Monday, February 21, 2011

RNAi Therapeutics is Dead, Long Live RNAi Therapeutics

You have all seen the obituaries on RNAi Therapeutics. Following the terminations of in-house RNAi Therapeutics efforts by Roche, Pfizer, and Novartis (oh wait, Novartis actually hasn’t stopped developing RNAi Therapeutics, but with 31 targets has more than enough on its plate- minor detail), major news outlets have finally pronounced: RNAi Therapeutics is Dead!

Meanwhile, in the 3-4 years since Roche made its famous commitment, the field has made major progress in reaching the market with Tekmira’s liposomal delivery technology rapidly generating a wealth of important clinical data and showing unprecedented efficacy in the most challenging of animal models for Ebola, Silence Therapeutics’ lipoplex delivery technology pleasantly surprising in terms of its safety and first signs of efficacy, a Chinese group reporting success with RNAi Cosmetics in Wo-Man, and Rosetta Genomics having brought to market a microRNA Diagnostic for Cancer of Unknown Primary that, under normal circumstances, that is proper quality control and marketing, should be a commercial success story. Not far behind, RXi Pharmaceuticals is reporting impressive data for their self-delivering rxRNAs in dermal applications.

By any rational standard of scientific progress, this is more than satisfactory, yet investors and the industry itself it seems have become infected by the Big Pharma RNAi Therapeutics mood swings. Actually, Big Pharma should be in the best position to sweep up RNAi assets as pure-play companies experience financial difficulties. However, it seems that it took less guts for Merck to buy Sirna Therapeutics for more than a Billion US dollars than for Big Pharma today to spend about 10 times less to acquire the two companies that have developed the clinically most advanced systemic RNAi delivery technologies: Tekmira and Silence.

Unfortunately, for RNAi Therapeutics to be able to maintain that pace of progress, it depends on (financial) supporters with deep pockets or, ironically, a spark that will ignite another round of RNAi Therapeutics exuberance. Steady scientific progress superimposed by stone-age fear and greed.

13 comments:

Anonymous said...

Too true Dirk and it's all been very 'testing' for private investors!

Anonymous said...

I must admit that an article in the New York Times last week induced me to sell my stake in Alnylam out of fear that it would continue to decline. I have since bought back %50 but at a higher price. Funny thing is, you couldn't twist my arm hard enough to sell when it was up to $37.

Anonymous said...

Dirk:

You didn't mention Calando's success with its delivery system. Do you consider it to be an important addition to the expanding list of viable technologies?

Dirk Haussecker said...

Private Investors: I'm afraid that only few pure-play companies care somewhat about their investment success. Something the field need to improve upon.

The New York Times article: No disrespect to the author, but I was shocked by what effect such an article could have, even though there was really no new information or special insight in there. It's fair for the general public to learn about what's been going on with RNAi Therapeutics, but for more informed investors who have been following RNAi Therapeutics to sell on an article by somebody who has just tried to understand and summarize recent events- that does not make sense to me.

Calando: Fair comment. The Nature paper last year is part of the accumulating proof that RNAi Therapeutics is pushing ahead in the clinic on multiple fronts.

Anonymous said...

SO what have you done about it Dirk if it all didnt make sense to you. this is how they control the market and stock prices. It looks like your blog aint going to cut it. but maybe thats a good thing while us bottom feeders accumulate at these low prices : ) GOOOOOO BENITEC I SAY MATE.. WE WILL SHOCK YOU !!!

Anonymous said...

Playing devil's advocate: Why shouldn't pharma let pure-play RNAi companies do the heavy lifting? The pharma companies that have invested early in RNAi have precious little to show for it, so far. Why not let Alnylam/Tekmira/Silence prove out RNAi in the clinic before investing? By the time pure-play RNAi companies are done with the dilutive financings necessary to develop their pipelines, they'll be ripe for the plucking. If we're hoping for stunning RNAi clinical results that will spark major bidding wars, that seems rather naive or wishful thinking.

Dirk Haussecker said...

Sure, why not let most of the biotech industry die? It's not a secret that drug development is a long relay and it is easy to put pressure on the early-stage companies without immediately feeling the repercussions at the end. When the overall healthcare sector was in better shape, it was an era where companies made deals that fairly shared risk and reward. Today is vulture capitalism gone wild where business development people in large companies have nothing to gain and all to lose from a risky investment that does not pan out. The best deals are those where everything has been validated and you only pay what it has cost the small company to get there- or less. Read a telling story here: http://www.xconomy.com/san-diego/2011/02/17/avalons-kinsella-calls-out-big-pharma-for-bad-behavior-thats-pushing-biotech-ventures-almost-to-point-of-extinction/?single_page=true

At the same time it is fair to remind ourselves that the RNAi Therapeutics sector also underwent an era where many companies raised expectations beyond belief and some Big Pharma company made bad deals as a result. All I am (and others are) saying is that the pendulum has firmly swung to the other extreme.

Mike said...

Dirk,

I know you have followed Rosetta Genomics for a while. Like you, I have viewed them as having good science all the while being terribly mismanaged as a company. Becker & Drapkin (actvist investors) reported a large stake in them after the bell (it is on the ROSG website). Just google Becker & Drapkin and you will see they like to shake things up at companies they invest in.

Dirk Haussecker said...

Mike: Thanks for the ROSG update. A number of pure-play RNAi companies would benefit from having such activist investors. In the case of ROSG, I would hope that they shake things up at the commercial end of the business, focusing on the 'production' and distribution of the mirView Mets tests.

BTW, some of the pure-play RNAi companies are getting so small that it might also make sense for high networth investors to organize and make their ownership presence felt. A lot of these folks have relevant expertise (drug development and corporate).

Enumerate said...

First of all, thanks for your continued, measured, intelligent blog.

Secondly, the cycle of boom, over-investment, bust and recovery to greater heights is a common dynamic in financial systems. It happened in video games, computers, software, Internet communications. It is now happening in RNA chemistry!

The trick is to understand, with BigPharma, we are effectively dealing with a fashion industry and herding behaviour amongst the fashionista.

Reading your blog - you have called for caution (at the right times) and are now calling for optimism (at the right time).

It is also useful to point out that the technology cycle for telephony was 100years, for the personal computer 20years, for RNA chemistry ... 5 years?!?

Anonymous said...

In the last week city of hope announce new stage of HIV Rnai trial, and also Pfizer have decided to continue with their HCV Rnai effort. I think the journos writing these 'rnai is over' articles are a bit lazy

Gene Genie said...

Anonymous, "Pfizer have decided to continue with their HCV Rnai effort."

Whilst I certainly hope this is the case, I have been unable to verify this. Would you mind posting a link? Thanks in advance.

Keep up the good work Dirk. Cheers from Downunder.

Anonymous said...

p10 of the Viriathus Overview report for Benitec under Dirk's google news rnai links.

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.