Sunday, December 14, 2014

ISIS and Alnylam Starting to Walk the Talk

Talk is one thing, acting on it another.  This has also been true for RNA Therapeutics industry bellwethers ISIS Pharmaceuticals and Alnylam when they talked about their belief in the revolutionary nature of their technologies, but their actions suggested they were plagued by self-doubts.   Following continued improvements in their platforms and a string of clinical successes (ISIS-ApoCIII, ISIS-SMA, ISIS-FXI, ALN-TTR02, ALN-AT3 etc), the gloves are off as they strive to achieve Genentech-type $50-100B biotech glory within a decade by expanding the scope of their development programs and retain increasing commercialization rights.

$50-100B is around the market cap that a few dominant players often achieve for a technology area that 'has made it'.  In the case of ISIS Pharmaceuticals, however, I can foresee that, due to the currently wider choice of modalities and tissues amenable to single-strand antisense technology (incl. single-strand RNAi), full maturity could result in the world’s largest company by market capitalization.  

To get there, however, it is important for the companies to have a strong believe in their own technologies and this in drug development means retaining more and more of the commercialization rights instead of giving away most of the upside by early-stage out-licensing and partnering.

Alnylam- it’s all about the GalNAc (at least for now)

In the case of Alnylam, this shift has further been emphasized last week when they introduced the STArs strategic initiative, expanding from the original orphan genetic applications to developing medicines for more common illnesses such as in the cardio-metabolic arena as well as some of the viral hepatites (B,D, and E). 

When Alnylam gave away the PCSK9 target to The Medicines Company in early 2013- which parenthetically is making MDCO along with RGLS arguably the best 2015 RNA Therapeutics investment idea on a risk:reward basis- the company was still unsure about its own position in the pharmaceutical universe with a first-generation GalNAc delivery technology as its foundation which required large amounts of siRNAs and injection volumes.

Now, with remarkably potent and long-lasting versions of GalNAc-siRNAs, convenience and safety have improved so much that RNAi has become highly competitive even for the very common cardio-metabolic disorders such as type II diabetes and high LDL cholesterol.  With that confidence, expect RNAi to shatter some of the former domains of a long-time biotech darling it has long been living in the shadow of: the monoclonal antibody (ALN-CC5 and ALN-PCSK9 being the first two examples of that).

ISIS- no end in sight

In the case of ISIS, this confidence shift was emphasized when they announced that instead of partnering away the lipid franchise as they would have done before, they are now setting up a semi-independent commercialization entity around their ApoCIII-, Apo little a-, and ANGPTL3-targeted drug candidates.

It was a confluence of factors that turned me from an ISIS skeptic to an acolyte earlier this year.  Along with first signs that ISIS was prepared to actually sell drugs themselves, in terms of scientific progress these factors should result in an exciting pipeline centered around targeting not 'only' the liver, but also the many severe neurodegenerative diseases.   

Add to this the ever expanding target space for and opportunities with antisense, it is difficult for me to see where all this should end as long as ISIS can 1) remain independent; 2) retain its industry-leading position; and 3) the healthcare market can pay for its medicines.  Time to dream BIG.

4 comments:

Anonymous said...

That is why I like ARWR too. They feel very confident with their candidate ARC-520. They want to take it alone to the market. They are not outsourcing risks, because they see no real risks.

Anonymous said...

Benitec muscling up as well. The success they're having in their lung cancer program is amazing according to recent announcement.

HCV trials steaming ahead and about to dose its third patient.

Anonymous said...

Ridiculous to suggest a spruik by Cramer is responsible for ISIS bull run today.

Everyone now knows what Cramer represents. Associating oneself with him puts them in the same bucket of manure as him and his ilk.

Suspect ISIS will go the way of the dinosaur soon. ARWR looking way more solid.

Anonymous said...

ISIS down five bucks plus today. According to the logic employed by Dirk, it is a fair assumption to say Cramer didn't mention it on his program.

Or more like, all the downside is Feuerstein. All the upside is Cramer. After all, it is the media hacks that control the decisions of buy and sell in the market participant no matter what stratum he is occupying.

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