pharma will find itself with nothing much left, and the business dynamics will change as it has completely lost its capacity to innovate from inside. This could be even further exacerbated in an improved economic environment where small biotech is no longer dependent on the typical late-stage deals with unfavorable terms of trade when there is again reasonable access to the capital markets.

One argument often cited for slashing innovation is that for some reason in-house R&D is not productive, and it is cheaper to buy it in. Flawed logic, of course, because prices should eventually go up to reflect the value biotech brings to Big Pharma. Some go even a step further and argue that innovation has just become too costly, full-stop. If that were the case, then Rome is about to become a village again and we are about to enter the Dark Ages II and investing in any part of drug development and also broader economy would be futile anyway.

Certainly, after living through the millennium bubble, one has to admit that small biotech has contributed considerably to the notion that drug discovery and investment in new technologies is wasteful. But then again, as funding has dried up, many of the get-rich-quick schemes have disappeared and biotech has become much more disciplined as a whole.

How then should Big Pharma become involved in RNAi Therapeutics? I agree here that early-stage collaborations are an important part of the process, as the predictability of discovering and developing new breakthrough and enabling technologies is simply too low and will have to typically first come out of academic laboratories and then be dynamically refined in a small biotech environment to a stage where the technology has very reasonable clinical and commercial potential. At this point it becomes important for Big Pharma to have the capability of evaluating what is real and what not, and laboratories within Big Pharma with a good working knowledge of RNAi Therapeutics should be able to accommodate this, as many of them already do. These can also come in the shape of an acquisition of one of the smaller and struggling pure-play RNAi Therapeutics companies.

After promising technologies have been identified, however, it makes sense to integrate them. This is because even if you can bring drug candidates based on these technologies into the clinic through licensing relationships, clinical development is still a dynamic process requiring quick thinking by those intimately familiar with the technology as the results come in. A case in point from the related gene silencing field of antisense is ISIS Pharmaceuticals’ obvious frustration with the speed and quality of some of its licensees so that it has decided to buy back the rights to a number of antisense drug candidates. The ISIS-GSK deal also partly reflects the realization that at least the early stages of development are better left in the hands of those familiar with the core technology.

SNALP technology is another example. There have been quite a few that claimed a few years ago that almost anybody can make liposomal delivery work. At the moment, however, it is only Tekmira Pharmaceuticals that can claim that. Even if you copy what is published in the scientific and patent literature, mass-spec the SNALP composition etc, you may erroneously believe to have caught up with the 10 year head-start that Tekmira had, but as soon as some minor unexpected problem arises, it immediately requires the deep know-how of those innovators intimately familiar with it to solve it. There is definitely more value to be gained from a platform if you understand and own it, especially early in the life of an emerging technology where the clinical learning curve can still be relatively steep. Once a technology is relatively well understood in humans, sure, more hands-off licensing becomes increasingly appropriate and is certainly an option for those in Big Pharma that are satisfied with accessing individual products instead of enjoying the full benefits from having in-house access to prolific new platform technologies for long-term growth.

It is, of course, important that, once acquired, the innovative culture of the target is not suffocated by the bureaucracy of large organizations. Roche Kulmbach appears to be a good example of the Big Pharma model whereby, instead of slashing R&D, innovation is transferred to semi-independent Centers of Excellence where failure and risk-taking is tolerated and encouraged. In my opinion, the reason why Sirna Therapeutics/Merck has not been successful is because they are their own biggest enemy by having soon adopted a Big Pharma mindset, being afraid to take risks with new technologies and instead hide behind inflexible rules (not guidelines) for what characteristics a technology has to fulfill before even being looked at by the company.

Within the next 4 months, possibly set in motion by the upcoming $100M Novartis decision, we should get some revealing insights into the current thinking of Big Pharma on RNAi Therapeutics. My hope, of course, is that the above was an overly pessimistic assessment of the Big Pharma mindset and that they also differentiate between certain areas in drug development that may well be outsourced and others, innovative platform technologies with reasonable clinical visibility, for which outsourcing and even partnerships alone are not optimal.

Wednesday, June 16, 2010

RNAi Therapeutics Portfolio Review (June 2010)

It has been awhile since I last updated the RNAi Therapeutics Portfolio. The Portfolio was originally conceived to reflect the value the market places on RNAi Therapeutics. Following some criticism, however, that this is at the risk of being too much of an academic exercise, I have started earlier this year to make it more performance oriented, albeit at the cost of dropping some pure-play RNAi Therapeutics companies that are an important part of the ecosystem.

Since the last portfolio review there have been two notable movers in the portfolio: Tekmira which has more than doubled as the story of the company having become a key enabler of RNAi Therapeutics is finally seeping out into the broader market, catalyzed not insignificantly by the widely reported Ebola monkey treatment success, and on the other end of the spectrum Silence Therapeutics which has since halved in share price as it is struggling to build a new shareholder base with historical shareholders apparently leaving the company in droves following its merger with Intradigm at the beginning of this year.

The way Tekmira has created shareholder value is through intense focus on its core area of expertise: liposomal delivery of siRNAs. This is in contrast to companies like Alnylam, mdRNA, RXi, and Silence Therapeutics that have tried in the past to be the one-stop shop for RNAi Therapeutics by offering a variety of delivery modalities and therapeutic areas. Of course, some of the differences of business development strategies are to be expected as the various companies build from different patent positions and know-how. The point, however, that has become apparent is that, unless you are dealing with a patent portfolio of the caliber of Alnylam (and there are some qualifications to that), IP alone is not enough to attract meaningful partnership funding. Instead, for the majority of companies in the space it is at least as important to be able to convince potential partners, and increasingly also the investing public, that you have a reasonable strategy to actually develop commercially viable drugs.

Although it has taken one or two years longer than I had expected, Tekmira has arrived at this point. With Big Pharma starting to think about building their own RNAi Therapeutics pipeline and Novartis coming to a critical $100M Alnylam adoption license go/no-go decision later this year with no obvious access to advanced delivery technology, I would think that there is a good chance that the future of Tekmira Pharmaceuticals will be decided over the next year or so. With its highly efficient financial structure (part of the focus theme) and increased visibility/upcoming Nasdaq listing, both an acquisition or stand-alone structure should position the company well to continue and build shareholder value.

Judging by the share price performance following the Intradigm merger, Silence Therapeutics on the other hand seems to be wandering in no-man’s land. There is some evidence though that Silence could emulate Tekmira’s model in being a desirable enabler of RNAi Therapeutics. This view is based on the apparent utility of the Atuplex delivery system for knocking down genes in the vascular and possibly also lymphatic endothelia, including in monkeys, with implications for important therapeutic areas such as cancer and vascular disease. In addition, Silence has credibility in siRNA chemistry (some decent early science that has held up over the years) plus in target discovery and validation, its focus pre-RNAi.

While I have hopes that with the apparent strength of its scientific team, Silence could re-emerge as a leading RNAi Therapeutics enabler, especially should Tekmira have been spoken for, a few things would need to occur to earn my full confidence. First, the lipoplex-endothelial data ought to be replicated by a thrid party, ideally in a peer-reviewed format. Second, Silence’s claim to have solid delivery options besides Atuplex, for example peptide-based and lung delivery, needs to be substantiated with data. Otherwise, the stock market cannot place any real value on those technology that presumably consume precious resources. This is another way of saying that it is possible that Silence’s research spending is not as efficient as it could be. Its recent re-organization may well address some of that and extend the cash-runway beyond a year from now. Third, Silence needs to communicate a coherent RNAi trigger strategy. Silence in my opinion has become the victim of its own early success in developing the Atu-siRNA chemistry that has led them to vigorously hold on to it and may have prevented further innovation in siRNA chemistry and related fresh IP, but ended up with IP that has only a narrow scope and is at the risk of becoming out-dated in the foreseeable future. And lastly, Silence needs to build a new investor base. Many of the historical investors seem to have left the company with the old management, and while one of the selling-points of the merger was in increasing its exposure to the US, without a US listing it does not appear that this outflow can be compensated with investments from the US. With a market cap of less than US$30M and about a year of cash, nevertheless an interesting value.

As the company with the dominant RNAi trigger IP, Alnylam’s business model is necessarily different from that of Tekmira. It is in Alnylam’s interest to stimulate the wide adoption of RNAi as a therapeutic modality which is the reason why the company has this relatively high burn rate which needs to be supported by equally lush licensing and collaboration revenues. While 2 years ago, $100M for Alnylam would have almost been yawned at, my expectation is that should Novartis pay that amount to Alnylam for the adoption license for which the decision is coming up soon, it would provide Alnylam with some nice cash worth at least another year and reawaken investor interest in the space…$100M is nothing to be laughed at. Equally important potential catalysts for both Alnylam and Tekmira will be the first clinical results for the ApoB and TTR candidates using 2nd generation SNALP technology (likely early and late 2011 events, respectively). While there is every reason to believe that we should see decent knockdown with these formulations, nothing beats actual clinical data. With Novartis, data from the ApoB and TTR programs, first RNAi Therapeutics pipeline activities by Big Pharma, and clarity on the IP front (‘Tuschl Tussle’) all coming up, the 2-year-long and painful wait for Alnylam investors may finally be coming to an end.

In the DNA-directed RNAi space of the sector, Benitec still remains the only significant effort. Following a period of reorganization, including cleaning up its IP relationship with CSIRO and getting the fundamental Graham patent re-instated in a number of important constituencies (except, of course, in the US), the company has started to expand its pipeline efforts with recently forged relationships for lung cancer (University of New South Wales) and Hepatitis B viral infection (China-based Biomics). On top of that, additional data from its triple RNA therapeutic HIV candidate that has already entered the clinic can be expected. Underlining the transformational period for the company, Peter French, a trained scientist with significant experience in technology management, has yesterday been appointed as the new CEO. A probably important upcoming milestone will be an oral hearing at the USPTO in the re-exam of the fundamental Graham patent at the beginning of August. While IP is critical, it would also be nice to see the company conduct more of its own research in-house. In my opinion, a lot of ddRNAi Therapeutics value is just waiting to be uncovered, especially with gene therapy showing more and more promise in the clinic.

One of the companies in the small RNA biotech arena that has impressed scientifically, but failed to sustain investor interest is Rosetta Genomics. This is somewhat surprising since diagnostics is currently valued as a low-cost, low-risk, relatively large reward area in biotech, quite attractive for many in this economy, and Rosetta Genomics is a, if not the company in what should eventually be one of the molecular pillars in diagnostic: small RNAs. Rosetta Genomics may still suffer from the perception that its business strategy has never lived up to its scientific potential, and personally some of that distrust is deserved stemming from the atrocious recent financing. There is evidence, however, that this is changing such as expressed interest in finally developing companion and response diagnostics. Revenue from its first three microRNA diagnostic products may also mean less frequent financings and new types of investors.

[Important update: Rosetta released 1st quarter financial results in late May which I had missed as I was traveling then. Having now listened to the conference call and read the report and recent filings with the SEC, I was shocked to find out that Rosetta is in a serious legal dispute with its US partner for its first microRNA diagnostics products, Prometheus laboratories- possibly explaining the extremely anemic 1st quarter sales numbers. Potentially most damaging could be the following claim: '. In response, Prometheus has issued notices to Rosetta denying the allegations of breach and alleging that Rosetta made material misrepresentations in the Stock Purchase Agreement, dated April 10, 2009, between Rosetta and Prometheus and demanding rescission of the securities purchased by Prometheus under the Stock Purchase Agreement'. This is strong stuff, indeed, and I felt insulted by the CEO's casual remark that this issue had long been public knowledge. The company should know that not every retail investor is subscribing to SEC filing alerts and given the importance of this particular event, a timely press release would have been warranted.]

I am currently neutral on the last component in the Portfolio, ISIS Pharmaceuticals. This company has understood to sustain investor interest now for decades by staying on the cutting-edge of RNA Therapeutics research as it is still waiting for its first commercially significant drug approval. While over the years this has not made investors rich, there are much worse examples, and maybe one of these days they will hit the jackpot (the question, of course, is whether their proof-of-concept, then out-licensing strategy allows them to enjoy a jackpot at all...). The reason, however, why I am neutral at the moment, is that I have been slightly negatively surprised by some of the tolerability aspects of mipomersen that have surfaced without much fanfare in the literature, and I would rather wait for the two upcoming phase III study results announcements before considering adding to the position. It is always possible that the volatility triggered by these events could create interesting price points. On the other hand, the broad interest of ISIS in RNA Therapeutics combined with its very strong balance sheet gives the company considerable flexibility to capitalize on the genomics revolution.

Now to some of the companies not in the Portfolio. In the case of mdRNA, I'd still like to wait before the dust settles. The recent announcement that it has gained exclusive access to the use of UNAs (unlocked nucleic acids) for the use in diagnostics got me somewhat confused and raises concerns that mdRNA feels the need to be seen to be doing something instead of focusing on building clinical capabilities. On the other hand, unlike Silence Therapeutics which has been held back by its history, mdRNA is not shy to explore all opportunities that may exist in RNA-related therapeutics and diagnostics and then to opportunistically jump on a band-waggon as it passes by. This reminds me somewhat of Ribozyme Pharmaceuticals when it abruptly decided about 8 years ago to abandon ribozymes and leverage their oligo therapeutics expertise for the development of RNAi Therapeutics which eventually resulted in that company, subsequently known as Sirna Therapeutics, being sold to Merck for $1.1B. Of note, some of the key people from Sirna Therapeutics are now with mdRNA adding some credibility to that strategy.

One company that I feel has just made a good strategic decision is RXi Pharmaceuticals when it announced last week that it had chosen dermatology and ocular disease as their 2 therapeutic focus areas using their self-delivering rxRNA technology (sd-rxRNA) which represents a convergence between RNAi trigger and delivery. It is the right decision because I share their view that sd-rxRNAs should be most promising for these direct RNAi approaches (see recent blog entry on sd-rxRNAs) and that commitment might hopefully catalyze their efforts in coming anywhere close to the clinic. To me, this lack of drive towards the clinic has long been a major deterrent. It is now up to the company to actually follow up on its promise and earn back the confidence of the market, even more so after a Rosetta Genomics-style recent financing.

I have decided not to make any changes to the Portfolio at this time as I feel that the real pay-day for at least one of the larger positions in the portfolio may come within the next 12 months or so.

PS: Please read and understand the financial disclaimer at the bottom of this page.

Wednesday, June 9, 2010

Structure-guided Evolution of Ever More Potent and Specific RNAi Triggers

As the RNAi pathway is being rapidly dissected structurally, RNAi triggers continue to evolve rapidly both in terms of safety and efficacy. The 5’ end of the guide strand of an siRNA has received particular interest in that regard, and a paper in Nature now provides structural support for why human Argonaute 2, the important Slicer enzyme that cuts target mRNAs, preferentially accommodates ‘Us’ (uracil) and ‘As’ (adenine) of the genetic alphabet in its 5’ guide binding pocket (Frank et al.: Structural basis for 5'-nucleotide base-specific recognition of guide RNA by human AGO2).

Humans contain 4 related Argonaute proteins, Ago1-4, but only Ago2 can function in RNAi gene silencing. Not only will good incorporation efficiencies of RNAi triggers in Ago2 enhance gene silencing, loading less into Ago1, 3, 4 which only contribute to microRNA off-targeting without adding to RNAi efficacy should also improve the safety of RNAi Therapeutics. In fact, they may even compete with loaded Ago2 for target mRNAs and thus inhibit RNAi gene silencing. Similarly, because the RNAi function is pretty much dispensable in most cell types and developmental stages, burdening only Ago2 with the RNAi trigger should also reduce the risk of saturating the microRNA gene silencing functions of cells as Ago1, 3, and 4 should be able to cover for Ago2’s contribution in microRNA gene silencing through genetic redundancy.

Because of the structural relatedness of Argonautes, however, many RNAi triggers typically end up to some degree in all 4. In theory, however, Ago1-4 will differ in molecular detail and this provides the rationale for attempting to design RNAi triggers in a way (for example through chemistry, the nature of the double-strand RNA structure, or directing them into certain processing pathway) that the guide strand of an RNAi trigger gets preferentially loaded into Ago2. The 5’ end is of particular interest here because this is where the guide strand exhibits most ‘personality’ by exposing not only the relatively anonymous sugar phosphate backbone, but the entire nucleotide including its 5’ modification, typically a phosphate, to the Argonaute proteins.

It is therefore not surprising that, as indicated also by the patent literature, companies in the space are working on 5’ strategies that at the moment are particularly aimed at increasing the affinity of the guide strand towards Ago2. The message from the present Nature paper is apparently quite simple in that it suggests uracils and, a little bit behind, adenines to give you the best affinities. This is also consistent with the observation that the majority of microRNAs, the naturally occurring small silencing RNAs, also bear a uracil at their 5’ ends. An important technical advance in that paper is that these conclusions were drawn from studying the relevant domain (‘MID domain’) of human Ago2, including its crystal structure, while most of the earlier structure-based analyses have made use of more distantly related bacterial Argonaute proteins.

Related observations have been reported last year, when it was found that replacing the 5’ uracil of the microRNA let-7 with another nucleotide dramatically reduced its RNAi activity (Felice et al: The 5' terminal uracil of let-7a is critical for the recruitment of mRNA to Argonaute 2). Interestingly, the effect did not seem to be so much on the small RNA by Ago2, but rather at the target mRNA recognition step. It should be noted here that the present Nature studies only looked at the structure and affinities of single nucleotides, not the entire guide strand, with Ago2.

For the future, I would hope, for the noted potential for enhanced efficacy and especially specificity to see more of these studies, particularly those that systematically investigate the effect of the 5’ nucleotide on the relative incorporation efficiencies of silencing RNAs into the 4 human Argonautes. These would complement other studies, including one to which I contributed, that look at the secondary structure of the RNAi trigger with respect to the various Argonaute incorporations. A nice precedence of differential Argonaute loading based on the nature of the 5' nucleotide already exists in plants where it has been found that the mere identity of the 5’ nucleotide determines the sorting of a small silencing RNA into the various Argonautes.

Whether a 5’ uracil has discrimination effects in addition to the affinity benefit remains to be seen. However, the results already suggest that since the 5’ end of a small silencing RNA does not directly interact with the target mRNA anyway, it might be worth thinking about siRNA screening libraries that all start with a uracil. Of potentially even more immediate importance, DNA-directed RNAi promoter strategies ought to be re-considered as many of these still employ minimal hairpin RNAs driven from Pol-III promoters in which the guide strand is found at the 5’ end of the hairpin and that initiate with a non-uracil residue.

If you are a non-scientist and still reading this, you are doing pretty well. The take-home message is that while very potent, picomolar RNAi triggers can already been routinely discovered, RNAi trigger design is still an area with lots of potential for further improvements. In 5-10 years I can imagine RNAi Therapeutics to have matured to an extent where structurally highly adapted RNAi triggers effect potent gene silencing with minimal off-targeting activity.

Saturday, June 5, 2010

Tekmira Sets New Standard in Ebola, Widening Reach of SNALP Delivery

When a small biotech company from Canada trading at less than 1CAD announces plans to list on the Nasdaq, one ought to pay attention, especially when this company is well known for its fiscal conservatism. The recent publication (Geisbert et al.: Postexposure protection of non-human primates...) on the treatment of Ebola infection by Tekmira and collaborators at Boston University and the US Army Medical Research Institute of Infectious Diseases (USAMRIID) in the prestigious journal The Lancet indeed supports that their optimism of good news to come out over the next couple of months is well-founded.

By demonstrating the complete protection of non-human primates, aka monkeys, from an otherwise lethal dose of Ebola virus using the company’s SNALP delivery technology, this paper sets a new standard in the development of anti-hemorrhagic fever virus treatments. More than the potential direct financial value of such a drug in the form of further biodefense funding for the benefit of SNALP technology development and long-term prospects of stockpiling contracts, the real significance of this publication is that it confirms SNALP, developed and owned by Tekmira, to be the industry-leading systemic RNAi delivery technology where successful non-human primate data have become routine, and furthermore extends the reach of this technology from targeting genes in the liver and solid cancers (already a plethora of applications here) to infectious and likely inflammatory diseases, too. Given that Big Pharma is well aware of the potentially revolutionary nature of RNAi Therapeutics and Tekmira’s current key enabling position in the space, it should only be a question of time that a bidding war for Tekmira will commence, if it has not already.

Ebola presents a biosecurity threat due to its deadly nature and the concern that it may be weaponized while no drugs can successfully treat it. Oligonucleotide-based approaches look most promising in the race to develop drugs against Ebola and other hemorrhagic fever viruses. AVI Biopharma in particular has staked a good part of that company’s future on winning biodefense stockpiling contracts from the US government, and as a result their antisense morpholino protein translation inhibitors have historically led the development. Such therapeutics aim to slow down the spread of the virus enough to give the immune system a chance to catch up and clear the virus.

In 2006, AVI and their collaborators around Dr. Bavari from USAMRIID reported results on a combo of morpholino antisense molecules against 3 Ebola genes (L polymerase, VP24 and VP35- targeting 3 different genes to address potential mutational drug resistance) in mice, guinea pigs, and non-human primates (rhesus macaques; Warfield et al.: Gene-specific countermeasures against Ebola virus...). In each case, 1,000 plaque forming units (pfu) of Ebola virus were administered, doses more than sufficient to essentially kill all the animals. In mice, somewhere between 50-500 microgram of drug (about 2-20mg/kg) administered either a little bit before or after the viral infection was enough to effectively protect the animals. In guinea pigs, 10mg of each oligo (~30mg/kg) also protected the animals well. Interestingly, even more protection was observed when the oligos were administered relatively late (up to 4 days) after viral infection compared to administration before viral challenge. While the pharmacologic explanation remains to be worked out, the ability to protect from Ebola relatively late after the infectious event is an important property of an Ebola antiviral.

While mice and guinea pig data are a routine component in the development of Ebola antivirals, success in these models by no means predicts success in primates, including humans, where the rhesus macaque model has become the gold standard. For this reason, 1,000 pfu of the Ebola virus Zaire were injected intramuscularly accompanied by a complex schedule of essentially daily drug injections (12.5mg to 200mg per dose) starting at day 2 before up to 9 days after viral challenge.

Initially, only a single antisense oligo against VP35 was tested which showed most efficacy in rodents. This proved to be ineffective with all 4 animals dying within 7 and 8 days post-infection. However, using the triple combo, 2 out of the 4 drug-treated animals survived the virus with one succumbing to a bacterial infection (= 50% or 75% survival depending on how you look at it). The most common side-effects were thrombocytopenia and an increase in liver enzymes, both of which are consistent with Ebola infection.

Until the Tekmira study, this has been the most advanced published study of an Ebola antiviral drug. One draw-back of the non-human primate studies, however, is that the treatment schedule does not allow for predicting how the triple morpholino combo will perform when given only after the viral challenge. Moreover, protection was not complete.

In unpublished follow-ups, AVI Biopharma and USAMRIID reported apparent advances in the potency of the morpholino chemistry (PMO vs PMO+). When rhesus macaques were treated with the new chemistry for up to 15 days, 75% of animals survived (I assume an n=4) ‘when the treatment period ended’. Clearly, more details are required to ascertain that this represented an improvement over the 2006 study, including survival data beyond the 15 day treatment period.

In light of these results, the SNALP-RNAi study sets a new standard for the efficacy of a prospective Ebola drug. This claim is supported by the fact that the model used in the Tekmira study was essentially identical to the one in the AVI study: rhesus macaques infected with 1,000 pfu of EBOV Zaire and treated with triple oligo combos against the L polymerase, VP24, and VP35 genes (note that any combination of siRNAs can be formulated in one step into SNALPs meaning that it is entirely amenable to rapid response applications). However, in this case the drug (2mg/kg siRNA) was given only after viral challenge, albeit starting already at 30 minutes after the challenge, either daily for 7 days or every other day for 6 days. Moreover, in the daily treatment regimen which is most similar to AVI’s study, all 4 animals receiving the SNALP-siRNA cleared the virus and survived while 2 out of the 3 animals in the alternate-day group survived.

Importantly, this was achieved in the absence of immune stimulation by the SNALP, which was very effectively abrogated by the 2’-o-methylation of the siRNAs. This is notable, because while the 2006 paper on SNALP-siRNA for Ebola in guinea pigs by the same group showed promising efficacy (>60% protection), it was clear that immunostimulation caused by the unmodified siRNAs and amplified by the SNALP was certainly a safety issue then (Geisbert et al.: Postexposure protection of guinea pigs...). Overall, the treatment regimen, 2mg/kg siRNA in SNALP every day for 7 days represents a very stringent test of the safety of SNALP and was very well tolerated, with minor increases in liver enzymes most likely attributable to the viral infection and not the SNALP-siRNA treatment.

It should also be noted that this study employed 1st generation SNALPs which means that the 10 to 100-fold more potent 2nd generation SNALPs as recently reported in Nature Biotech should widen the therapeutic window even more and is important when thinking about safety studies in human volunteers. It is clear, however, that while this study is an eye-opening proof-of-concept of SNALP-RNAi for the treatment of acute viral infections (at least those affecting SNALP-relevant cell types, phagocytic and hepatocytes in this case), any further development (objectives: pharmacology, biomarkers, testing SNALP RNAi at later time-points) towards biodefense stockpiling SNALP-RNAi for Ebola and/or an FDA-approved treatment for accidental needle sticks and sporadic Ebola outbreaks will depend on support by public funding agencies. It is difficult to imagine that this study can be ignored by the US government. The series of head-turning, top-quality SNALP papers in journals like Nature Biotech, Nature, Journal of Clinical Investigations, and The Lancet certainly won’t be ignored by Big Pharma.

By Dirk Haussecker. All rights reserved.

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