In case you have not noticed: “Big Pharma” is slowly coming back to RNAi Therapeutics. This marks a fourth phase in the delicate relationship of the small pure-play RNAi Therapeutics companies with their larger counterparts.
The relationship in the first phase (2002-5) may be characterized as one of benign neglect and certain curiosity. Sure, RNAi was a hot emerging scientific area, but Big Pharma preferred to let the small companies kick the tires and take the risk while continuing to do what they were most comfortable with: small molecules along with some monoclonal antibody work. The patent cliff still seemed like a management generation away.
In the second phase (2005-8), some pharmaceutical companies like Novartis and Merck started to see the light. It became apparent to them that as small molecules alone won’t cut it any more that a technology like RNAi Therapeutics may ideally fit into the personalized medicine paradigm of the future. Following their initial investments in the space, other companies like Roche, Pfizer, and Takeda began to worry about being left behind and looked to catch up, in some cases frantically so. The Nobel Prize added fuel to the fire and a small bubble developed where investments were often not made based on the best science. Big Pharma companies wanted to be seen as being at the fore-front of this technology and were happy to advertise their association with the technology in public.
RNAi Therapeutics did not fare well in this climate. As larger companies realized that they made some bad investments in the technologies, some probably feeling that they have been deceived by some of the pure-play companies. I believe that the blame is to be shared between Big Pharma companies too lazy to undertake not only proper IP, but also scientific due diligence, and the bad actors in the RNAi Therapeutics industry of which there were without doubt quite a few (but definitely decreasing in numbers now).
It was then especially those Big Pharma companies that got into the game relatively late and consequently with often less conviction in the technology that were the first to curtail their RNAi Therapeutics spending. The most dramatic example of this is Roche spending north of half a billion
Unfortunately, the backlash hit the entire industry hard, including those few companies that have done the real work underlying many of the promising drug candidates that have recently started to enter the clinic.
There are, however, increasingly signs that companies like Takeda, BMS, and Genentech are willing to show support for the technology (phase 4). It must have occurred to these companies that RNAi Therapeutics has been making some progress over the last couple of years in addressing issues such as delivery, immune stimulation, and building clinical experience, all the while prices for the technology were plummeting to what I consider highly attractive price points.
It has also become clear that in terms of RNAi trigger structure and IP, Alnylam is not the only game in town any more.
From a Big Pharma perspective, this is probably the best time to invest. Pipeline productivity problems remain the same. Many of Big Pharma’s current blockbusters based on small molecules turn out to bring little or no benefit to patients and if they are honest to themselves, the future of healthcare won’t support, i.e. reimburse, me-too drugs with only little if any incremental benefit even if you can take them only once a day in pill form. I believe this will be borne out in the multiple sclerosis field where oral pills are all the rage at the moment and some analysts believe this to be the end of the incumbent treatments that are administered parenterally. In the end, medicines that stall and reverse severe diseases will win out, and for scientific reasons, targeted technologies like RNAi Therapeutics should have an edge. There had been similar concerns about technologies like monoclonal antibodies, and now cell-based therapeutic cancer vaccines, but in the end social acceptance is greatly driven by how much the industry establishment and thought leaders endorse a technology.
It is therefore critical for Big Pharma to support pure-play RNAi Therapeutics companies. All the important innovations in the field have come from the smaller companies, and if those that have developed them disappear, everybody will be worse off. While I expect Big Pharma investment to increase from now onwards, especially in light of the clinical progress that should become particularly apparent over the next couple of months, this time should be different from the 2005-8 scramble to buy a piece of RNAi Therapeutics. The focus will be more than ever on quality, and companies that have shown hands-on ability to overcome the challenges in developing viable RNAi drug candidates should be well rewarded for their contributions to the space.