Thursday, March 21, 2013

Whoa! AstraZeneca Pays RNA Therapeutics Start-Up Moderna $240M

In the age of rare/severe diseases in drug development and personalized medicine, RNA Therapeutics are enjoying broad interest like never before.  Following a series of RNaseH antisense, splice modulation, microRNAs, and RNAi Therapeutics deals with large pharmaceutical companies, the AstraZeneca-Moderna Therapeutics news today marks another high water mark in the deal-making.  According to their agreement, AstraZeneca will pay Moderna Therapeutics $240M in upfront alone for rights to Moderna’s technology in the cancer and cardiovascular/metabolic disease areas (40 targets).   

AstraZeneca’s Externalized RNA Therapeutics Efforts

The deal with an innovative biotechnology start-up while in the process of shedding yet another few thousand employees, particularly in internal R&D, illustrates AstraZeneca’s R&D externalization trend.  RNA Therapeutics here seem to play a key role as supported by additional recent multi-million dollar deals in the space with ISIS Pharmaceuticals (December 2012) and PTC Therapeutics (June 2011) in oncology.  Unfortunately for RNAi Therapeutics though, it has been left out so far from the AZ’s deal bonanza.  Only in 2011, it wrapped up a collaboration with UK-based Silence Therapeutics.  Still, as AstraZeneca faces the challenge of how to deliver messenger RNAs to the liver and cancer, I expect RNAi Therapeutics delivery companies to financially benefit from AZ's mRNA investment soon (not just for mRNA, but also for RNAi delivery).

Moderna’s Technology

Moderna’s approach is a gene therapy one.  However, while classical gene therapy involves the use of DNA vectors for expressing therapeutic proteins, Moderna aims to circumvent the need for DNA, which have certain regulatory and safety drawbacks, and deliver instead messenger RNAs encoding for the same proteins.  This, in fact, is not a new idea and particularly popular in the immunotherapy field (albeit delivered ex vivo here, by electroporation). Duke University for example had a clinical RNAi Therapeutics program that involved the transfection of mRNAs along with siRNAs (cancer vaccine).

A 2013 Nature Protocols paper by the company’s scientific co-founder Derrick Rossi also leaves me scratching my head as to why AstraZeneca concluded that Moderna’s IP was worth $240M to them.  According to the protocol, the mRNAs are generated by normal in vitro phage polymerase transcription as you would do in the lab using Life Technology’s MEGAscript kit.  The only difference from the standard protocol may be that modified CTPs and UTPs were included.  This is supposed to mitigate the immunostimulatory potential with RNAs just as in RNAi Therapeutics and also contribute to the stability of the long RNAs.  

Based on the fact that neither the concept of mRNA Therapeutics are novel nor the RNA modification strategy unexpected, I expect that Moderna has yet to come out with their secret sauce and that the Nature Protocol may be misleading.  I therefore look forward to studying the patent applications, two of which curiously just published today.  It must be the IP that explains why AZ took a $240M license, to get a sense of the secret sauce.  But still, given the hundreds of nucleotide modifications available, it seems hard to fathom that Moderna's a blocking IP position, and why pay $240M if not a blocking one?

Need for Delivery

In addition to AstraZeneca’s interest in cardiovascular/metabolic disease and cancer, the state of the RNA(i) delivery technologies explains their choice.  Compared to RNAi Therapeutics where small RNAs are involved, the longer mRNAs face an even steeper cytoplasmic delivery challenge.
The liver, of course, is a key target organ for metabolic and cardiovascular disease.  Among Arrowhead’s DPCs, Alnylam’s GalNAcs, and Tekmira’s SNALP, the most advanced RNAi delivery technologies for the liver, it is essentially only Tekmira’s SNALP technology which I regard to be readily applicable to mRNA delivery (also for cancer delivery).  Conjugate approaches such as DPCs and GalNAcs are disadvantaged for mRNA delivery because they would provide no extra protection to the long, fragile mRNAs.  Liposomes by contrast provide such protection by wrapping around the RNA.

I expect to hear more about Moderna’s and AstraZeneca’s mRNA delivery strategies soon.  I, for one, do not believe that Tekmira’s shares are trading up by 8% on strong volume on the back of a SeekingAlpha article.

Other evidence that RNA Therapeutics (and Gene Therapies) Are Hot

ISIS Pharmaceuticals yesterday presented phase I data for their spinal muscular atrophy (SMA) splice modulation drug candidate at the annual AAN meeting.  This compound is partnered with BiogenIdec.  The results from the single-dose PK-oriented study suggest that fully 2’-MOE phosphorothioate oligos are well tolerated in the CNS and that a once-a-year/once-every-half-year dosing regimen may be possible: phosphorothioate oligos sit like a rock in the CNS when intrathecally administered.  In addition to the hints of clinical efficacy at the highest dose level (9mg) presented at the conference, what makes me optimistic about this program is that relatively little (compared to RNaseH) phosphorothioate molecules seems to be required based on the pre-clinical results.

In other news, cancer drug developer Celgene will work with gene therapy company bluebird bio on cancer gene therapy.  Although financial details were not disclosed, they were probably substantial (wild guess: $20M) given the broad nature of the collaboration (multi-year, multiple targets). 


Anonymous said...

Do you have any input to the reason why there is relentless selling in the stock ... its almost like the data they are presenting was leaked and its bad or they are tapping their shelf after the close . I mean this should be trading north of 5 with all this vol today

Anonymous said...

2 relentless sellers,still with more than 1m to sell.Maybe invesotrs are more concerned about the heavy need for immuno-suppressants with all tekmira delivery and also Alnylam's clear attempts to develop their oen in house delievery.Strip out the delievery and Tekmira's cupborad is hardly bulging.

Dirk Haussecker said...

Strange, I'm not all that worried about Tekmira's share price performance. Nothing compared to what we've gone through the prior 2 years. The Pharma trend is in their back and Tekmira in good financial position.

The Ebola trial was without immune suppressants as far as I am aware.

BioDueDiligence said...

Don't forget about the AZN deal with RGLS as well:

They actually paid more upfront per target to Regulus (but only 3 targets vs 40!)

Anonymous said...

Isn't the Ebola trial only in monkeys? That, plus the nature of Ebola probably lowers the safety bar. Does ALN-PCS02 make use of steroids with its lower dose?

Tekmira has been talking forever about its next generation lipids with lower toxicity and higher potency. Have they revealed any novel lipids they've developed on their own after MC3? Time for them to prove they've got the goods, IMO.

Anonymous said...

"Isn't the Ebola trial only in monkeys? That, plus the nature of Ebola probably lowers the safety bar."

This is public info. They already have done a phase 1 in humans. They need to do safety in humans in phase 1/2.

Anonymous said...

What is going on with questions about the use of RNA in the treatment of Parkinson's? Some researchers are claiming that it makes Parkinson's worse. Something about the target of alpha synclein not being a suitable target.

Anonymous said...

Does Moderna have any published papers?

Anonymous said...

the real question is why would azn pay 240 million for something that is preclinical?

Anonymous said...

My guess is that AZN is desperately grasping for some magic beans to address their patent cliff issues.

Anonymous said...

This is waste of money from AZ. Moderna technology is untested. A former and current employee review at Glassdoor indicates otherwise, where employee alleges an in-efficient management, manipulation of data, exaggerated claims, dubious scientific practice to produce questionable data. No drug will ever come out of Moderna. Alnylam failed with similar claims and practices. Moderna is set for failure as I read review by former and current employees. AZ must not have done proper due diligence or its new CEO is taking AZ to same fate as Roche, that more troubles.

Anonymous said...

@ An0ymous
"Does Moderna have any published papers? "

Yes, Derik Rossi published a paper BUT no one was able to reproduce it. So the foundation of Moderna is based upon a publication which could not be reproduced by others.

Dirk Haussecker said...

You would think that AZ reproduced a few fundamental experiments before taking such a license.

In general, I also see a number of warning signs as some here do. My main beef is with how a start-up company like Moderna can be filing dozens if not hundreds of patent application. It almost looks like an abuse of our patent systems that by filing a bunch of broad patents, possibly based on junk science, others, possibly with better/more proven technologies, do not want to enter space for legal reasons.

Anonymous said...

You are correct, AZ should have at least tried to reproduced a couple of experiments.

I read on one of the blog that AZ CEO met Moderna during last week of Dec and it immediately became his first priority. I hate to say, but AZ chief must be living I a dream world to believe Moderna story on a first meeting. A Google search about Moderna would have raised a lot of eyebrows.

Anonymous said...

"the real question is why would azn pay 240 million for something that is preclinical?"

Most of it is not even preclinical. It is in the concept stage with nucleic acid bases which may not even incorporate into mRNA or produce any kind of desired results. It is a questionable dream science based upon a publication on Derik Rossi's publication which many could not reproduce.

Anonymous said...

Dirk, Are you aware of Ethris, a German company that has similar mRNA based platform technology? Based on press release on the company website, it seems that Ethris has established a research alliance with Shire earlier this year, for developing novel mRNA based therapeutics.

I agree with the other commenters that AZ is nuts to pay this kind of $$ for an early stage research/commercial alliance. (Unless of course, we are missing some crucial details!)

Anonymous said...

Moderna technology is not proven. Their data is questionable. One of former director at Moderna told me that Moderna CSO manipulate data, and he is a worst scientist. He does talk for the sake of talk. AZ is throwing the money down the drain out of desperation. Let's look forward to a Astra Zeneca Generic Therapeutics.

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