If you believe, like I do, that the RNAi Therapeutics money
ought to be
in delivery, the track record suggests that you are mistaken:
with the exception of what was euphemistically referred to as a $65+10M 'restructuring' of the agreement between Tekmira and Alnylam, over the last 4 years there has not been one deal
where an RNAi delivery company reaped substantially non-dilutive funding for
their delivery technology. By contrast,
the money was to be made in RNAi triggers and especially in
partnering/licensing out RNAi Therapeutics candidates (for more details, see the
RNAi Therapeutics in 2013 Report).
The failure of companies like Tekmira, Arrowhead Research,
Silence Therapeutics, and Marina Biotech (plus many others not so much in the
spotlight), to capitalize on the uncontested value of delivery may be due to
one of the following factors:
1) their respective delivery technologies do not meet the expectations
of the pharmaceutical industry;
2) RNAi Therapeutics has lost its attraction as a platform
technology. Consequently, an investment in platform technologies such as
delivery is not compelling;
3) Potential partners want a One-Stop Shop. Licensing in
delivery AND the RNAi triggers separately can be burdensome and may mean decreased
potential profits down the line (royalty stacking);
4) intellectual property issues around the payload when monetizing
delivery; Alnylam and ISIS have famously sued Tekmira for their delivery deal
with BMS (litigation terminated now) claiming that Tekmira was indirectly selling
RNAi triggers it did not own.
I believe that all the above factors have contributed to some
degree with the relative weight of the issues varying depending on the specific
technology, geographies, and other company-specific factors such as the trade
secret litigation between Tekmira and Alnylam that has delayed deal flow related to the most advanced RNAi delivery technology.
However, RNAi Therapeutics is regaining favor as a platform
technology and I am hopeful that this will translate into the long overdue
transactions, also involving the SNALP and DPC technologies by Tekmira and Arrowhead Research, respectively, which have technologies of clinical maturity (disclosure: I am a shareholder of both companies). The two most likely customers here are
Novartis and Merck. Novartis has an
active interest in RNAi Therapeutics, but the scientific and patent literature
suggest that they have no tangible delivery technologies and their internal
efforts are not even half-hearted so that I expect them to go out and buy in the
technology instead of replicating Merck's inreasingly costly mistake of investing hundreds of
millions in internal delivery research, including SNALP and DPC lookalikes,
when the combined market caps of the originator companies is a fraction of
that (please somebody explain that logic to me).
Nevertheless, RNAi delivery companies cannot rely on such
platform partnering and need to push ahead with creating RNAi Therapeutics
candidates. This last mile is currently the most rewarding way to monetize on their delivery technologies. Alnylam has long understood this (see recent partnering around TTR, PCSK9 and VSP), and is now reaping the
rewards.
What Alnylam has done, however, is no magic, far from it: identify
genetically attractive gene targets, formulate into established delivery tech (e.g.
SNALP, GalNAc), and do some biology around them to build a scientific story to be sold to the pharmaceutical and investor world. With an established delivery technology, the
hard work, or maybe better, the most uncertain factor has been removed, so it's
pretty smooth sailing from there as long as the gene target is good and desired by the industry.
It is thus ironic that platform companies get loved for
their specific product candidates (not just in RNAi Therapeutics it seems), and
not for the technologies that critically enabled them. For RNAi delivery
companies, it is important to swallow this scientific toad and invest the
additional $5M or so it takes to build that IND-enabled package to reap disproportional rewards.
5 comments:
Might I respectfully suggest you have a naive view of drug development - coming from an academic environment? No biotech has gotten rich from licensing its technology (look at ADC companies, for example - and that technology has made it to the market). "5M or so", "smooth sailing" - let's hope we don't look back on those words a year or two from now and cringe.
Indeed, drug/RNAi Therapeutics development is simpler than some business folks would like you to believe to justify their existence.
Alnylam hasn't done badly from licensing their InterfeRX technology and such...
Alny has done great, it's just that delivery was not done yet.
And it will do much more in the future. Especially if TTR will become a billion dollar drug
Alnylam's effusive praise for LNP has turned to the disdain one commonly voices after contracting gonorrhea from their wife. Amazing how something once marketed as their own has no value to them following settlement with Tekmira. As my dear Mother used to say, "Don't cut off your nose to spite your face." Xman
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