Yesterday, it was announced that AstraZeneca is paying microRNA Therapeutics company Regulus $28M
for three preclinical-stage microRNA targets. This is certainly good news not only for the field of microRNA Therapeutics, but also oligonucleotide
therapeutics in general which is well on the day to be the third major drug development engine after small molecules and monoclonal antibodies.
After GSK and
Sanofi-Aventis, it is the third of its kind for Regulus and there were similar ones between
Miragen and Servier late last year and Santaris and GSK before that. The number of such deals, each usually involving a number of microRNAs, illustrates how far the field of microRNA biology has come in just 10 years from the discovery of microRNAs in humans to yield promising therapeutic targets that number in the dozens. In fact, microRNA Therapeutics has been more
successful than the more straight-forward RNAi Therapeutics approach in attracting the partnering interests of Big Pharma lately.
On the
other hand, it’s been now five years since the founding of Regulus Therapeutics, and still no program has made it into the clinic. Such a performance is certainly not good enough
to support an IPO these days for which the company, based on job postings,
appears to have had ambitions for for some time now. With remaining ~25M in cash and an annual burn
rate of around that, the revenues recognized from the AZ deal may well be
the substitute for a public offering.
As
it was not disclosed how much of the $28M was for equity in Regulus, other than
the cash added to Regulus’ balance sheet it is really difficult to tell
whether the dealmakers at Regulus will be all smiles about it. What’s more, the miR-33 atherosclerosis
program which had yielded exciting data (including in non-human primates) in enhancing
reverse cholesterol transport with a subsequent reduction in plaque size seems
to be spoken for already at this early stage (before the magical phase II value-inflection point).
It is
unclear what is causing the apparent delay of Regulus progressing programs into
the clinic. Is it the complexity of
microRNA biology where each microRNAs often has dozens of targets, or has it
something to do with the concern that the 2'-fluoro modification initially favored by the company may be genotoxic?
AstraZeneca’s
Return to ‘Proper’ RNA Therapeutics
When
AstraZeneca, in its farewell to Silence Therapeutics in January, said that the
Silence effort was ‘part of its overallstrategy to explore this important therapeutic approach [i.e. RNA
Therapeutics]’, I took it to mean
that the Silence projects may not be their top priority in this regard and that
it already had other oligonucleotide technologies and companies in mind.
Confusingly, half a year before that AstraZeneca entered into a ‘small molecule RNA Therapeutics’alliance with PTC. Beware
of companies, particularly prevalent in the (cancer) stem cell field it seems, which claim to be pursuing new platforms and treatment paradigms, when the
innovation actually rests on just tying pre-existing molecules to new biological rationalizations.
Classic
Big Pharma I thought then: advertising innovation, but really sticking to its
old, rusty guns; and if AstraZeneca is widely thought to have the industry’s worst
productivity, you have to look no further for its causes.
Yesterday’s
news was therefore quite encouraging in that AstraZeneca has not given up on developing ‘proper’ RNA Therapeutics by which I mean that nucleic acids are the
therapeutic agents. Whether the stream
of positive clinical results in oligonucleotide therapeutics (and vaccines)
have provided AZ encouragement to go down this path is unclear, but they certainly
did not hurt. Maybe it will even make AZ re-energize its RNAi Therapeutics efforts (e.g. for oncology or
respiratory disease).
Next post: Tekmira's very busy quarter.
10 comments:
Agree - Regulus IPO is not imminent. Very curious to see whether the valuation continued to grow at its torrid pace with these latest investments by AZN and BIIB. Will be interesting - now Regulus is a biotech owned by five biopharma companies and zero VC investors. Who makes that exit happen?
Its difficult to judge what the depth of AZ's commitment to the oligonucleotide space may be.
They are flailing in the foam.
Dirk,have you any idea of the pre money value Regulus will look for in the IPO?
I would guess in the 70-90M range.
What kind of market cap. would this carry at a guess?
If the IPO is successful it should have a good effect on the price of RXi since their single stranded IP is designed for mRNA.
The Regulus valuation is possibly 3x what you thought on 20th August and more money to be raised.Does this surprise you?Does it augur well for any other listed RNAi plays other than Tekmira?
Indeed, Giles, I stand corrected. It's difficult to pin down the absolute value of developmental-stage biotech companies, but in a relative sense the $200-250M market cap Regulus aims for makes a mockery of Tekmira's $40M market cap and possibly that of other RNAi Therapeutics companies, too.
It is rather curious that AZ does not seem to have done their due diligence concerning miR-33. Mass General has very strong miR-33 IP, which was actually sought after by Regulus. One wonders what might happen if Mass General decides to challenge the NYU/Regulus miR-33 patents at the USPTO...
Tekmira's and Benitec's market caps of $40M & $16M respectively are well undervalued compared to other RNAi players
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