RNAi Companies Ought to Look Beyond Their Platform

This week, Alnylam announced in their roundabout way that it has discontinued the development of ALN-HBV for the treatment of chronic HBV infection.  Instead, it has come to an agreement with well-funded start-up Vir Biotechnology to select a new GalNAc-based RNAi compound, ALN-HBV02, which Vir will largely take control over clinical development.  Alnylam meanwhile retains considerable back-end loaded opt-in rights, milestones and royalties.  

As alluded to in a post last week, ALN-HBV seemed always doomed to fail due to target site selection issues. Also, Alnylam’s heart never really was into ALN-HBV with project leader Sepp-Lorenzino functioning as a one-woman show while competitor Arrowhead mobilized considerable internal and external resources.  She’s, of course, left the company not long ago.

We may never find out the real reasons for their decision although Alnylam would like us to believe that it was a specificity issue since ALN-HBV02 will now be ESCplus-based. Please don't fall into that trap.

My expectation is that ALN-GO1 for primary hyperoxaluria (PH) will suffer the same fate as the initial biomarker data from clinical studies have indicated that likely prohibitively high doses would be necessary to achieve robust oxalate lowering (a modest ~2x increase in glycolate biomarker at a single dose of 6mg/kg).

Once again, a much smaller competitor, Dicerna, has been running circles around RNAi juggernaut Alnylam.  Importantly, it has conducted detailed work on the biochemical pathway of oxalate metabolism and closely studied the natural history of the disease.  The reward was the discovery that the lactate dehydrogenase A (LDHA) is in all likelihood a much better target.

In hindsight it is quite clear that both HBV and PH were only chosen by Alnylam to scare investors away from their competition to cement RNAi dominance.  Not only that, it then filed a frivolous lawsuit against Dicerna alleging trade secret violations.

Will RNAi platform companies have to broaden their tech base?

Given the need to immerse oneself into individual diseases, and also as RNAi is about to open the commercialization chapter, frequently developing drugs for entirely new disease categories served by medicines, a new question arises for the industry: do I remain a platform company or do I have to open my technology base to best serve patient communities and shareholders?

While I do like to criticize Alnylam for shamelessly behaving like the industry's big bully, TTR amyloidosis is one of the diseases they deeply care about.  With 10-20k TTR amyloidosis patients in developed markets, a number that should grow due to increased disease awareness, better diagnosis tools and access, and hopefully prolonged lives, this could well develop into a $5B+ annual market over the next decade.

As the company behind what promises to be the first dominant drug for this disease and a next generation product candidate (ALN-TTRsc02) that should remove any doubt who owns TTR gene knockdown following on its heels, Alnylam would be irresponsible not to try and control the whole patient experience, including complementary non-RNAi treatment options.  In other words, Alnylam would cease to be a pure-play RNAi Therapeutics company while continuing to rely on RNAi for conquering new markets.

This evolution of corporate strategy, of course, is not new to biotechnology and has played out at companies like Vertex Pharmaceuticals (small molecules à cystic fibrosis focus), Biogen (recombinant proteins à multiple sclerosis/CNS focus), and indeed in the Oligonucleotide Therapeutics space before.

Sarepta, once singularly based on morpholino antisense technology, for example has been on a Duchenne muscular dystrophy (DMD) business development spree as their first antisense drug (EXONDYS51) was getting approved.  Sarepta sports a solid >$3B market capitalization illustrating that the financial markets reward such commitment to commercialization and category dominance.

On the other end of the spectrum is Ionis Pharmaceuticals.  

This company is happy to cease control over its groundbreaking compounds and disease insight quite early in their drugs' development paths. Consequently, it finds itself in situations where it either only gets a pittance from breathtaking medical and commercial successes such as SPINRAZA (for spinal muscular atrophy) or it gets caught with their pants down when a partner returns a compound late in the game as has just happened with IONS-TTR/Inotersen and GSK.

The market cap of Ionis, a company that shames $100B+ Big Pharma in terms of its pipeline and which will have close to a dozen compounds on the market and/or in pivotal clinical trials in a year or two, is comparatively paltry: $8B.

And the reason for this?  They are considering themselves a scientific company with a mindset of ‘we are better than organizations with corrupt sales departments’ that is difficult to find even in academia nowadays.  OK, management keeps drawing nice salaries and humongous stock/options rewards, so its really only shareholders that suffer.  

So as much as it hurts me as an RNAi scientists, when it comes to maximizing shareholder returns, the platform serves the purpose of capturing dominant footholds in new disease categories of high unmet needs, but this position has to be fortified by deep relationships with the patient community and an equally deep understanding of disease pathology.  And if necessary, develop and/or license complementary non-RNAi compounds.  

A word on the Arcturus-Janssen HBV deal

In addition to the Alnylam-Vir deal, another HBV RNAi-related deal was announced this week, namely between newly public Arcturus and Big Pharma player Janssen, a unit of Johnson & Johnson.

According to the agreement, Arcturus will work together with Janssen to develop an RNAi drug for HBV utilizing Arcturus’ intravenously administered RNAi triggers formulated in LNPs.   Arcturus uses fancy names for these components, but this is what's behind 'LUNAR' and 'UNA Oligomer Chemistry'. 

Given the availability of potent, but subcutaneous GalNAc-conjugation options in the industry, this interest by Janssen may come as a surprise to some and will serve Arbutus bulls as ammunition in claiming that Arbutus’ HBV RNAi LNP formulation has a future.  A Big Pharma deal after all is a knighthood in the industry.  

Still, I highly doubt it.

It is more likely that similar to Merck which had used LNPs internally as a disease interrogation and target validation tool, but not for commercial development before- even before GalNAc had come to prominence- J&J may view LUNAR-RNAi as a relatively speedy, but inexpensive way to test RNAi for its potential as a backbone therapy in HBV.  If it likes what it sees, watch out for the real deal with Dicerna or Arrowhead.