The time for genome editing is now

Back from recent CRISPR conferences in Ireland and Denmark, I wanted to share my current thinking about the present and foreseeable future of clinical genome editing.

CRISPR is a clinically mature platform

First of all, genome editing, and in particular CRISPR Therapeutics have arrived big time.  Ignore for a moment the 90%+ declines in the share prices of Intellia, Verve, and Metagenomi, that all, with the exception of perhaps Beam Therapeutics, suggest that the industry will not survive.  Focus instead on the transformational results last week by Verve Therapeutics which will shape the management of chronic metabolic and cardiovascular disease for decades to come, Beam Therapeutics last month announcing that it  for the first time fixed a genetic disease (AATD) by reversing a point mutation, or the three ongoing phase 3 programs by Intellia Therapeutics which promise patients live unintruded by their disease.

So you say that this is only half the truth and many of them will develop cancer?  With hundreds of subjects having been given CRISPR therapeutics, we still have yet to hear about such cases, including for the hematopoietic stem cell applications, probably the most stringent test in that regard given the history of retroviral gene therapy.  This is supported by ample detailed genomic analyses demonstrating that many CRISPR modalities, in particular prime editing, often do not have any detectable off-targeting (!) and therefore are safer than going out in the sun or eating grilled meat.  And don’t get me started with analysts and investors pretending that small molecule drugs, 'dirty drugs' by design, are much safer in that regard when many of them like methotrexate and hydroxyurea are known to cause cancer which barely gets a mention or is routinely accepted as part of the risk-benefit of a drug.  Similarly, the currently more widely embraced antisense and RNAi technologies exhibit considerably more off-targeting, which in theory could result in cancer development with chronic use, than the average CRISPR therapeutic candidate today. 

Prime editing is the ultimate CRISPR manifestation

Prime editing is the foreseeable endgame for genome editing involving edits up to 50 nucleotides.  This is because in addition to being able to knock out genes like (Cas9) nuclease or base editing, it allows the developer to change nucleotides at will and with incredible specificity, and for gain-of-function.  It has therefore surprised me to see that prime editing is still such a niche part in these conferences and barely used in industry and even academia where IP is less of an issue.  This can likely be explained with it requiring a good deal of mental gymnastics when devising a prime editing strategy and subsequent tinkering to optimize efficacy.  Prime editing will likely also be part of strategies for achieving even larger edits, including whole gene replacements that are often desirable.

In some ways this is reminiscent of zinc fingers which make for poor screening and quick molecular biology tools and were quickly forgotten when CRISPR came along with the promise of simple sgRNA design.  However, a panel at the Copenhagen CRISPR meeting by genome editing veterans made it clear that when optimized, zinc fingers can be every bit as powerful as CRISPR and currently have a leg up where delivery is going to be viral for some time to come.  

This is particularly true for the CNS, the fourth major tissue/organ target for genome editing applications after the liver, hematopoietic stem cell, and immune cells.  Not only is it impossible to fit in prime and base editors in single AAV vectors, expressing a CRISPR effector nuclease of bacterial origin for years may be tricky (but not unsolvable) in terms of immunogenicity.  There is also some unease about having nucleases loiter around in cells for years after their job has been done.  Self-targeting/inactivation strategies may here be called for.  Zinc fingers by being small and mimicking human proteins by contrast are ready for clinical use, a fact, as the deal flow by Sangamo Therapeutics illustrates, is increasingly being recognized by the wider industry.

Genome editing versus non-permanent modalities

Another popular argument against CRISPR Therapeutics questions why one should take a ‘risk’ with permanently altering the genome when you have oligonucleotide therapeutics options that need to be administered as infrequently as every quarter, half annually, or even annually.  

While there is some application overlap between genome editing and oligonucleotide therapeutics, especially when it comes to knocking down genes, a closer look shows that the overlap is limited.  Where there is clear genetic evidence that a gene can be disabled for life without safety risks, then genome editing is the endgame, or at least capture a good portion of the market, and transient modalities may serve to de-risk the targets first.  

When it comes to bringing pathways back into finely tuned balance and/or the disease is not chronic and likely requires only temporary treatment (e.g. some cases of hypertension), transient options are preferable.  Still in other cases such as prion or Huntington’s disease where it is not clear whether it is the overall level or distribution of gene knockdown that is more important for efficacy, the preferred modality has yet to emerge from clinical studies. 

Part of the Wall Street fashion show

Wall Street is a fashion show when it comes to biotech platforms.  A little less than 10 years ago, it predicted that CRISPR would kill off the RNAi Therapeutics industry. Today, Alnylam sports a $30B market cap, about 4x that of the entire CRISPR industry combined (much of it in cash).  Of course, investing in technologies ahead of their time is fatal. The electric vehicle industry is just one example.  As I have laid out above, genome editing, however, is now and here to stay.  Having the potential to save the healthcare system money (e.g. $2M for a one-and-done HAE/ATTR treatment as opposed to $500k annually) or to lead to drastically improved outcomes (as can be predicted from chronic LDLc lowering) got to be embraced by patients, their caregivers, docs, regulators, and insurers alike.  

It's been a rough couple of years investing in development-stage, cutting-edge biotechs and current politics does not seem helpful, but if this is when it is darkest, then generational wealth awaits the survivors with the guts to hold on during a volatile comeback.  One of my two conviction bets that I look up to in this regard is therefore CRISPR therapeutic biotech Verve Therapeutics.  Uniqure, which works in the similarly unloved gene therapy arena and has a promising DNA-directed RNAi candidate for Huntington’s disease, is the other in case you were wondering.  

RNAi Also Conquers the Central Nervous System

In the span of a day, RNAi Therapeutics have gone from a mechanism widely viewed as being constrained to the liver only, to a major therapeutic modality for many targets and indications in a variety of tissues.  Due to the demonstrations in the liver, lung (yesterday), and today the central nervous system to potently and specifically knock down genes with infrequent dosing, RNAi will play a prominent role in today’s precision medicine-oriented drug development.

Employing C16 lipid-conjugated, chemically stabilized RNAi triggers, Alnylam and their partner in CNS drug development Regeneron achieved 84-90% maximal target gene knockdown with knockdown persisting at >70% for at least 3 months after a single dose.

Since chemical stability has been key to the successes in the lung, CNS, and also liver, it seems very likely that similar breakthroughs will be achievable for muscle, kidney, adipose tissues, and (in the words of Alnylam's President) 'even tumors' that Alnylam and Arrowhead are working on.

The initial target in the phase I study of ALN-APP was amyloid beta precursor protein (APP). Unlike the armada of antibodies that have targeted every known aggregation form of abeta for the treatment of Alzheimer’s, ALN-APP reduces them all and before they are even made thereby offering a unique angle to this important target.  An even more exciting near-term application of ALN-APP in my opinion is for cerebral amyloid angiopathy (CAA) where abeta accumulation near blood vessels can lead to intracerebral hemorrhage.  Studies with antibodies in Alzheimer’s have actually led to fatal damage to those very intracerebral blood vessels by causing local inflammation, and thereby make them a bad choice for CAA.

Beyond abeta and tau for Alzheimer’s, the CNS in particular abounds with otherwise difficult-to-drug important targets for diseases like Parkinson’s, Huntington’s, ALS, spinocerebellar ataxias for which RNAi is ideally suited.

The prolonged and robust knockdown observed is significantly better than what has been observed for previous RNaseH antisense candidates such as against SOD1 and tau (~50% target gene lowerings).  Safety also appears to be superior to the broadly phosphorothioated antisense molecules with no changes in neuronal markers of damage and inflammation seen with ALN-APP compared to placebo.

The US FDA though slapped a clinical hold on the multi-dose part of the trial based on findings in standard preclinical animal tox studies at doses well above what will be needed in the clinic.  The single dose exploration study, however, has been allowed to continue, and Canada has already allowed the multi-dose part to go ahead.  It therefore seems highly unlikely that the findings could derail ALN-APP or even this technology approach at this point.

With the recent news, the pharmaceutical landscape has changed and Big Pharmaceutical companies will have to think hard whether not having a stake in RNAi as a platform is viable.  The achievement is also one of delivery and stabilization chemistry which can be more broadly applied to other oligonucleotide therapeutics modalities in the CNS.

ProQR and Partner Eli Lilly Demonstrate Oligonucleotide-induced RNA Editing in the CNS: A Major De-risking Event for the Industry

With every new oligonucleotide therapeutics modality that feeds into an endogenous cellular mechanism comes uncertainty as to whether the mechanism is sufficiently robust to be of therapeutic utility.  

This is especially true for RNA Editing as in its early days targeted AàI editing was only shown with the concomitant DNA-directed overexpression of ADAR along with an targeting RNA or the introduction of recombinant ADAR-antisense conjugates of little direct therapeutic use.  Similarly, simply introducing into a cell a chemically synthesized antisense oligonucleotide hybridizing to the area surrounding the target adenosine in an mRNA will only give you minute editing efficiencies in cell culture without further structural and chemical optimization.

The liver and CNS, due to their gene target richness and the demonstrated clinical feasibility of delivering oligonucleotides to these organs, are of particular importance to the RNA Editing industry.  The demonstration byscientists from Wave Life Sciences of oligonucleotide-directed RNA Editing in non-human primates was therefore an enormous de-risking event in that it showed that RNA Editing is sufficiently robust in living primate livers.

Of similar importance was the revelation by ProQR and their partners from Eli Lilly last week that this also holds true for the primate nervous system following the intrathecal administration of an editing oligonucleotide.  10-30% editing were seen in the brain depending on the anatomical location investigated.  In both the mice (intracerebroventricular delivery) and cynomolgous monkeys, editing was highest in the cortex.  Even higher editing levels, up to 50%, were observed in the spinal cord of non-human primates.

The spinal cord (motor neurons) also happens to be the location of the most successful oligonucleotide therapeutic currently on the market: SPINRAZA (nusinersen) for spinal muscular atrophy.  Since RNA Editing is quite new and many do not fully appreciate what 10-50% editing efficiencies mean, SPINRAZA can serve as a good example for how impactful such target engagements can be particular for gain-of-function approaches.

SPINRAZA is a splice modulator and works through gain-of-function by obscuring an intronic splice silencer element in the SMN2 pre-mRNA.  Typically, only 10-20% of SMN2 mRNA is ‘correctly’ spliced to yield a functional full-length protein.  With 12mg of SPINRAZA in infants (same dose used for the RNA editing studies in cynomolgous monkeys), this increases 2-3x.  This means that an approximately 10-40% successful target engagement can save babies from certain death and, if given early enough, may allow children with the type I SMA mutations to grow up almost normally.

In the case of the (undisclosed) target gene that Eli Lilly is looking at, these types of target engagements with RNA editing resulted in 5-25x increases in protein function.  Because of the above and because gain-of-function is a particular competitive strength of RNA editing, this application should be prioritized in target selection of industry pipelines.

Eli Lilly Comes Back for More ADAR Editing

Barely two weeks after GSK took an exclusive license to the ADAR Editing industry’s leading pipeline asset (alpha-1-antitrypsin) and other ADAR targets from Wave Life Sciences, Eli Lilly and ADAR pure-play ProQR announced a major expansion of their RNA Editing partnership from a year ago.

Here, I will lay out what the deal says about the position of RNA Editing within the pharmaceutical industry, the dynamics within the RNA Editing space before going into some specifics of the deal itself.

 

ADAR Editing to exploit exploding genetic insight into disease

The deals were driven by the desire of large pharmaceutical companies to exploit their investments into understanding the genetic basis of disease by matching them with complementary therapeutic modalities. Not only is ADAR Editing as a genetic technology itself an obvious consideration for this challenge, unlike most other modalities which work by inhibiting pathways, ADAR Editing is amenable to gain-of-function and gene upregulation.

Similarly, RNA and genome editing (‘CRISPR’) are unique in their ability to generate protective variants, that is variants thought to protect a person from developing a disease such as cardiovascular disease or Alzheimer’s.

Target modulation versus all-or-nothing forever

Genome editing may have captured our imagination and overshadowed ADAR Editing for most of its existence, but for many applications its mechanism is imperfect or for technical reasons not applicable (yet).

The delivery challenge for large nucleic acids as in genome editing is, however, bigger than for ~30nt oligonucleotides which have emerged as the preferred strategy to mediate ADAR Editing.  It is therefore unsurprising that currently the greatest value of genome editing is in combination with cell therapeutics such as in immune oncology or for hematopoietic stem cell-based strategies where delivery happens ex vivo. For in vivo delivery strategies, liver hepatocytes will be its main target tissue and it is here where most of the competition between ADAR and genome Editing will play out.  

But also where there is such direct competition, there are often good reasons to not pursue a permanent change in the patient's DNA.  For example, permanently burning liver fat in an uncontrolled manner by turning thyroxin hormone receptor-beta into constitutively active versions could be dangerous.  This is where a daily (small molecule) pill or a quarterly administered oligonucleotide therapeutic like RNA Editing would be preferable.

 

In Eli Lilly’s words: ‘“We have been impressed with the progress to date with our partners at ProQR and have conviction that RNA editing can be an important alternative to other more permanent therapies.”

 

For other targets, a biallelic modification may not be tolerated by the cell.  It is for example hotly debated whether huntingtin in Huntington’s Disease should be fully ablated or whether residual huntingtin activity is important for safety reasons.

Short oligo-mediated RNA Editing is the way

It is no coincidence that GSK and Eli Lilly have partnered with the leading ADAR Editing companies that employ short oligonucleotides to both recognize target RNA and recruit endogenous ADARs.  In the earlier days of RNA Editing, a longer editing oligonucleotide expressed from DNA along with ADAR co-expression was predominantly practiced.  However, this approach not only suffers from the challenge of having to deliver larger cargos to target cells, ADAR overexpression is associated with widespread, likely intolerably high off-targeting. 

Clearly, Roche should have known about these fundamental challenges in 2021 when it sealed its collaboration with DNA-directed ADAR player Shape Therapeutics.  Roche must feel the intended approaches it is intending the technology for justify such delivery and would expect the collaboration to focus on reducing the level of off-targeting.

Eli Lilly and ProQR partnership

In September this year, when I got finally convinced to look more into the potential of ADAR RNA Editing, I could not believe how well positioned and cheap ProQR was:

ProQR had stumbled across an oligo-mediated method to achieve targeted RNA Editing about 10 years ago.  At the time I was extremely critical of the company because they pursued a form of mRNA repair (for cystic fibrosis) that in my book as an RNA molecular biologist did not exist.

Predictably, that project failed and I can imagine that failure and resulting skepticism of the technology led the company to explore other methods of repairing mRNA.  They obviously stumbled across ADAR Editing when virtually nobody, except for a few DNA-directed project teams was paying attention.  This means that their IP may be close to having gatekeeper potential for oligo-directed ADAR Editing.  

Another thing that I liked about ProQR during my research was that, unlike its closest competitor, Wave Life Sciences, ProQR is now fully exclusively focusing its cash towards the platform instead of having its budget being overwhelmed by expensive clinical trials on less exciting drug development prospects.

As such I was confident that regardless of the neglect by the public markets, the pharmaceutical industry which has gotten used to the concept of Oligonucleotide Therapeutics would be attracted by the notion of piggybacking on existing oligonucleotide delivery and chemistry progress to open up unique new genetic drug target space with RNA Editing.

So after initially buying access to 5 liver and CNS-related targets for $20M in upfront cash and an equity investment of $30M for a little over $7.5 per share, Eli is paying now $60M in upfront and making a $15M equity investment at $1.6 per share for 5 more targets.  The focus this time has shifted from the liver to central and peripheral nervous system applications, and the protective variant concept was highlighted in the press release.  Lilly now owns approx. 17% of ProQR. 

Each target comes with $250M in potential development and commercialization milestones and given the early stage of the collaboration, royalties from commercial sales are capped at single digit percentages.

Another perk for ProQR is that it may access Eli Lilly oligonucleotide know-how and technology under the collaboration.  Eli Lilly has a rather long history of developing antisense and RNAi molecules.  ProQR values such external input a lot and as such partnership deals had been limited to those companies with a substantial investment in oligonucleotide therapeutics. And that Eli Lilly happens to be the partner again speaks to the apparent success of the ongoing collaboration.

ProQR stated in the conference call that Eli Lilly has an option to gain access to a final 5 targets for $50M and that the companies would be incentivized for this to happen in 2023.

But since the enterprise value (market cap minus cash on hand) of ProQR is barely $50M, why not just attempt to acquire this gem after the 6-month standstill expires this summer?  But before that will be the JP Morgan Conference in January, a biotech dating lovefest where new relationships are formed and deals are born.  Oligonucleotide powerhouses Alnylam and Ionis, or Big Pharma, this time perhaps of the European flavor would be my candidates playing interference with Eli Lilly.

Busy Week in Oligonucleotide Therapeutics

Ionis-Akcea ApoCIII Panel

Alnylam CNS Aspirations

Arrowhead Cardiovascular Data 

Dicerna Deal Pre-Announcement

It’s been a very busy week in the Oligonucleotide Therapeutics space, so I thought to memorialize the most important events of last week with this blog entry. 

Difficult Volanesorsen Panel

The highlight of the week certainly was the Advisory Committee on Volanesorsen (VLN; commercial name WAYLIVRA) for the treatment of Familial Chylomicronemia Syndrome (FCS) hypertriglyceridemia.  Here, the FDA, experts in the field, and sponsor Akcea Therapeutics were struggling to assess the risk:benefit of the ApoCIII-targeting phosphorothioate antisense gapmer. I had previewed the panel here.  

As I had expected, the majority voted yes on whether VLN should be approved for FCS.  

While following a very strict diet can be a powerful risk mitigator in FCS, it greatly affects quality of life and alone cannot absolve patients from the risk of pancreatitis attacks, abdominal pain and a range of other morbidities related to having very high triglyceride levels in the blood.  Because VLN is by far the most effective agent for lowering triglyceride, I would have been very surprised in this era of patient choice if a panel of experts wanted it to be out of reach for them.

Unfortunately, aside from on-target pharmacological efficacy, VLN performed very poor in terms of safety and tolerability.  Moreover, the trial was too small and ill-designed to tease out real disease benefits such as a lower pancreatitis attack rate and improved quality of life.  Not even a trend in favor of VLN could be discerned here.

As a result, the discussion was mostly centered around what an effective risk mitigation program (REMS) could look like to prevent dangerous bleeding events caused by the thrombocyte-(= platelet-) suppressing activity of VLN, the adverse event that was singled out as most concerning. 

Unfortunately, the practical experience with VLN showed that even closely following platelet counts and stopping VLN administration or adjusting dosing frequency in response to dropping levels are not able to stop such bleeding risk from continuing.  As such, it is to be expected that VLN will get onto the market without a really satisfactory REMS and that patients may have to accept the bleeding risk, knowing that treating physicians will be ready to administer steroids and/or IVIG should platelets drop to extremely low levels.

Due to thrombocytopenia and the range of other safety and tolerability issues and safety monitoring demands, there is a real possibility that VLN will mostly be a placeholder until safer ApoCIII-lowering alternatives can get approved.  In light of what we have learned from mipomersen and TTR-lowering drug Inotersen, the most negative impact of the VLN data is probably on the potential of systemically administered phosphorothioate antisense oligos outside of the liver.  While GalNAc for the liver and potentially GLP-1 peptides for pancreatic beta cells should keep required ASO levels substantially below the 200-300mg/week dose known to cause the tox and tolerability issues, the prospect for tissues, including muscle, that require systemic ASO administrations is less bright.

Having said that, there could be very simple solutions such as minimal reductions in the extent of phosphorothioation that miraculously can get rid of most of these side effects.  In the absence of a reliable animal model system, however, learning the rules in the clinic could take quite a few more years.  

Alnylam announces CNS aspirations

Another highlight of the week in Oligonucleotide Therapeutics was Alnylam’scoming out in applying RNAi for gene knockdown in the central nervous system (see presentation here). 

While CNS had been an area of interest of the company in its early days (Huntington’s Disease collaboration with Medtronic, a Parkinson’s program), the direct intrastriatal injection results and delivery approaches with old RNAi trigger formats were far from promising for clinical translation.  Not surprisingly, CNS had dropped off the corporate radar.

With the lesson learned from GalNAc-RNAi for the liver, most notably that of the importance of high chemical stabilization and ligands to maximize both oligonucleotide concentration and cellular uptake, and the surprisingly broad CNS biodistribution seen following intrathecal administration of antisense oligonucleotides by Ionis, it was only a matter of time that companies in the RNAi space would re-visit ‘old tissues’ for RNAi.  So with Arrowhead stoking interest in its RNAi efforts in the lung and Alnylam now in the CNS, RNAi is on the cusp of shedding its perception that it is ‘only for the liver’.  And unlike Ionis and Akcea, the RNAi space has street cred so that the capital markets are likely to buy into those claims.

To make matters worse for Ionis, Alnylam is now predicting that (similar to the liver), knockdown with its RNAi molecules should be longer-lived and much better tolerated than the phosphorotioate competition (from Ionis and Biogen): 

'Expect superior potency, duration and systemic safety profile vs. ASOs'

In light of the limited though promising public data (single rat intrathecal injection of 0.9mg of RNAi trigger causing substantial, ~75% target gene lowering for at least 1 month, the latest time point measured), it is too early to decide whether that’s true.  More information on this subject should, however, emerge over the next 2 years by which time Alnylam plans to file its first IND for the CNS.

Arrowhead highlights cardiovascular pipeline

Arrowhead Pharmaceuticals seems to have repaired relationships with investors following its DPC Waterloo and is increasingly getting credit for its GalNAc-based turnaround.  Outside of its lead programs in HBV and AAT-related liver disease, it is cardiovascular disease indications that are the focus of these efforts.

So at ATVB, the company presented an update on these programs with a focus on ANGPTL3 for the treatment of a range of lipid-related abnormalities, especially hypertriglyceridemia.  Of note, first monkey data showed that the administration of therapeutically relevant 3mg/kg triggered robust, 80% target gene knockdown lasting for more than 4 weeks. 

With INDs/CTAs planned for both ANGPTL3 and ApoCIII as well as potentially Lp(a) by partner Amgen anticipated before the end of the year, 2019 promises to be a clinical data-rich year for RNAi in cardiovascular disease.

Dicerna kind of pre-announces AAT-deal as investors get ready to sell shares

Much of what is going on behind the scenes at Dicerna is currently only being reflected by its SEC filings.  

On May 4, large shareholders who had supported the company throughout its litigation with Alnylam and now stand to be richly rewarded for it (~5x gain currently) had their shares registered for sale in an S-3 filing.  These shares account for a whopping roughly half of the shares outstanding.

To bring all investors up to speed, such a registration necessitates the filing of a prospectus.  Interestingly, this document was very specific in that the company now expects to partner the mystery orphan-disease candidate it has been talking about for quite some time this quarter:

‘We plan to seek a risk-sharing collaborator for this program before we file an IND and/or CTA, which we expect to be prepared to file in the second quarter of 2018.’

The document also removes any doubt that the secret target of that program is alpha-1-antitrypsin:

‘The protein causes progressive liver damage and fibrosis, in some cases leading to cirrhosis and liver failure, and we believe that silencing of the disease gene will prevent production of the abnormal protein and thereby slow or stop progression of the liver fibrosis. Greater than 100,000 people in the United States (“U.S.”) are believed to be homozygous (i.e. having identical pairs of genes for any given pair of hereditary characteristics) for the mutation that causes the liver disease, and at least 20% of those people, and potentially a significantly higher fraction, are believed to have liver-associated disease as a consequence.’

So if you were mesmerized by the stocks recent strong performance on modest volume, here’s a conspiracy theory: the company is helping supportive investors to get out on a high volume day that an AAT deal announcement would precipitate.  And spending a few bucks to run the shares up is well worth the investment. 

If the events unfolds as I speculate, it is yet another powerful reminder it is not sufficient for investors to merely follow the press releases, but carefully read the regulatory filings, even if they may seem dry and overly long. 

Addendum 15May18: on its quarterly conference call, Dicerna clarified its convoluted statement in the prospectus regarding the timing of partnership and IND of the mystery candidate. Accordingly, the candidate will be ready for IND/CTA filing by the end of Q2. An actual filing, however, will have to await a partnership which the company now guides for the second half of this year.  Apparently, they are currently in talks with 'more than two' potential partners.

Another focal point of the conference call Q&A session was the rationale behind the single-dose trial with DCR-PHXC for primary hyperoxaluria and how they want to use that as the basis for designing a pivotal registrational, multi-dose trial in 2019.  In this regard, contradictory statements were made.  On the one hand, the CMO contended that as seen with the more advanced program by Alnylam, most of the oxalate lowering can be seen following a single dose already so the company will have a good idea as to the necessary dose and dosing frequency for the pivotal trial.  On the other hand, the CEO predicted that repeat dosing is likely to be necessary to get an idea as to the actual oxalate-lowering potential of a given dose.  Here, I side with the CEO, but keep asking myself why on earth are they taking so much scientific and regulatory risk with a single-dose trial? 

Wave Rides Coattails of Ionis, Strikes CNS Deal with Takeda

Today, Wave announced the licensing of their (stereopure) antisense technology to Japanese Big Pharma Takeda for their application in the central nervous system (CNS).  In return for $110M in upfront cash, a $60M equity investment and other biobuck goodies, Takeda receives an option to co-develop/commercialize ASO candidates for the treatment of Huntington’s Disease (HD), Amyotrophic Lateral Sclerosis (ALS), and type III Spinocerebellar Ataxia (SCA3).  Takeda also receives opt-in right to additional preclinical programs.

This deal has clearly been driven by the outstanding data gathered by rival Ionis and its corporate partner Biogen in applying phosphorothioate antisense chemistry for diseases of the CNS.  This not only includes the remarkable efficacy and commercial success seen with splice-skipping oligo Spinraza for spinal muscular atrophy (SMA), but also preclinical knockdown and biodistribution data from many other CNS programs. 

Also of note, Ionis and Roche disclosed last December statistically significant knockdown of huntingtin in people with HD, the same indication as Wave’s lead neurology program which has entered clinical development.  Important additional color for the Ionis HD candidate, especially relating to the actual depth of target knockdown is to be presented  at the upcoming CHDI conference at the end of this month.

To wit, the efficacy of exon skipper Spinraza relied on gain-of-function where minor (say 20%) target engagement may already translate into significant clinical benefit.  Most other programs, however, aim at inhibiting a disease-causing molecule from being made.  Here, you may want more like something of the order of 50%+ target engagement. 

Another wrinkle is that the target cells in the CNS will differ from indication to indication whilst antisense efficacy is not homogeneous throughout the CNS, so the SMA and HD program data will not have de-risked all the indications.   

Nevertheless, it is crystal clear that phoshorothioate oligos hold tremendous value for the many diseases of the CNS of high unmet medical need for which the industry is more and more relying on gene-targeted approaches after years of failures with small molecules.  And kudos to Wave for retaining substantial commercial value to the licensed programs.  

So thank you, Ionis, for making it exceptionally easy for them!

Biotech M&A Heating Up, But Only One Oligo Company In-Play

The M&A activity in biotech has picked up additional steam this week with Celgene buying CAR-T player Juno Therapeutics for $9B and Sanofi buying blood disorder biotech Bioverativ for $11B (the latter shining a positive light on the recent Alnylam-Sanofi deal restructuring). And according to insiders, an unusually high number of additional deals are being finalized following the JP Morgan conference.

RNAi, ASO, genome editing, gene therapy platforms not in-play

Although another CAR-T player, Kite Pharmaceuticals, got acquired late last year by Gilead for $12B and both Juno and Kite had been billed as CAR-T platform plays, these acquisitions are unlikely to read through to gene-targeted platform technologies that are more broadly applicable across disease areas.  These include RNAi, antisense oligo, genome editing, and traditional gene therapy.

This is because the CAR-T acquisitions were driven by the desire of the acquirer to add near-term revenue growth to the topline while strategically positioning themselves in the blood cancer arena.  Of course, the underlying CAR-T platform technology will continue to be further utilized, but it is the near-term revenue streams from their drug sales that justify the multi-billion price tags to the bean-counters inside these companies and like-minded investors.  

These deals therefore do not signal to me a willingness of Big Pharma and Biotech to shell out $3B or so that they would have to acquire companies like Editas, Sangamo, and CRISPR in genome editing or Arrowhead and Dicerna in RNAi in the current marketplace.  This may also be informed by their experience in the RNAi space a decade ago when companies like Merck and Roche made large investments in the platform only to literally die in their hands while it was much smaller, nimbler pure-play companies that have now advanced the technology to commercial maturity.   

Also, more so than a decade ago, Big Pharma/Biotech has adopted a model where they focus on a few disease categories such as oncology, cardiometabolic, or the CNS, in a modality-agnostic fashion.

Target-based technology access 

Accordingly, when technology access for early-stage product development is sought, large companies prefer to partner on a limited number of targets.  This is illustrated by a range of deals over the last year or so such as in the RNAi (Dicerna-Boeheringer for NASH, Arrowhead-Amgen for cardiovascular disease) or genome editing (Sangamo-Pfizer CNS deal) spaces. 

In some cases, such deals may cover multiple targets in the same tissue using the same delivery technology.  These include deals such as the one by Editas Medicine with Allergan in ophthalmology.  

And only in rare cases such as the partnership between CRISPR Therapeutics and Bayer are multiple targets spread across multiple disease types (blood disorders, blindness and congenital heart disease) and may be largely unknown at the signing of the deal.  Such multi-target deals, however, have become less likely as the cost of capital for raising money on the Street has gotten lower and the market caps of these companies commensurately have increased.  At that point, it is advisable for the platform company to forego upfronts and near-term milestone payments that pale relative to their market caps and instead retain maximal low-hanging-fruit target-picking flexibility. 

Only Ionis Pharmaceuticals in-play

According to the above, only Alnylam and Ionis Pharmaceuticals with multiple important drug candidates about to be approved over the next 3-4 years would fulfill the requirement for adding needle-moving near-term revenue growth to a large acquirer.  With a $13B market cap already and a power-hungry management to build the most successful biotech company in history, I do not see large companies ultimately offering the ~$40B it would likely take for a successful bid for the company.

By contrast, Ionis Pharmaceuticals with a market cap of $6B and a likely more robust stream of oligo drugs hitting the market (Spinraza for SMA last year, Inotersen for TTR amyloidosis and an ApoCIII-lowering drug this year alone) appears to me a more realistic target despite its history of engaging in multiple partnerships with a number of large pharmaceutical companies, partly in an effort to make it a less appealing takeover target.

The likely acquirer would be Biogen, of course.  When Ionis and Biogen initially partnered to address in early 2012 on what has become the SPINRAZA blockbuster, Biogen quickly learned how powerful and widely applicable antisense technology could be for addressing CNS disorders.  In less than 2 years, the companies would sign another 3 partnerships ultimately covering numerous targets in the CNS which is where Biogen has gone on to firmly stake its future on.  

As we know today, giving away so fast so much of the upside to the CNS franchise was a mistake on Ionis' part as the CNS has emerged as the area of highest value to the current antisense platform full-stop.  SMA was only the beginning and diseases like Huntington’s, Alzheimer’s, ALS- you name the neurological disorder- suddenly seem within targeting reach.

Still, adding up the royalty payments and milestone payments for such licensed products would add up quite a bit.  In fact, SPINRAZA payments alone would justify Ionis' current market cap as it is growing into a multi-billion annual revenue drug and cornerstone to Biogen's SMA franchise.

Because other Ionis-licensed CNS product candidates would also address the root causes of diseases, they would similarly lend themselves to become cornerstones in new CNS franchises that Biogen is targeting, e.g. ALS.

So when Biogen’s CEO calls M&A valuations being reasonable and not over-stretched as frequently asserted by his colleagues and then goes on to mention recent CNS breakthroughs in SMA (à Spinraza), Huntington’s (watch out for knockdown data from phase I/IIa late Feb/early March), migraine, and multiple sclerosis, I cannot shake the feeling that Ionis will be the target of the big M&A move that everybody is expecting Biogen to make.  $20B and we have a deal. 

it could mean that the company that tried its best in the oligo space not to be an M&A target, Ionis, could be one of the next to be acquired.  

Gene Knockdown in Disease Involving Gene Expression Throughout Brain Reported

Today, Ionis issued a press release revelaing that their drug candidate for Huntington’s Disease was able to knock down the huntingtin target gene in a dose-dependent manner.  This is the first clinical demonstration that single-stranded phosphorothioate antisense technology cannot only engage gene targets, as had been shown in the gain-of-function approach for spinal muscular atrophy (SPINRAZA; slide 58), but that it could do so in a sufficiently robust manner so that a knockdown could be measured.

This, of course, has broad implications for the Ionis antisense platform which is similarly being developed for other RNaseH-based knockdown applications ranging from the rare and severe (e.g. ALS, spinal cerebellar ataxias) to the more common neurodegenerative diseases such as Alzheimer’s and Parkinson’s.

The reason why this feat is remarkable and a great de-risking event for the technology is that in some of the indications, the target gene is expressed and needs to be suppressed more or less throughout the brain.  Assuming Ionis didn’t take brain biopsies, but instead looked for protein expression by taking CSF samples which would +/- give you an average of target gene expression in the entire CNS (a safe assumption), the ability to assess a dose-dependent gene knockdown is a testament to the robustness of the gene knockdown.

The actual numbers, however, remain under wraps as Ionis and partner Roche (which has exercised its option to IONS-HTTRx in the wake of the data) plan to present them more formally through a publication and a conference presentation with key thought leaders in the disease present.  My guess is that peak knockdown is in the 50%+ range which Frank Bennett from Ionis has recently referred to be in the desired knockdown range.

Given that dosing in the study only lasted 3 months in this slowly progressive disease, it is unlikely that actual clinical benefits will be reported from this phase I/IIa study.  But given the so called 'huntingtin knockdown holiday phenomenon' and some remarkable comments from investigators in the study and KOLs, one cannot but hope that we’ll be in for a positive surprise.  

More RNAi Therapeutics Deals by Alnylam and Silence Therapeutics

Silence Therapeutics and Alnylam Pharmaceuticals hardly let a week go past without announcing partnership news leveraging their IP position in the RNAi Therapeutics arena.

When Alnylam and the medical device company Medtronic announced their initial partnership in 2005, the plan was to evaluate Medtronic’s CNS drug delivery devices for use with RNAi Therapeutics (see July 22, 2007 Blog: “Looking Ahead: Alnylam-Medtronic Alliance Stop-Go Decision Expected Soon”), and a joint decision on whether to continue pursuing such drug-device combinations would then be made in 2007.

Yesterday, the companies announced that the progress to date, particularly in their pre-clinical program for Huntington’s disease, warranted a continuation of their partnership. Simultaneously, the original terms of the agreement were amended as a 50:50 relationship in the US, while Medtronic will be solely responsible for development and commercialisation in Europe. It is not clear, however, whether Medtronic will make a $1-8M equity investment in Alnylam as under the original agreement. If not, the new deal structure might reflect the greater flexibility gained by Alnylam through their strong financial position, especially in the wake of the Roche alliance 2 weeks ago.

Such details should become available during next week’s Q2 conference call. Meanwhile, the decision to pursue this alliance further speaks to the promise of RNAi Therapeutics for the treatment of neurodegenerative diseases.

In a similar development, Silence Therapeutics announced a deepening of their existing partnership with Quark Biotech. Quark Biotech, which only very recently dropped their ambitious plans to go public, has two ongoing clinical programs with siRNAs licensed from Silence. In the new agreement, Quark obtains non-exclusive rights to develop RNAi Therapeutics for three gene targets using Silence Therapeutics’ AtuRNAi platform. Details of the deal were not available, but it does not appear to involve a significant upfront cash payment to Silence. Although the deal sizes by Silence Therapeutics pale in comparison to those of Alnylam, at least some of their partners appear to be convinced that Silence’s AtuRNAi technology is sufficiently distinct from Tuschl’s siRNAs to be worth paying money for. It could also mean, however, that some are unwilling or unable to meet the terms that Alnylam can ask for now.

Looking Ahead: Alnylam-Medtronic Alliance Stop-Go Decision Expected Soon

In early 2005, Alnylam and Medtronic announced a joint product development program to evaluate the use of Medtronic’s implantable drug delivery devices for RNAi Therapeutics applications of the central nervous system (CNS). If at the end of this development program a joint decision for the continuation of this program were made, Medtronic would take an equity position in Alnylam and additional investments following the achievement of certain milestones.

According to regulatory filings, the original decision making due date was April 2007, but was then postponed to July 2007. It is interesting to speculate that this delay may have been either caused by scientific uncertainties or is the consequence of drafting a comprehensive and therefore complicated co-operation agreement. Certainly, in development time-frames, 3 months do not seem to be sufficient to reasonably expect major new breakthroughs had there been fundamental scientific problems.

Medtronic realised early on the potential of RNAi as a new class of drugs that could be used with their drug delivery devices. Only shortly before the 2005 agreement, in August 2004, Medtronic published a patent on the treatment of neurodegenerative diseases such as Parkinson’s, Alzheimer’s, and Huntington’s, through intracranially delivered siRNAs using Medtronic’s implantable catheters (United States Patent 20040162255). Two years later, a similar patent was published for the treatment of neuropathic pain.

While pertinent in vivo data are lacking in these patents, it is clear that Alnylam already has amply tested Medtronic’s devices. Josephine Lai from the University of Arizona Health Sciences Center in Tucson, a Alnylam collaborator, for example has published strong in vivo data on intrathecally delivered siRNAs [Luo et al. Mol. Pain 1: 29 (2005)]. It is also of note that in this study, siRNAs were most efficient when formulated in the liposomal i-Fect transfection reagent from Neuromics. The same reagent was also successfully applied in rescuing mice from lethal flavivirus infection of the CNS [Kumar et al. Plos Med. 3: e96 (2006)].

One potential limitation with the local delivery of siRNAs and shRNA vectors such as AAV, however, is to achieve sufficient diffusion of the RNAi inducing agent to its target cells. That diffusion of macromolecules in the dense matrix of the CNS may also be an issue with a device from Medtronic similar to the one Alnylam is evaluating, is suggested by the failure of a phase II clinical experience of the neurotrophic factor GDNF for Parkinson’s [Salvatore et al. Exp. Neurol. 202:497 (2006)]. This particular experience, however, has to be taken with a grain of salt, as there appears to be some controversy about the interpretation of the trial results [Slevin et al. Annals Neurol. 59:989 (2006)]. A positive announcement on the Medtronic-Alnylam alliance may therefore indicate that it is possible to achieve sufficient siRNA diffusion.

Nevertheless, local delivery may not be sufficient for diseases where the whole brain has to be targeted, such as in viral infections and brain tumours. Here, systemic delivery solutions are needed. While the blood-brain barrier has historically been regarded as a major obstacle to achieving that goal, targeted approaches such as the rabies-peptide conjugation approach that I have highlighted in my June 19 Blog (“New Breakthrough in the Systemic Delivery of RNAi for the Brain”) and similar efforts make me hopeful that a range of both local and systemic delivery strategies will eventually prove successful in addressing a number of diseases of unmet medical need. These issues also highlight once more, that it will be critical to carefully tailor the delivery of an RNAi Therapeutic to its disease application.

Blog Watch: The ‘Old Vic’ blog talks about a possible takeover or significant RNAi Therapeutics alliance involving Silence Therapeutics: http://www.sharescity.com/2007/07/silence-therapeutics-takeover-rumours.html