Monday, April 25, 2011

Tectonic Shifts in RNAi Therapeutics

As consolidation in RNAi Therapeutics in the Old Economies continues, the balance of power is rapidly shifting towards the resource-rich and growing economies of the Far East where national RNAi champions are set to make their mark on the international RNAi Therapeutics scene.

After some notable mergers between private and public RNAi companies (Intradigm-Silence, Cequent-Marina Biotech), and the decision by some, albeit not all, Big Pharma companies to turn their backs on RNAi Therapeutics development in-house, a contraction of the publicly traded pure-play RNAi companies seems inevitable. Arrowhead Research (ARWR), despite its name, has long stopped internal RNAi research and its technology is getting stale by the day, the captains of RXi Pharmaceuticals (RXII) have decided on a course that is entirely incompatible with it continuing to be an RNAi platform company, Marina Biotech (MRNA) despite its good intentions signaling to the world almost daily that it is in distress and has not found anything worth focusing on, and the executives of Rosetta Genomics (ROSG) personally making sales calls as the company continues to bleed money.

Some of these companies do have interesting technologies worth funding in my opinion. RXi’s sd-rxRNAs are well differentiated and complementary to the established RNAi trigger structures, Rosetta had established a prolific microRNA diagnostics machine, and Marina Biotech built a very able and what seems to be enthusiastic RNAi Therapeutics team, but probably invested too aggressively hoping for an early turnaround in RNAi sentiment that would lift all boats. There may be a rationale for conserving some of that value by a) spinning out (RXi) and/or merging technologies that are synergistic (ROSG); and b) selling themselves for a small premium for its practical RNAi research expertise (MRNA).

The pure-play survivors may be the following: Alnylam, Tekmira, Silence Therapeutics, and Benitec. Alnylam is obvious, because of their cash and an aura that makes investors and pharmaceuticals partners pay a premium for their assets (I expect the VSP and Atu027 deals to reflect this). Tekmira as the delivery experts and also benefitting from diversification tendencies in the resource-driven Canadian economy, an investor base, however, that Tekmira needs to tap more aggressively. Silence Therapeutics with its recent progress in delivery, some valuable RNAi trigger IP, and supported by an investor base that has widened in the wake of its merger with Intradigm to cover the US, UK, and Germany. And finally Benitec which has positively surprised me by its recent recapitalization which puts it again into the category of drug developers and not just an IP play. Certainly, the re-issuances of a fundamental ddRNAi trigger patent have helped, but I don’t think this recapitalization would have been possible without resource-hungry China buoying the Australian economy.

Alnylam: RNAi trigger IP, brand and industry connectivity.

Tekmira: problem solvers, delivery powerhouse.

Silence: RNAi experience, broad investor base.

Benitec: ddRNAi powerhouse, Australian economy and proximity to China.

Benitec probably best symbolizes the shift in RNAi Therapeutics towards the countries with most economic growth. While its commercial focus may still be with the traditional markets for innovative medicines (US, Europe, Japan), its research activity, once in the US, has shifted to the East as illustrated by its collaboration with Biomics on HBV. This collaboration both taps into the geographic proximity with China as well as the growing scientific expertise that can be paid for with the strong Aussie dollar.

Don’t be surprised if the leading RNAi Therapeutics candidate for scarless wound healing will be developed in China (Sirnaomics), and not by RXi in the US, or if the first RNAi agent with human use will be marketed in the Far East and not the US or Europe just as it happened in gene therapy. Some of it may be explained by less stringent standards of patient protection in these countries, but it would be a mistake of complacency to use this as the only explanation.

Whether it will be Biomics, Sirnaomics, BMT, or others remains to be seen, but the flow of investment dollars firmly points towards a global shift in RNAi Therapeutics development and commercialization. Smart minds and outstanding technologies are one part of the equation, financial backers with deep pockets the other.


Mr Squiggle said...

Thanks for your informative blog Dirk of which I am a regular reader. I am a shareholder in Benitec. Their recent fully underwritten renounceable rights issue will see them with $AUS8million, enough for 2-3years and money to progress 3 key programs to the clinic, one of which is projected to enter human clinical trials within 2 years. I know things are bad for all companys involved with RNAi at the moment but I think I'm seeing things when I look at their market cap of $AUS12million. I'm intending to break open the piggybank for the rights issue, but lack of interest from rivals such as Alnylam or the major players is making me nervous. Especially Pfizer who are keeping Tacere in the dark regarding their HCV candidate TT-033, originally acquired from Benitec. Would they really let such a golden opportunity pass them by? What am I missing here?

Dirk Haussecker said...

Personally, I would not count on Pfizer for continued R&D support as they are quite busy shrinking. Even if Pfizer continued to support the Tacere program, it would be more an endorsement of Benitec's technology and have less an impact on Benitec's financial situation.

PS: To clarify, after the re-capitalization, Benitec's market cap should be closer to $AUS24M?

Anonymous said...

Pardon my ignorance, but what's the deal with silence therap. (SLN)?

Why are they trading so low (sub 20mm) considering the deep financial backers?

Dirk Haussecker said...

I was wrong on Silence. Assuming the Company protects shareholder interest as they should, there are few ways to explain the timing other than that the ASCO results will be quite bad.

Dirk Haussecker said...

To add to that, there must be some deep pockets somewhere if you raise $10M. What is clear though is that the retail shareholder has lost once again.

Anonymous said...

It's clear that these DNA directed shRNA production methods are not going to succeed. This is just another form of gene therapy, and it's wishful thinking. Similarly, counting on bacteria to deliver RNA is equally foolish.

Big pharma will avoid these like the plague, and they stand a minimal chance of approval, and if approved, will be minor players in any therapeutic application. They know that the risks will outweigh any rewards, and the only reason they exist was to enable funding for academics who pursue them in the first place for research funding purposes, and only later got wise and decided to monetize their efforts in private companies.

The other approaches, LNPs, SNALPS, etc. are equally fraught with issues, primarily immune stimulating potential, and finally, even if the acute issues are addressed, no one has even begun to address the longer-term chronic implications of these therapies...i.e. what is the fate of all these novel lipid-like or polymeric materials. This will require longer-term safety and tolerability studies, and we're currently only in the first innings of the technology essentially only proving the concept in humans. There is a long road for these systems to become commercial realities.

This is why the field is currently in a tail-spin and crashing as we watch.

Dirk Haussecker said...

On ddRNAi: It's not quite so clear to me. If you followed the gene therapy space, there have been quite a few notable clinical successes recently (ocular, bone marrow, and metabolic disorders, and more in CNS to come) and the pharmaceutical industry (Sanofi, Pfizer, GSK etc) is clearly getting interested.

On RNAi Rx as an accepted pharmacologic agent: Instead of fear-mongering, just treat RNAi Therapeutics as any other class of drugs as they go through the clinic. Shifting the paradigm is hard, of course, lots of vested interests to overcome. Oligonucleotides, lipids, and pegylation...sounds quite harmless to me, much more harmless than the profile of many approved small molecules and monoclonal antibodies.

Jerry said...

Re: Arrowhead.
Dirk, I am surprised at how glibly you dismiss ARWR:
"Arrowhead Research (ARWR), despite its name, has long stopped internal RNAi research and its technology is getting stale by the day,...."

Could you elaborate? I may have been naive, but I liked the recent streamlining of the congolmerate and focus upon nanomedicine. Do you feel as negative about the other nano aspects of the company as you apparently do about their potential in RNAi therapeutics?

Dirk Haussecker said...

Jerry- I don't mean to discourage the company or investors and curtailing R&D may not have been a choice taken lightly. But from my perspective, with no active R&D and an ageing pipeline asset stalled in the clinic, how do you think the company can ever expect to license out the technology?

Gene Genie said...

I dont know why it is clear shRNA will never succeed ? Nature has developed 3 ways to deal with disease , medical science has discovered and developed these in reverse order . Small molecules almost all are derived from plant chemicals eg Aspirin , taxol , these chremicals or hard wired immunity is the reason rice has twice as many genes as humans. Next came antibodies , an adaptive immunity , is it no coincidence Benitecs white Knight investor is the same person who brought Bristol Myers Squibb to Inclone when that company had a 20 m market cap and monoclonal antibodies were just a pipe dream ( Inclone was taken over by J&J for 7.3 billion), shrna was the first of natures ways to treat disease and for half the time of life on earth was the only immune process as life was unicellular , it was the last to be discovered but quite possibly will be the most effective of the three approaches its just at the earliest stage of development. It has the potential to deal with everything from antibiotic resistance to hereditary genetic disorders. Look at the thousands of successes in the use of this approach on the research side, I think only time will tell but I would not bet against mother nature.

Anonymous said...

AMT's apparent progress seems to concur with your thoughts Gene Genie.

Anonymous said...

try again:

Dirk Haussecker said...

Yes, it will be interesting to see AMT's progress in ddRNAi. I had read their recent paper on the knockdown of ApoB in mice. There is certainly room for technical improvement at AMT on the RNAi design side.

That's also where I believe Benitec is (still) missing the opportunity to build more in-house ddRNAi expertise. In addition to a license, they ought to be a preferred collaborator with one of the gene therapy delivery companies.

Anonymous said...

Benitecs beefed up scientific advisory board just had its first meeting -apparently a big boost in the area you highlighted is underway - delivery AAV , aptamers etc . The new management, board and recapitalization of this pioneer company not to mention the recent granting of core European patents ( which the media seems to have missed) indicate this company has been reinvigorated and is rapidly becoming a class leader,it could well become Australia's next Mesoblast ( incidentally the company it was negotiating to merge with in 2009).

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