Voyager Therapeutics Sets Out to Fulfill Promise of AAV-directed RNAi Therapeutics (and More)

Finally!  Long overdue (because so obvious and compelling), with the founding of Voyager Therapeutics, the foundations have now been laid for a strong AAV (adeno-associated virus) platform gene therapy company, including DNA-directed RNAi Therapeutics.   Taking advantage of new AAV shuffling approaches to identify novel serotypes (Gao and Kay labs) to more efficiently and specifically target cell types of interest and the world-class expertise in RNAi trigger design of  two of its scientific co-founders (Kay and Zamore labs), the new company will make use of the best available science to realize the potential of AAV and ddRNAi technology for the many diseases of high unmet medical need in the CNS (e.g. Huntington's disease).

With $45M in start-up funding from Third Rock Ventures (the VC that has started the comparable lentiviral-based gene therapy company which recently went public, bluebird bio), they will deepen that expertise through in-house research and thereby sail by Benitec which sadly has refused to face the fact that in order to be a platform company and stay relevant you need to have such efforts.  If not at a time like this when interest is high, then when??  The latest publication by Benitec and Pfizer (Denise et al. 2014) was ironically the best illustration of that omission by showing that the first-generation ddRNAi expression technology of Benitec generates a plethora of small RNAs which obviously is less than ideal.  By contrast, work in the Kay lab in particular (e.g. Gu et al. 2012) has shown how to generate much cleaner expression cassettes.

Voyager strutting its RNAi expertise and related therapeutic development plans is further confirmation of the dramatic decrease in the value of Benitec's once-prominent IP position in ddRNAi (Graham patent).  With an expiration of ~2018-2020 and Baulcombe the real gate-keeper (although the clock on that one is also rapidly running down), I don’t see why there should be a need to take a license except for maybe the likes of Calimmune which may have something close to commercialization by then should things proceed without a hitch.

The start of a company like Voyager is always very exciting and I trust that the scientific founders have the expertise and wisdom to guide it along the way.  It is also a good time to acknowledge the likes of Dirk Grimm (Heidelberg), Shuo Gu (NCI), and most recently Leszek Lisowski (Salk) which I had the privilege of working next to in the Kay lab when they were critically contributing to the technology underlying Voyager.  The pharmaceutical industry and indeed the investor community is wasting a lot of potential by not tapping into the skills of such driven scientists just because they may not labor in one of the biotech hotbeds.

Biotech IPOs Show Wall Street Likes New Toys

The biotech sector is white hot these days, and as a result, the IPO window is wide open.  This is illustrated by the fact that preclinical companies like gene therapy outfit Bluebird Bio and Agios Pharmaceuticals have either just slipped through the window or are about to.   This is also illustrated by the fact that Duchenne Muscular Dystrophy (DMD) exon skipping company Prosensa is aiming at a valuation of $400M at its IPO despite the uncertainties around the approvability of its only product candidate that matters (endpoints and safety issues) and for which it has given away much of the financial potential to a Big Pharma (GSK). And the ticker: RNA.

As it relates to gene therapy and RNA Therapeutics companies IPOeing- in addition to Prosensa, small molecule RNA processing modulation Co. PTC Therapeutics and aptamer company Regado- a gap between the valuations of already public companies and those emerging from the obscurity of the private sector is becoming apparent.  Without meaning to talk down on Bluebird Bio or gene therapy, I am scratching my head as to why this early-stage company sports a $150-200M market cap (it priced above its guided range and popped 50% on the open) whereas a much more proven and clinically advanced lentivirus-based gene therapy company, Oxford Biomedica, is not valued at even a quarter of that.  

Given that Oxford Biomedica is developing drugs for medically important indications, especially for those affecting the eye and can be proud of a remarkable preclinical literature record, just as Bluebird Bio can, the difference cannot be product versus platform focus.  Or take for comparison preclinical microRNA Therapeutics company Regulus Therapeutics (2012 IPO) with a market cap of $350M and clinically slightly more advanced Arrowhead Research with a market cap of around $60M (disclosure: I own Arrowhead).   

Instead, I believe it shows the benefit of being able to stay out of the spotlight when valuations are severely depressed as they were in the wake of the housing crisis when research and having a pipeline were actually assumed to be liabilities, not assets.  Companies like Oxford Biomedica and Arrowhead Research may thus be viewed as damaged goods.  Only supposed best-in-class companies in the RNA Therapeutics space with a halo like Alnylam and ISIS Pharmaceuticals were able to decisively spring back from low valuations as sentiments improved.

By contrast, biotech networks such as the one around Third Rock have understood to wrap up biotech companies as exciting new toys for Wall Street to buy.   Orphan drugs anybody?  Of interest, Alnylam’s CEO John Maraganore has had an involvement with both Agios and Bluebird.  I give these individuals full credit for promoting innovation.   By the same token, the depressed valuations of some of the existing innovators are another example of the inefficiency of the public markets.