Alnylam Raises Another Half a Billion as It Rolls Out Cardiometabolic Program

There has been some confusion today why Alnylam would raise another half a billion dollars when it already has one billion in liquid assets.  The answer has probably to do with their newly formed cardiometabolic franchise (aka STAr), the first candidate from which, ALN-PCS, has just entered the clinic.

With a delivery platform that enables monthly to quarterly dosing for gene targets in the liver, RNAi can no longer be thought of as a mere second-line alternative in diseases with existing therapies or where there is direct competition with much-touted monoclonal antibodies for extracellular proteins.

For example, earlier this year, Alnylam reported early, but highly suggestive data for its subcutaneous hemophilia candidate ALN-AT3 which supported that it will work as beautiful as the genetic model behind it, and due to its monthly dosing regimen has to be considered a potential first-line therapy in a market where transitioning to weekly intravenous infusions with complex recombinant proteins is already considered progress.

Based on the non-human primate data, ALN-CC5 (going up against Alexion’s fabled Soliris) and ALN-PCS are no different.   

First cardiometabolic pearl: ALN-PCS

While all the focus in the PCSK9 space is currently on the monoclonal antibodies which are marching towards approval, ALN-PCS looks like it could shake up the market.  While up to 50-60% LDLc reductions can be expected with both the monoclonals and ALN-PCSsc, once-quarterly regimens appear feasible with ALN-PCS.  By contrast, the most advanced monoclonal antibody, alirocumab by Regeneron/Sanofi, struggles with achieving stable pharmacodynamics with just monthly dosing.  

Amgen’s evolocumab may be doing slightly better for the most part with monthly dosing, but there is still the challenge of patients with high starting levels of PCSK9- and it is still monthly and recombinant protein versus potentially quarterly and synthetic molecule.

Given that the target patient population for the PCSK9 class is expected to be in the tens of millions, clinical development for hard end points such as cardiovascular events would obviously cost a lot of money.

In the case of ALN-PCS, it is The Medicines Company that has to shoulder the costs for now.  This is because it exclusively licensed ALN-PCS from Alnylam around 2 years ago for just $25M and modest biobucks.  This deal was a great oddity because part of the reason why The Medicines Company had to pay so little is that the expectations was that ALN-PCS, at the time still the intravenously administered liposomal version ALN-PCS02, would only be used in select patient populations, such as those hospitalized with a need for rapid lipid lowering.

This profile would have obviously matched a hospital specialty company like MDCO better than a drug with the profile of ALN-PCSsc. 

In terms of value, however, I believe that ALN-PCS already is worth more than MDCO’s market cap of ~1.6B which is a function of IP issues around lead drug Angiomax and some of the more recent hospital-focused niche products it has been frantically acquiring in an effort to fill the hole should Angiomax go generic this year.  

Therefore, should the phase I results in mid-2015 support a first-in-class profile for ALN-PCS, something will have to give: either The Medicines Company splits up into a PCSK9 company and a hospital-focused entity, or (more likely) it will dispose of ALN-PCS- how about to Alnylam which would love to have it back and become the heart of the new cardiometabolic franchise?

Note: I consider MDCO the best risk:reward opportunity in biotech 2015. 

NASH, diabetes, dyslipidemia

In addition to fighting bad cholesterol by knocking down PCSK9, some of the newly raised money will be directed at other large dyslipidemic opportunities, (type II) diabetes, and the increasingly hot non-alcoholic steatohepatitis (NASH) indication.  Given its central role in system-wide metabolism, the liver is rich in targets and being able to go after every protein-coding gene alone and in combination greatly increases the odds that Alnylam (or ISIS Pharmaceuticals) come up with category-busting drugs.

I believe Alnylam was right in doing the capital raise and it could well accelerate development of the new franchise and, partly depending on the outcome of the phase I study with ALN-PCS, result in another Genzyme-type billion dollar deal next year around JP Morgan.

Read the Xconomy timely interview with Alnylam's CEO John Maraganore which further details some of the thinking here. 

An RNAi Therapeutic Could Be Last Man Standing in PCSK9

PCSK9 has arguably become biotech’s hottest drug target as it promises to unlock much of the remaining unmet need in lowering ‘bad’ LDL cholesterol.  While monoclonal antibodies have been the predominant and most advanced modality to address PCSK9 (e.g  alirocumab Regeneron/Sanofi-Aventis and AMG145 by Amgen), RNAi Therapeutics have made tremendous, yet widely underappreciated progress in this area with predicted potencies equivalent to if not superior to monoclonal antibodies.

Alnylam’s ALN-PCS leads in this effort (preclinical 67% LDLc lowering without statins) and should have entered clinical development by the beginning of 2015.  It is partnered with The Medicines Company.

The news today that the FDA has become concerned about neurocognitive adverse events in the ‘PCSK9 class’ could mean that RNAi Therapeutics, despite their development delays, will carve out a nice junk of the PCSK9 market which is widely estimated to be a multi-billion dollar market in terms of annual sales.

But if it’s a ‘PCSK9 class’ issue, so how could this be positive for RNAi Therapeutics?  Wouldn’t this concern also apply to ALN-PCS?

Not necessarily.  Since by far the most clinical experience with PCSK9 has been obtained with monoclonal antibodies, the FDA may be inappropriately lumping all PCSK9 inhibitor agents in one bucket confusing a short-coming of a therapeutic target with a short-coming of monoclonal antibodies.

The reason why I have a good feeling that this turn of events could be very positive for RNAi Therapeutics is that RNAi is a genetic tool that reduces PCSK9 expression before any protein is made.  The approach therefore resembles populations that under-express PCSK9 for genetic reasons and which enjoy improved cardiovascular health compared to the general population without any apparent negative consequences of their PCSK9 deficiencies.  It is for this very observation that PCSK9 has become such a sought-after target and RNAi, a gene knockdown approach, best mimics human genetics.

Monoclonal antibodies don’t.  One mechanism by which antibody-specific toxicity might arise from is the fact that they form complexes with their target.  Such complexes could elicit adverse immune reactions in organs where they form and accumulate.  While I am not familiar with the binding sites of the particular Regeneron and Amgen antibodies to PCSK9, it might also be possible that the immune complexes form directly on neuronal cells expressing LDL-receptor-like proteins (note: PCSK9 binds the LDL-receptor).

Beyond PCSK9, today’s events emphasize yet another hitherto under-appreciated value proposition of RNAi Therapeutics, namely providing differentiation value when going head-to-head with the small molecules and monoclonal drug establishments.

Alnylam and The Medicines Company to Position RNAi PCSK9 Drug Candidate as Fast Follower

Yesterday, Alnylam made the somewhat surprising announcement that it partnered with the ~$1.6B market cap The Medicines Company to develop and commercialize its RNAi Therapeutic program targeting PCSK9 for hypercholesterolemia.   This program includes ALN-PCS02 which had completed a phase I study last year and contemplates subcutaneous formulations, too.  

This means that as a number of PCSK9 monoclonal antibodies are moving forward in clinical development at lightning speed, including phase III trials involving more than 20k patients, the ambition here is not to have a Big Pharma try and catch up (maybe they did try, but nobody was willing to partner), but to carefully study the experiences of the monoclonals and exploit the biological differentiation that an RNAi approach offers over antibody.  With The Medicines Company on board, some of that potential at least is seen in the hospital setting.   

Mechanism of Action of RNAi vs Antibody 

There are various points of differentiation which might translate into a clinical benefit for RNAi. Expect the companies to look hard for such evidence and, if found, beat the drum about it. These differences include: 1) reduction of both intra- and extracellular PCSK9 thus replicating human genetics from which PCSK9 emerged in the first place; antibodies merely bind existing extracellular PCSK9; 2) because antibodies form complexes with their targets and do not act catalytically, the percent target inhibition efficiency of antibodies depends on target abundance; therefore, in patients that have many more PCSK9 molecules than the number of antibodies you can fit in a subQ syringe, PCSK9 antibodies will not work well; RNAi, however, works with similar percent knockdown efficiency more or less regardless of target gene expression levels.

Efficacy

In general, the LDL cholesterol reductions with monoclonal antibodies have been between 40-70% in multi-dosing regimens.  In Alnylam’s single-dose phase I trial, the liposomal ALN-PCS02 achieved a ~30% reduction (area under the curve). 

Frankly, given the number of clinical trials involving PCSK9 monoclonals, I have given up tracking the results of each and every study.  Having said that, in reviewing the phase II trials of the candidate that may be viewed as the most advanced/exciting one, AMG145 by Amgen, it seems that the higher end of LDLc reduction was only achieved when given on top of statins.  Althought to me this seems a bit counterintuitive since statins are thought to act mechanistically essentially the same as PCSK9 inhibitors, namely via increasing LDL-receptors on hepatocytes, that's the way it looks right now, and the ALN-PCS02 trial may have been disadvantaged as it was mono-therapy.

Finally, with continued improvements in the potency of RNAi Therapeutics technologies, it should be possible to achieve similar LDLc reductions with RNAi as with PCSK9 antibodies. 

  

Acceptance

I like the fact that PCSK9 has become a small battleground between RNAi and monoclonal antibodies as this may be the best way for RNAi Therapeutics to work on its wider acceptance by the medical and investor community.  Notably, the often glorified monoclonals frequently suffer from injection reactions (some notable serious ones were observed in Regeneron’s PCSK9 trials), other immune-related issues and manufacturing challenges to name a few issues.  RNAi Therapeutics, of course, are facing some of the same challenges, but it irks me that when it comes to this technology, they suddenly are supposed to be show-stoppers.

Financials

The financials (including a $25M upfront, up to $180M in sales and commercialization milestones and double-digit royalties) were not all that exciting for Alnylam and reflect the fact that only one single-dose phase I trial had been conducted.  Also, as Alnylam cannot claim a blocking IP any more and has licensed hepatic targeting rights to other companies, including Roche/Arrowhead, the value of ALN-PCS as the only RNAi candidate for PCSK9 has been lost.

Still, $25M is serious money for a company the size of The Medicines Company and you do not turn this over just to help out an old friend.  

Alnylam’s Imminent PCSK9 Partnership Deal

A lot of the business development and corporate communications strategy that the 17 VPs at Alnylam come up with these days is, you guessed correctly, directed at building investor confidence so that it may survive the Trade Secret case with Tekmira.  So also the planted interview by John Maraganore a few weeks ago in which he suggested that a PCSK9 deal (ALN-PCS) may be imminent.

Needless to say, without having resolved the important questions about ownership and control over SNALP delivery, chances for a real deal are pretty slim.  Instead, expect a VSP-type deal with minimal upfront, and where the press release will state that development efforts will be focused on the subcutaneous GalNAc conjugates at the expense of (Tekmira’s) SNALP delivery.  

It would, of course, be extremely convenient to announce such a deal just in time for trial, as Alnylam will be able to look the jurors in the eye and state that TTR, PCS, and hemophilia are all now employing a non-Tekmira technology.   A minimal upfront would have the further advantage of depriving cash-strapped Tekmira financial ammunition for the litigation.

Of course, no IND has been filed for any of these yet and, most importantly, clinical validation has not been established leaving a big question mark behind the value (and safety) of GalNAc-conjugates.  I’m wondering what type of messaging the 4-person PR team will come up with to explain, after things have calmed down, that they are still favoring the SNALP-delivered versions.

Note: To put (the estimated) 17 VPs and 4 PR employees in context, Alnylam had 115 employees after the latest lay-offs earlier this year.

New Clinical Results Put ALN-PCS Firmly in Business in PCSK9 Race

Alnylam reported on Friday updated results from the phase I single-dose, dose-escalation trial of its hypercholesterolemia candidate ALN-PCS02.  Importantly, the data demonstrate that ALN-PCS can produce clinically meaningful 30-40% reductions in LDLc (the ‘bad’ cholesterol) for much of the 28 study days of the study after only a single infusion of the drug.  This bodes well that ALN-PCS may be useful for the millions of patients that cannot achieve their LDL cholesterol goals despite the availability of statins.

After presenting solid PCSK9 knockdown results in January from subjects receiving up to 0.25mg/kg of the PCSK9 siRNAs which are critically enabled by Tekmira's SNALP delivery technology, the latest data include the results from subjects receiving 0.4mg/kg PCSK9 siRNAs after the decision had been made to increase the top dose based on the favorable safety-efficacy profile thus far.  This was important because despite the solid plasma PCSK9 reductions seen up to 0.25mg/kg (roughly 50% mean reductions throughout the 28 days), both the peak and average mean LDLc reductions until then had been less than 30% and 20%, respectively.  Probably not enough to effectively compete in the hot PCSK9 field.  

Based on the latest data, which included impressive >80% target plasma PCSK9 reductions, it is reasonable that ALN-PCS will be able to achieve average (=sustained) ~45-50% LDLc reductions in a once-every-4-week dosing regime.  This would put it just slightly behind Regeneron’s PCSK9-targeting monoclonal antibody REGN727 in terms of LDLc lowering.  It may be more difficult for ALN-PCS to achieve the LDLc lowering efficacy of Amgen’s PCSK9-targeting antibody AMG145 which has been hailed at the recent ACCconference to produce LDLc lowering of ‘up to’ ~60-80% at apparently pristine safety and tolerability.  I should add, however, that the warts-and-all data on AMG 145 have yet to be made publicly available.

In light of the intense competition in the PCSK9 space and a possible potency disadvantage for this surrogate marker, it will be interesting whether, firstly, the pharmaceutical industry (note, a larger partner will have to be found to financially shoulder the unavoidable outcomes trial), and eventually the market-place will adopt this new class primarily for their absolute LDLc reducing ability or in order for patients to achieve their lipid goals.  Some LDLc proponents, of course, stress that the lower the LDLc, the better.  On the other hand, whether a drug can lower LDLc by 50% or 70% won’t matter for many patients when it comes to simply achieving standard LDLc goals of 100mg/dL or even 70mg/dL.  In that environment, the focus in making the choice between competing drugs would shift to factors beyond mere LDLc lowering potential, particularly safety.

While ALN-PCS is mainly suffering from the fact that it is given following pre-treatment with corticosteroids, something that also had important impacts on the PCSK9 and LDLc efficacy data, the once much-touted safety profile of the PCSK9 antibodies have taken a significant hit with the publication of phase II data from REGN727 (McKenney et al. 2012).  In addition to one serious adverse event, a case of potentially life-threatening inflammation of blood vessels (leukocytoclastic vasculitis) that, however, readily resolved after giving corticosteroids, there was an apparently dose-dependent, adverse event-related increase in the rate of discontinuations, with ~15-20% discontinuing treatment in the biweekly dose cohorts in study 11565.  Next to the case of vessel inflammation, the AE-related discontinuations involved cases of neutropenia, fatigue, injection site rashes, chest pain, and headache/nausea. 

Amgen has yet to publicize more detailed data for AMG145.

Next to multi-dosing and the safety and efficacy impacts of omitting corticosteroids in future studies, another important question for ALN-PCS that remains to be answered in the upcoming trials will be testing the candidate in patients on statins.  REGN727 encountered problems here as patients concomitantly taking statins experienced an LDLc rebound effect after around 2 weeks.  Whether this is a class effect of agents merely blocking extracellular PCSK9 (such as antibodies), instead of inhibiting the synthesis of both intra- and extracellular PCSK9 such as ALN-PCS is an interesting question.  

This mechanistic difference could also be the big wildcard when it comes to the ultimate arbiter of clinical utility, the outcome trials: despite the clear evidence that LDLc levels are inversely related with cardiovascular events, with all the complicated feedback loops of lipid biology and related diseases, mechanistic differences could easily erase 20% differences in LDLc lowering.  An indication that these theoretical considerations are translating into the clinic may be deduced from the observation that (in Alnylam's words) ‘importantly, ALN-PCS demonstrated consistent clinical activity toward both PCSK9 and LDL-C independent of baseline levels of PCSK9, highlighting the unique mechanism of action for a PCSK9 synthesis inhibitor.’

For Alnylam, the near-term challenge will be thus to find a large partner, probably without a stake in PCSK9 yet, willing to take the risk with RNAi Therapeutics mainly for the differentiation it offers over the other PCSK9 approaches.  A stumble of the monoclonal antibody class could easily mean that ALN-PCS becomes the lead candidate in the PCSK9 market, estimated by many to be a multi-billion dollar one. 

Santaris Terminates PCSK9 Hypercholesterolemia Trial

Antisense company Santaris seems hardly able to catch its breath these days. After being sued by ISIS Pharmaceuticals for patent infringement, reporting first clinical proof-of-concept for a MicroRNA Therapeutic, it has now been revealed that the company prematurely terminated a phase I trial of its PCSK9 phosphorothioate LNA RNase H antisense inhibitor SPC5001 for the treatment of hypercholesterolemia. This study had been initiated in May of this year with an estimated enrollment of 40 healthy and familial hypercholesterolemia subjects.

Reasons for the trial termination were not revealed. However, since this was a phase I safety trial, it is likely that the trial termination was due to some safety issue. Supporting this is that, coinciding with the PCSK9 trial termination, enrollment has been halted in another phase I hypercholesterolemia trial sponsored by Santaris, this time targeting ApoB (SPC4955).

Consequently, after the premature trial termination last year of BMS/ISIS’ phosphorothioate 2’ MOE RNase H PCSK9 antisense inhibitor (BMS-844421), Alnylam’s SNALP-delivered ALN-PCS has suddenly taken the lead in the race to develop a PCSK9-targeting RNA Therapeutic, pitting it against the monoclonal antibodies by the likes of Regeneron and Amgen.

Without explanations for the trial terminations, it is difficult to pin down the exact cause(s) of the presumed toxicities. What the compounds by Santaris and BMS/ISIS Pharmaceuticals obviously share is that they both use phosphorothioate chemistries and work via an RNaseH mechanism. Phosphorothioates are widely used in antisense development because they bind to proteins in the plasma and various tissues, thereby allowing one to achieve tissue concentrations high enough such that mass action will allow for cell penetration and target gene knockdown. In my opinion, phosphorothioate oligonucleotides are promising for a number of local applications. The problem with systemic applications, however, is that the high concentrations reached in tissues such as liver, spleen, and kidney, ultimately limit their therapeutic window. Some industry experts have referred to this issue as the ‘hazardous waste’ problem of systemic phosphorothioate oligonucleotides.

ISIS supporters will point out that Santaris’ specific LNA chemistry is the most likely culprit, whereas ISIS’ chemistries are relatively safe as supported by ISIS’ comparative studies. Of course, these studies were published to make Santaris look bad, just as the recent lawsuit was aimed at blunting Santaris’ competitive threat. Conspiracy theorists may even suspect that the sudden turmoil around Santaris is no coincidence and was orchestrated to inflict maximum damage at a time that Santaris seemed to be on a roll with a number of trial initiations, positive HCV data, and depriving RNAi Therapeutics of a deal with Pfizer (Pfizer apparently being attracted to ‘naked’ oligonucleotide approaches over RNAi nanoparticle ones). However, if Santaris intended to go public to satisfy its increasing cash needs (maybe less so with the trial terminations), it can probably scratch that now.

RNA Therapeutics is intensely competitive as they compete for pretty much the same investment dollars. Investors, including Big Pharma, are easily influenced by public opinions and fashion trends. 4 years ago it was all about the fear of being left behind in RNAi Therapeutics, with little attention being paid to true enablement and expertise in a noisy field. This made antisense look like the ugly cousin. In the last 2 years, however, antisense has regained favor as the RNAi delivery ‘problem’ became widely publicized which made antisense look deceptively simple. Santaris especially made a living of that by advertising, e.g. at conferences and press releases, the delivery problem of RNAi Therapeutics and getting a few laughs by stating their motto of 'staying naked’ and ‘staying short’.

Needless to say, my favored technology is RNAi Therapeutics: ‘natural’ and ‘potent’ is my motto. The hypercholesterolemia arena will be a particularly good battleground for antisense and RNAi Therapeutics to test their metals: same targets, easy biomarkers, chronic applications. The next chapter will be top-line data from Alnylam’s ALN-PCS phase I trial which are expected by year-end.