Alnylam Acquires Merck’s RNAi Assets and Gets a $700M Investment from Genzyme

I have expected RNAi Therapeutics business development activities this January, but I have to admit that when these deals are actually announced it gives me an adrenaline rush each time.  For $175M plus some milestones and royalties, it was announced a few hours ago that Alnylam will acquire the RNAi assets from Merck.  Merck had just undergone a corporate re-organization that I had speculated could spell the end of Merck’s RNAi Therapeutics platform development efforts, especially since protein guy Roger Perlmutter replaced RNAi supporter Peter Kim as Merck’s head of R&D (Merck’s RNA(i) Therapeutics Unit on the Chopping Block).  That's how it sometimes works, no complex science, just tastes and egos.

In addition to cultural issues, the transaction also solves the problems that the bean counters in Big Pharma face when justifying investments in emerging technologies.  How e.g. do you take into account that much of the value of a platform technology could be outside of your core areas of therapeutic interest?  Who e.g. would have predicted that TTR amyloidosis and HBV would materialize as the two commercially most attractive near-term opportunities when Merck acquired Sirna Therapeutics in 2006?  As an added sweetener for the bean counters, the write-off will allow Merck to exceed financial guidance in one of the coming quarters.

The $175M price tag has two important implications.  Firstly, for a biotech company the size of Alnylam, putting that much into the acquisition of largely IP is a vote of high confidence in RNAi Therapeutics.  This is in sharp contrast to the days when Alnylam made deals with Roche and Takeda and must have felt as if they made out like bandits by selling IP of uncertain value given the questions around Alnylam’s access to delivery at the time.

Secondly, the $175M indicates that there was competitive bidding going on for the assets, most likely by other Big Pharma companies.  In fact, I had suggested to some of the other RNAi companies to take a look at the assets in the hope of another Roche-Arrowhead-like 'steal of the century'.  The fact that Alnylam won out is likely explained by Merck being the best strategic fit for Alnylam whereas other Big Pharmas may be better off in getting unfettered access to RNAi Therapeutics via the likes of Tekmira and Arrowhead Research as Merck's RNAi assets, by largely copying the efforts of others, always seemed to overlap with others (except for modification chemistry) 

So what will the $175M get Alnylam?  The most valuable aspect to Alnylam should be Merck’s development efforts in polyconjugate technology where Merck has been copying Arrowhead’s efforts.  Thus, instead of spending something like $1B, likely the current acquisition value of Arrowhead Research, it was able to get access to a similar technology for much less.  Although Merck also pursued liposomal delivery, since Alnylam already has access to Tekmira’s technology, the add-on value of Merck’s liposomes to Alnylam is more limited.  Finally in terms of technology, Merck has conducted a deep screening of nucleic acid modifications which can now be incorporated into Alnylam’s RNAi trigger discovery and conjugate development efforts.

Another important aspect to Alnylam will be safe-guarding the value of the Tuschl II IP.  Merck got uncontested access, including sublicensing rights, as part of a legal settlement between the two companies in 2011.  Tuschl II is still an important asset to Alnylam and in a worst-case scenario, Merck’s disposition of their RNAi assets would have meant giving away access to Tuschl II to various competitors.

Genzyme Buys into RNAi Therapeutics Big Time

The Merck technology acquisition will be funded by the $700M investment of Genzyme into new Alnylam stock at a 25% premium to current trading (~12% of the company) plus additional associated biotech goodies to come (correction: only $25M of Merck's $175M was in cash, $150M in shares).

I know that I am starting to come across like a know-it-all, but this transaction did not come all that surprising to me, too.  Importantly, 3-4 years ago Alnylam started to lease out significant lab space to Genzyme in Cambridge, Mass.  This seemed odd to me since Alnylam was not in the business of dressing up its financials by moonlighting as a landlord.  Surely, something more strategic was going on here. 

When a little more than a year ago, Genzyme took the Asian rights to ALN-TTR02, it seemed a bit of a downer.  In retrospect, however, it is apparent that Genzyme took that license as a starter before more validation of the technology in the form of phase II results with ALN-TTR02 and phase I results with ALN-TTRsc would trigger a more expansive deal like the one today.  Specifically, today's deal gives Genzyme Sanofi-Aventis limited commercialization rights to at least 3 additional Alnylam drug candidates in the orphan drug space.

And finally, attention Big Pharma bean counters, a lesson of that transaction is that all you need to do to financially justify investments in RNAi Therapeutics is to create a line item called ‘orphan drugs’ and account for RNAi Therapeutics under that label. 

Welcome to a new pharmaceutical world.

First Antisense Oligo Approved for Gene Knockdown in Liver

In a milestone for antisense oligonucleotide technology, Kynamro (aka mipomersen) yesterday received US regulatory approval for the treatment of homozygous familial hypercholesterolemia (hoFH).  It is the first regulatory approval for a systemically delivered oligonucleotide-based drug addressing a target in the liver, following two locally applied oligonucleotide drugs (aptamer Macugen and antisense oligo Vitravene) that have been approved for ocular diseases.  Considering that next month a TLR oligo-enhanced HepB vaccine by Dynavax could join the ranks of oligonucleotides licensed for medical use, oligo drug technology is rapidly shedding its image as an oddball technology and going mainstream.

Commercial Prospects

The hope, of course, is that Kynamro will also be the first commercially meaningful oligonucleotide considering lackluster sales histories by Macugen and Vitravene.  Favoring such success is the strong pricing power with drugs for orphan indications such as hoFH which is estimated to affect 3000 patients in the US and Europe each.  Small molecule drug Juxtapid by Aegerion for example received approval for the same indication last month and will price at $250.000 per annum.  With 1000 patients on the drug, this would mean sales of $250M already. And with the fudgible definition of symptomatic, instead of strictly genetically defined homoFH and the aggressive ‘friending’ of orphan drug salesforces with disease groups, I expect quite a bit of ‘label creep’ (Aegerion's CEO has indicated that he expects hoFH patients to somewhat respond to PCSK9 inhibitors which I can only explain if the patient population he considers homoFH includes quite a few non-hoFH when defined genetically).

With an expected price for Kynamro of $100k per annum, I optimistically project around $100M in annual sales assuming marketing partner Genzyme can get 1000 patients on drug in the US. With a ~35% profit share, a 50% profit margin and 50% attrition, ISIS Pharmaceuticals would pocket around $10M in annual profit share from this approval in a few years.

Update 30Jan13: It appears that according to a WSJ article (to which I cannot get access), Kynamro will be priced at $176k per year.  This, of course, would significantly improve ISIS profit share assuming same patient numbers treated (possibly 70% profit margin, slightly higher royalty rate in addition to higher sales --> $20-25M p.a.).

   

RNAi versus Antisense for gene knockdown in the liver

To maintain such sales numbers, however, the salesforce will have to fight hard to keep patients on the drug.  During the extension of the phase III study in homoFH, over half of patients  discontinued due to safety and tolerability issues, injection site reactions and liver safety (prompting a Black Box warning) being the main culprits. Having said that, the label for Juxtapid does not look any better, in fact a bit worse with all the intestinal side effects and drug-drug interactions, offset, however, by the increased potency in LDL-c lowering.

As some of the side effects are not target-specific (e.g. the injection site reactions and flu-like symptoms and also some of the liver enzyme elevations which are not fully accounted for by the liver fat elevations), the modest tolerability of and safety concerns with Kynamro (including vasculitis as well as liver and skin cancers especially when considering the preclinical data) raises the question whether systemically delivered phosphorothioate-based antisense technology has much of a future for gene knockdown in the liver also in light of increasing competition from RNAi delivery technologies.  You will not be surprised that I subscribe to the view that among Tekmira’s SNALP and the subcutaneous alternatives by Arrowhead (DPC) and Alnylam (GalNAc), RNAi will become the preferred technology for gene knockdown in the liver.

Whether RNAi or antisense, oligonucleotide therapeutics are here to stay. 

RNAi and Antisense Targeting the Same Gene: Not a Zero-Sum Game

Transthyretin-mediated amyloidosis has become the single-most important factor for the 3-5 year valuation of certainly Alnylam, and possibly ISIS Pharmaceuticals as well. After TTR, Z-alpha-1-antitrypsin (Z-AAT) is gearing up as the next Alnylam(RNAi)-ISIS(antisense) battleground. Expect to hear competitive language from the two camps why their approach will prove superior over the other.  It is, however, worth keeping in mind that having two candidates race towards approval can also have significant pie-enlarging benefits.

Raising Awareness and Pressuring Regulators

A good competition will attract attention, from patient groups, physicians, regulators, and the investor community.  Patient groups and physicians will be primed that after years of lacking treatment options, the time for change has come.  We have seen this with the trifecta ofweight-loss drug candidates, two of which have recently been virtually willed into approval.  Given the enormous problem of obesity, it became politically untenable to further withhold treatment options.  Eventually, the regulators were forced to give in to the pressure despite their original objections over safety.

Closer to home, similar awareness and pressure is being brought to bear on getting exon-skipping oligonucleotides approved for the treatment of Duchenne Muscular Dystrophy, stoked by the competition between Prosensa/GSK and Sarepta .  If you caution about hurried, aka accelerated approval, then you are readily labeled as a heartless misanthrope.  Similarly, the homozygous familial hypercholesterolemia population has already been educated, targeted, and friended by both patient-access specialist Genzyme and competitor Aegerion and probably strongly expect the new drug approvals.  

Understand that these comments are not meant to be judgments on the respective drug candidates, but just the way I view current dynamics.  In fact, I agree that developing drugs for many of the rare and severe (orphan) diseases requires more risk-taking, usually biomarker-based approaches, and that not too long ago patient needs were not sufficiently considered in a highly risk-averse regulatory climate.

The TTR Amyloidosis Race

Given that Pfizer’s drug candidate tafamidis does not appear about to revolutionize the treatment of TTR amyloidosis, I see similar pressure building for the approvals of gene knockdown approaches ALN-TTR02 and ISIS-TTRRx in 2015-6.  The intense competition between ISIS and Alnylam will provide good fodder for the press (just as it does for this blog), engage the minds and pad the pockets of key opinion leaders and consequently raise the expectations of the public and hopes of those suffering from the disease.

While I have 2015-6 approvals baked into my projections of the RNAi Therapeutics story, I wouldn’t mind a year’s delay if the competitive dynamics would allow for it.  In fact, I expect the FDA to manipulate the process in a way that both drug candidates will come before an AdCom panel together, making the obsession with speed over good science even more so nonsensical.

My problem with ISIS and GSK speeding straight into a phase III study after a single phase I study is that they do not seem to have identified a suitable dosing regimen: 400mg/week good efficacy (-81% knockdown), but probably too high a dose from what we know about the safety of phosphorothioate oligonucleotides; 200mg/week could fare better in terms of safety, but has shown only modest knockdown efficacy (-44% knockdown).  In my opinion, another dose-finding study would be in order under normal circumstances.

[Update 29Nov2012: The Clinicaltrials.gov entry for the upcoming phaseII/III ISIS-TTRRx trial shows that the companies have chosen the stab-in-the-dark 300mg/week dose.  Although the January 2012 phase I results press release made no mention of such a cohort, the June 2012 Annual Shareholder Meeting TTR poster shows data from a 300mg cohort (~70% knockdown).  Unlike all the other cohorts were 90+ day data, the 300mg cohort data was less than 50 days.  It thus looks like a 300mg cohort was included post-hoc. Unfortunately, ISIS has chosen not to list the phase I trial on clinicaltrials.gov.]

This concern over uncertain dosing schedules also applies to Alnylam's ALN-TTR02 (-87% peak knockdown, -67% knockdown after 28 days following single dose) where the current ‘multi-dose’ phase II study only seems to cover two doses.  You would hope that Alnylam presses hard to amend the study to include further doses to gain more experience with the repeat-dosing pharmacology of ALN-TTR02 before betting their house on a single pivotal phase III trial.

Once approvals are obtained, however, the beneficial aspects of competition should disappear quickly especially when small orphan disease populations are involved.  But until then, the race towards approval should free energies allowing TTR amyloidosis to become the first real commercial success story of either RNAi Therapeutics or RNaseH antisense.

Who do you think will win the TTR race? Take part in the survey (upper right hand corner).   

Bullish on RNAi Therapeutics

Attending the Oligonucleotide Therapeutics Society meeting last week in Boston, I could sense a new bullishness around RNAi Therapeutics like I haven’t in a long time.   

Big Pharma: Tipping the Scales in Favor of RNAi Therapeutics

Over the last year, we have been witness to the clinical successes of Tekmira’s SNALP delivery that literally saved the sector.  After nightmarish years, these results had investors enjoy the doubling and tripling of the share prices of companies like Alnylam, Tekmira, and even non-SNALP players such as Silence Therapeutics.

For the next leg of expanding investments in RNAi Therapeutics, a renewed, publicly visible commitment by Big Pharma would be important.  With Genzyme taking a license to Alnylam’s transthyretin amyloidosis program, a first step in that direction has been just made.  On the platform side, it is worth noting that the two most significant Big Pharma players in RNAi Therapeutics, Merck and Novartis, were also represented at the conference.  One can only hope that the current RNAi Therapeutics clinical and scientific tailwind will give their internal champions the ammunition to push the technology into the clinic in the next 2-3 years and therefore escape the Sword of Damocles that surely must have been felt dangling above them.

Unfortunately, if these two companies, like so many others it seems, big and small, insist on using ‘their’ own delivery technologies, chances for that will be much reduced.  With all due respect, but the presentation on RNAi delivery by Merck was just a review of the most advanced systemic delivery technologies, SNALP (Tekmira), DPCs (Arrowhead Research), and GalNAcs (Alnylam) exemplified by Merck’s homebrew versions.  Somebody needs to show me the math behind it- I just don’t get it.  The only explanation for me is pride and the resistance against collaborating after having invested internally so much.

A re-commitment towards RNAi Therapeutics should also be at the expense of ‘naked’ RNaseH antisense.  Although in his keynote speech, Alnylam’s CEO made a point of congratulating ISIS CEO Stan Crooke (sitting in the first row) on the recent mipomersen Advisory Panel, there was considerable talk during the conference about antisense-related toxicity, also as regards the high-affinity versions.   And even Stan Crooke could not help but admit that the RNAi Therapeutics results have ‘exceeded [his] expectations’.  However, since ISIS claims ownership over RNAi Therapeutics, as it does indeed over most of oligonucleotide therapeutics anyway, his pain should be limited if indeed he believes what he is saying [note: Dr. Crooke in discussing the safety of mipomersen went as far as saying that there has been no imbalance in its safety profile compared to placebo, and when there was an imbalance, it was in favor of mipomersen...for a starkly different view, see here].

A Breath of Fresh Air in Delivery

A conference highlight were the new results from Arrowhead Research on their new DPC delivery, a conjugate approach.  Potent gene knockdowns in the liver with an apparently reassuring safety profile in non-human primates using subcutaneous delivery is certainly deserving of some serious attention.  Having had systemic delivery of synthetic RNAi triggers almost for themselves for the last few years, Tekmira seems to be finally getting some company- although in terms of validation, SNALP is still years ahead and more de-risked.  Such increased diversity of approaches should also be good for attracting general interest to the sector as it would be viewed as more vibrant and with more disease opportunities.

5 Reasons to be Bullish on RNAi Therapeutics

1)      Clinical results show that RNAi Therapeutics in Man can be made to work (Tekmira’s SNALP delivery);

2)      RNAi Therapeutics ideally suited to address orphan disease, the hottest category in drug development;

3)      RNAi Therapeutics has taken the lead over RNaseH antisense for gene knockdown;

4)      Big Pharma coming back to RNAi Therapeutics;

      5)      Vibrancy of sector increasing (e.g. recent results on Arrowhead’s DPC technology). 

A Side Note on the Conference

To some degree reflecting the increasing maturity of Oligonucleotide Therapeutics, the 4-day program did not include important programs in the field.  Not only was Tekmira notably missing, but also efforts such as Dynavax’ important HepB vaccine candidate that could soon allow oligonucleotide ‘therapeutics’ to touch many lives.  Moreover, the industry-academia balance was tilted in favor of industry like I have not seen before.   

The Mipomersen Briefing Docs: Gymnotic Delivery Revealed

After Alnylam’s CEO John Maraganore famously failed to deliver on his Big Pharma platform partnership promise in 2009 (aka ‘SRTL’), and ISIS Pharmaceuticals announced a preferred partnership with GSK in March 2010, it seemed that Dr. Maraganore salesmanship was outdone by one of the best biotech salesmen ever: Dr. Stanley Crooke. 

In addition to likely having deprived Alnylam of a deal, what is this salesmanship claim based on?  It is the fact that not all that long ago, antisense technology had fallen out of favor in Big Pharma.  This was because it required large amounts of oligonucleotides and, partly as a result of that, was associated with non-specific immunostimulatory effects.  And this is where the more elegant RNAi Therapeutics was supposed to take over. Despite this poor track record, the technology managed a comeback, ironically partly on the back of RNAi Therapeutics which was seen stumbling at the ‘delivery’ stage.  In some cases out of the frustration of making RNAi delivery work, the 'naked' delivery approach of antisense would be embraced by the likes of GSK, BiogenIdec, Pfizer, Genzyme, and VCs making the application of Santaris' LNA technology the basis of start-up biotechs targeting emerging classes of non-coding RNAs such as microRNAs or long non-coding RNAs.

The reason, however, why I had always favored RNAi as the more ‘natural’ gene silencing modality over antisense is that antisense, to this day, relies on achieving extremely high steady-state tissue concentrations (>100-300mg/kg of liver and kidney tissue e.g., see ISIS TTR patent application US2011/0294868) either by using reactive/sticky chemistries such as the phosphorotioate backbone or more gentle backbones such as the morpholino chemistry that, however, require even larger amounts of oligonucleotides.  

Mipomersen Briefing Docs Surprises

Unfortunately, the publication last week of the FDA Briefing Document related to the new drug application (NDA) for Mipomersen (tradename: KYNAMRO) by ISIS and partner Genzyme, should serve as a reminder that giving an old technology new names such as ‘gymnotic’ or saying that the algorithms now allow for the discovery of much more potent antisense sequences without any new chemistry (despite the fact that narrow tiling had always been practiced) are telltale signs that the biggest change that has occurred was in the marketing department.

The selective disclosure strategy by ISIS Pharmaceuticals on mipomersen has certainly contributed to the impression that antisense technology had indeed made important progress.  Dr. Crooke claimed in a recent interview on Mad Money with Jim Cramer that ISIS had been very transparent with mipomersen.  I could agree that there has been a lot of scientific data released on mipomersen by ISIS and their clinical investigators, but in hindsight this was arguably not for the claimed sake of transparency, but for providing the impression that mipomersen was a safer drug than it probably is. 

Here are a few examples of the ‘surprises’ that were revealed in the Briefing Docs:  

1) Liver Fat: More and Persistent

While the significance of the non-alcohol-related accumulation of fats in the liver in predisposing towards liver fibrosis is still hotly debated among experts, ISIS tried to dispel the still understandable fears about ApoB-knockdown-related fat accumulation in the liver by claiming a) that it was only modest, and b) that feedback mechanisms allowed the liver to adjust and that liver fat would decrease over time.  Supporting the impression that ISIS was concerned about transparency was the publication (Visser et al. 2010) of liver fat data from a 13-week study in a small, 21-patient study population which only showed a trend of such accumulation (median control-adjusted increase from baseline to day 99 of < 1%).  

Compare that to the actual results (as revealed in the Briefing Docs): In study ISIS301012-CS7 and CS12, 61.8% (63/102) in the mipomersen group had a > 5% increase in hepatic fat content.  This already shows that the median increase is definitely higher than 5%, not < 1%. Moreover, in study CS6, 16% had average liver fat of > 20% measured at least once.  30-40% liver fat contents also were not uncommon.  Such values were practically not observed at baseline or in control subjects despite ISIS’ repeated claims that such values are of no concern since NAFLD is so common anyway.

Furthermore, the data such as capture in Figure 10 of the Briefing Document show that there is no basis for claiming that the liver adapts and liver fat contents come down over time.  They only come down after you discontinue treatment.

Suggesting that the fat accumulations could be of clinical significance, a fibrosis-related biomarker score (ELF) was elevated in the mipomersen population.

To be clear, at least the liver fat accumulations (not sure about  the ELF score) is very likely a target-related side effect and cannot be attributed to the phosphorothioate antisense platform per se, but it is an important issue for mipomersen and raises suspicions about the way ISIS Pharmaceuticals has dealt publicly with platform-related safety issues.

2) Partial Clinical Hold: Vasculitis

Were you surprised by the fact that, according to the Briefing Doc, the FDA issued a Partial Clinical Hold for the non-severe LDL patient population in January 2008?  I certainly was taken by surprise and would also think that this should have been disclosed in an SEC filing as a Partial Clinical Hold for your lead program should be considered a material event.  Not only can shareholders be pitied, but also Genzyme which less than a month before invested more than $300M in mipomersen! I cannot imagine that they would have closed such a deal had it known that there was data that would trigger such a Hold (I do not exclude that the data was there under their nose, but in that case it was probably either buried under a pile of paper, or Genzyme just did not do their job well).

Apparently (à Briefing Doc), the ‘final interim report’ from the 52-week monkey tox study that was submitted in June 2007 showed vasculitis (inflammation of the vasculature which can impair blood supply and therefore organ function, possibly leading to organ failure) at clinically relevant doses of 3mg/kg and up, mainly, but not exclusively, in the gastrointestinal tract. Although the Hold was lifted after the actual clinical safety data did not indicate vasculitis to be an issue, subsequent skin biopsies around the injection sites showed an accumulation of inflammatory cells around the vasculature.

Although similar to the liver fat issue, the clinical significance and degree of systemic vasculitis due to phosphorothioate oligonucleotides remains unknown in Man, the potential for sustained inflammatory processes in the entire vasculature is a serious safety concern that needs to be studied in more detail before the technology can be applied to less than the most severe, 'orphan' patient populations- if at all.

3) Liver Enzyme Increases

That mipomersen increased liver enzymes in the serum, a measure of liver tox, has been widely known.  But ISIS used to claim that in a given individual these were one-off findings that could just as well have come after a night of heavy drinking.  By contrast, it seemed to me new news that there were cases where elevated (>3x ULN) liver enzymes were found on at least two subsequent investigations.  In fact, the FDA feels that the liver enzyme increases warrant them be tightly monitored as part of a REMS program should mipomersen be approved in the homoFH population.

4) Injection-Site Reactions and Discontinuations

One of the major marketing tools, and in fact actual draws, of ‘gymnotic delivery’ has been that it can be subcutaneously administered, while the leading RNAi Therapeutics delivery technologies, foremost Tekmira’s SNALP, still rely on intravenous infusion (for most applications at least).  Turns out that injection site reactions ranging from pain, redness, swelling, to skin discolorations and haematomas were a major factor for study drug discontinuations, especially in the open-label phases of the studies which should be indicative of what will happen in a real-world setting.  Overall, 61% of HoFH patients (23 of 38) discontinued study drug during the open-label phase, and 77 of 141 discontinued in the pooled Phase 3 population (including non-hoFH subjects).  Other adverse events attributable to the inflammatory potential of the technology, such as flu-like symptoms, contributed to the high discontinuation rate.

A curious, hitherto undisclosed finding, were injection site recall reactions with mipomersen (but not control).  This refers to an inflammatory reaction at an old injection site when the drug was administered at a new site.  The molecular basis and importance for such recall reactions seem unknown.  In fact, my literature searches suggest that they have almost exclusively been described for the TNF-alpha blocking antibody Enbrel.  However, to me, they once again indicate the systemic inflammatory potential of phosphorothioate antisense chemistry, likely involving adaptive immunity.  Accordingly, 30/50 patients (60%) in the CS5 and 6 studies exhibited mipomersen antibodies compared to none in the control population- another ‘surprise’ that should be applicable to the phosphorothioate platform in general.

5) Carcinogenicity

While there were ~2-3x more cases of tumors in the mipomersen-treated population compared to control, I agree with the reviewers that they are not the basis for concluding that mipomersen increases the risk of developing cancer.  This is because of the nature of the reported cases and the relatively short treatment duration after which many of them occurred.

However, what would worry me more is that in the preclinical carcinogenicity studies in rodents (mice and rats), mipomersen clearly increased cancer risk- despite ISIS’ claim that they have been ‘clean’.  Among the findings were hepatocellular adenoma and subcutaneous tumors.  Having a report by your CRO stating the findings are likely species-specific issues and not applicable to humans, does not mean that the findings are not material in a regulatory sense, especially as they were made during a period at the FDA when the agency was much more risk-averse.  I expect the clinical and preclinical findings to cause carcinogenicity to be included in a REMS program.    

6) Kidney Damage

The liver, spleen, and kidneys are the major sites of phosphorothioate accumulations.  Consequently, it is not surprising that kidney damage has been an important safety concern of such antisense technology.  Although the clinical safety findings did not demonstrate that mipomersen impaired kidney function, the study drug did increase the amount of protein found in the urine (proteinuria).  This finding supports that kidney function remains a safety concern and such monitoring should be included in a REMS.

In summary, the safety findings were not all that surprising given what we know about phosphorothioate safety in animals and study discontinuations by competitor Santaris, very likely due to safety.  However, if you indeed have taken the reassurances by ISIS CEO Dr. Crooke literally, you may be justified in feeling misled.  Even on that count, however, I am not all that surprised, and his salesmanship may indeed be one of ISIS' great assets.  

Disclosure: The author is 'long' the stock ($ISIS).

Clarification: The term 'gymnotic delivery' in the linked paper refers to a specific protocol for optimizing gene knockdown in tissue culture in the absence of assisted delivery.  However, the term has been more broadly used by Santaris to refer to unassisted delivery in general (including clinical applications), obviously in an effort to express that in contrast to phosphorothioate oligonucleotides, RNAi needed assisted delivery.  I found it suspect, however, that they used a new term to refer to an over decade-old industry practice.  In a further clarification, I have not seen ISIS Pharmaceuticals adopt the term either. But clearly, not using (in most cases) assisted delivery has been a greatly exploited marketing tool of the antisense industry built on the back of RNAi Therapeutics.

Genzyme Taps RNAi Therapeutics for TTR Amyloidosis

Orphan disease gold miner Genzyme has just partnered Alnylam’s promising TTR amyloidosis drug candidate, giving it the right to commercialize resulting medicines in Japan and ‘other Asia-Pacific countries’.  In addition to a healthy $22.5M upfront, Alnylam stands to receive the customary development milestones and actually high royalties for a post-phase I program, plus Genzyme bears responsibility for the regulatory process in the licensed territories.

The basis for this deal, as also expressly stated in the press release, were the potent, ~90% knockdown efficacies obtained in the (single) dose-ranging ALN-TTR02 phase I study (for review, see 'Simply SNALP').  Critically, it was Tekmira’s SNALP delivery technology that made these results possible and catapulted Alnylam’s market cap by ~300M (50% increase in share price) at the time the phase I results were announced this summer.  I should add, however, that in addition to ALN-TTR02, the preclinical subcutaneously administered candidate ALN-TTRsc has been included in the deal. 

Clearly, if they are really serious about the competitiveness of the subcutaneously administered GalNAc-siRNA conjugate, Genzyme has got to be hoping that there won’t be a repeat of the mipomersen (antisense) injection site reaction fiasco which, in addition to the liver fat and immune stimulation issues, is endangering the approval for mipomersen even in the very high unmet medical need population of homozygous familial hypercholesterolemia.  In this case, the adverse event that could drastically lower the deal value soon after its close comes in the form of the Tekmira litigation risk (note: Genzyme is ISIS' partner on mipomersen and should know, also about the strength of the competing subQ ISIS-TTRRx program which is partnered with GSK).  

In case you are wondering what I am alluding to: less than a month after Genzyme invested more than $300M in ISIS and their hypercholesterolemia candidate mipomersen, the FDA issued a Partial Clinical Hold due to significant safety signals with the systemic phosphorothioate oligonucleotide, according to last week’s Briefing Documents for the mipomersen Advisory Committee meeting.   The risk in the TTR case, of course, is the pending litigation with Tekmira, involving the critical RNAi delivery technology enabling the ALN-TTR02 results, its manufacturing and other (e.g. 2’-O-methyl) IP associated with the TTR amyloidosis program.  You would expect that Genzyme would have at least waited for another month or so before closing the deal (trial date in November).  

I doubt that the deal value would have been much higher without the overhang given the size of the Asian TTR market.  But then, of course, nothing can surprise me here any more and a resolution to the Alnylam-Tekmira troubles may already have been hammered out.  A clue may be how Tekmira responds to the news.  If there is tonight a we-are-pleased-that-Genzyme-has-partnered-ALN-TTR02-for-which-we-provide-the-delivery-technology-PR, then it's probably nothing to get excited about.  But if there is silence, then maybe the real news may come with a slight delay.  

Talking of Tekmira, this company, as it is customary in biotech sub-licensing, is likely to receive a partial payment out of the $22.5M upfront (plus a cut of the future income stream related to ALN-TTR02).  Another partnership implication is that Alnylam has talked to Takeda, and Takeda declined on ALN-TTR.  As you remember, in 2008 Takeda forked over $150M to Alnylam, also for being the exclusive Asian partner for 5 years with a right of first refusal for Alnylam drug candidates in the Asian territories.   You’ve got to wonder how comfortable that conversation was, especially after handing over some of that for the ‘technology transfer’.  There might be even less room to hide from Genzyme, as I believe Genzyme and Alnylam may be sharing one building now.

Mipomersen Efficacy Surprises to the Upside, on Track to Become First Commercially Meaningful Antisense Therapeutic

ISIS Pharmaceuticals and co-development partner Genzyme reported today top-line data from the final 2 out of 4 phase III studies with the ApoB-targeting antisense compound mipomersen for the treatment of hypercholesterolemia. The efficacy results came in above my lowered expectations and support mipomersen to be an attractive treatment option for the many patients with severe hypercholesterolemia for which current care is still inadequate and who are therefore at a high risk of suffering cardiovascular events. Further studies, however, will be needed to better understand the clinical relevance of the observed liver enzyme and fat elevations.

As I wrote earlier this year, the first 2 phase III studies in patients with homozygous (25% LDL-cholesterol reductions) and heterozygous (28% LDLc reductions) familial hypercholesterolemia raised concerns that the efficacy of mipomersen could be less than one might have expected based on the initial phase I/II trial results. Couple this with a number of safety and tolerability issues such as elevated liver enzymes, fat accumulation, plus wide-spread injection site and flu-like reactions, the overall profile may not have looked that attractive. The 36-37% reductions in LDLc reported today for the severe hypercholesterolemic and high-risk/high-cholesterol patient populations, however, put efficacy concerns to rest, and it is possible that intact LDL-receptor function contributes to LDLc lowering, somewhat similar to statins.

Actually, due to the high drop-out rates in the latest studies (31-41% for those on drug), the LDLc reductions are likely to be quite a bit higher, at least on par or superior to LDL-apheresis which many of these patients are eligible for, but not widely used due to cost and safety/tolerability/patient convenience reasons. Moreover, the on-target efficacy, and not 2^nd gen antisense as a class, may indeed be responsible for some of the safety issues as the companies strongly suggest that the liver enzyme and fat elevations were in fact correlated with the speed and degree of the LDLc reductions. In some cases apparently more than 80% reductions in LDLc were achieved!

If this were the case, one can easily imagine that in real life, patients could be simply monitored for liver enzymes and fat content as they go on drug, similar to what is already routine for other widely used drugs such as warfarin. Although clearly something that regulatory agencies will want to see studied further (e.g. the ~200 persons that have received full 26-week course of drug may alone not be sufficient to argue against liver tox based on Hy’s Law), at this point it is actually not clear to what degree ApoB knockdown-related enzyme and fat elevations would be clinically relevant. The strategy of the companies to pursue a step-wise filing strategy starting with the highest risk patient populations (planned for early 2011) before seeking to expand the label is therefore very reasonable. For commercial success, the severe hypercholesterolemia population should be key and could already be part of the first filing cohort.

SNALP-ApoB in light of mipomersen data

Now a few words on how the mipomersen results may impact Tekmira’s RNAi Therapeutics candidate SNALP-ApoB which targets the same gene as mipomersen for the treatment of hypercholesterolemia. Assuming that liver enzyme and particularly fat elevations are indeed a function of ApoB knockdown, then some of the same strategies such as gradual dose adjustments may be applicable. In general, as the runner-up, Tekmira has a lot of valuable lessons to learn from mipomersen especially with regard to its regulatory path.

At the same time, to differentiate itself in the market, Tekmira may also want to take advantage of some of the challenges that mipomersen is encountering when it comes to drug tolerability, particularly the injection site reactions and flu-like symptoms that appear to be responsible for quite a few of the study drop-outs and where I believe that SNALP-ApoB could do better. Although I had never thought that being intravenously administered as opposed to the subcutaneous administration of mipomersen would be a major issue, competitive or otherwise, for the high-risk patient populations we are talking about, the fact that ISIS and Genzyme are now considering daily injections as an option to address the injection site reactions even makes intravenous infusion every 2-4 weeks look like a competitive advantage now.

Meanwhile, due to the satisfactory efficacy of mipomersen and the fact that you probably don’t want to overdo it with lowering ApoB as long as it is in the 32-40% range, efficacy should not be too much of a differentiating factor.

All of this is in no way to suggest that the current value of SNALP-ApoB is comparable to ISIS’ mipomersen. Tekmira has yet to enter the clinic with its improved SNALP-ApoB candidate and we all know that clinical development is fraught with surprises. In any case, it is quite satisfying to see oligonucleotide therapeutics progress in the clinic on so many fronts and I wish ISIS and Genzyme well for the commercialization of mipomersen as it would also reflect well on the commercial value of the entire space in general.

Brewing Genzyme Takeover Battle Highlights Value of High-Impact Drug Innovation

Orphan disease drug developer Genzyme had emerged as the drug development of the future by developing innovative drugs which have a high impact for diseases of major unmet medical need and then being rewarded for it with exceptional pricing power. Recent manufacturing problems, however, has led to the business model being forgotten over regulatory angst and activist shareholder actions. Sanofi-Aventis probably simply could not resist the depressed share price and was the first to blink, with others, like GSK, quickly moving in from the sidelines.

That high-impact innovation is a critical part of Pharma’s strategy in the face of its small molecule patent cliff freefall should be obvious. GSK, after announcing an orphan disease initiative last year, for example has entered into microRNA and antisense collaborations with Regulus, Santaris, and ISIS, and Sanofi-Aventis has just entered into relationships for microRNA therapeutics with Regulus and a quite significant one with Oxford Biomedica last year for the development of gene therapies for ocular indications (note: Genzyme is one of the more prominent gene therapy companies). Meanwhile, Pfizer and probably almost every other major pharmaceutical corporation are also building orphan disease capabilities.

I think the action around Genzyme illustrates how quickly investor sentiment towards a company or an entire industry like RNAi Therapeutics can change. It is not that Big Pharma can delay their future planning forever, and should an opportune situation arise they are likely to act quickly.

What I find curious about Genzyme though is that they are really platform agnostic, and I believe that caused some pipeline problems and contributed to Genzyme’s weak stock market performance in recent years after some of the low-hanging fruits had been picked.

Of course, this, as illustrated by ‘Genzyme-like’ opportunities like Alnylam’s ALN-TTR, is where the big opportunity is for RNAi Therapeutics. As treatments become individualized down to the gene level, the druggable genome size and and platform efficiency become major issues. In fact, going after Genzyme may actually be a mistake stemming from Big Pharma’s age-old temptation to pay top dollars for growing top-line revenues. Big Pharma does not need (orphan) drug development expertise, which is where it can well compete with biotech companies anyway, but innovative platforms to complement such expertise.

In any case, this should lift the entire biotech sector, and a similar spark, possibly with a Swiss flavor, may soon ignite RNAi Therapeutics.

For Mipomersen, 10% a Big Difference Does Make

I must admit that I have been very wrong about how clinical results from the ApoB-lowering drug candidates by Tekmira (ApoB-SNALP RNAi, phase I) and ISIS Pharmaceuticals (mipomersen antisense, phase III heterozygous FH) would turn around the sentiment for RNA Therapeutics. In both cases, investors sold off the stocks on results that I believe bring both approaches closer to commercialization. It is almost as if the market is one in which home-run clinical results get rewarded with a doubling in share price, while those in-line with expectations are sold off by about 20%.

Compounding the problem for mipomersen is that investors were secretly hoping for slightly better LDL-cholesterol reductions. This was particularly the case because the modest 25% reduction observed in the previous homozygous FH trial had always been down-played by management as being attributable to a challenging patient population, and that we should expect much more from the subsequent phase III trials. Well, technically, the reduction was slightly improved, but with 28% not too much to get anybody excited.

While analysts were largely focused on potential safety problems, particularly questions about the seriousness of observed liver enzyme elevations, I believe that this attention was very much caused by the disappointment about the degree of knockdown. This is because in order for mipomersen to become a commercially successful drug, it needs to tap the market outside the ultra-orphan homozygous FH population, especially the severe hypercholesterolemic patient population that does not respond sufficiently to current maximal drug therapy and are either on LDL apheresis or eligible for it. Tapping this market or not can make all the difference, the difference between $10M and $500M-$1B in annual sales.

The reason why the LDL apheresis population is so attractive is because mipomersen would aim to replace another procedure that specifically aims at lowering LDL-cholesterol, and demonstrating a comparable knockdown should be sufficient to get approval without time-consuming and costly outcome studies. It could also lead to adoption of mipomersen by some of the other high-risk populations, but this would only be gravy.

LDL apheresis is somewhat unpleasant and, depending on the particular apheresis technique applied, removes good stuff like coagulation factors and HDL cholesterol, too. It does, however, do a fairly good job in removing LDL-cholesterol, by about 30-55%, and in order for mipomersen to be considered an alternative, it needs to get into that range. At the moment, mipomersen is on the lower end of this spectrum where safety could tip the balance, and with lots of questions regarding the safety being left unanswered, this can explain the sell-off we have witnessed.

On a positive note, the 28% LDL-cholesterol reduction may be a very conservative number. This is because it does not take into account the +5% increase in the control group and the fact that the number was on an intent-to-treat basis, i.e. they included also those patients in the drug-treated group that dropped out early, so that the adjusted number could well be in the -36% range. Moreover, the natural person-to-person variation could mean that about half of those that stayed on the drug achieved very meaningful LDL reductions which could prove crucial during the regulatory application process. The roll-over rate into the open-label, uncontrolled phase of the study was also said to be ‘good’ and would be quite meaningful as this provides a good measure about the adoption of mipomersen in real life. However, given a slight tendency by ISIS to over-promise, we really have to await the precise numbers that are to be presented at an upcoming scientific conference.

In summary, the heterozygous FH results were very likely not as bad as the market reaction would suggest and eyes are now on the full data presentation and, probably even more importantly, results from the phase III study in the critical severe hypercholesterolemic patient population. The reaction highlights, however, that slight differences in knockdown potencies can make a huge difference for RNA Therapeutics. The upcoming dose-fractionation study by ISIS and Genzyme, while labeled as being for the ‘convenience’ of patients, may actually be driven by the hope it might provide for improved knockdown due to different pharmacology. And finally, for RNAi Therapeutics, and Tekmira in particular, the good news is that the pioneering work by ISIS provides them with a very good idea of what their ApoB candidates will have to achieve in order to be commercially successful. A modest 35-40% knockdown should be well within the grasp of current SNALP-siRNA delivery technology.

More Breaking News: ISIS and Genzyme in Heart Attack Biotech Deal

Dwarfing Tacere’s Pfizer collaboration announced earlier today, ISIS disclosed after the close of the markets Genzyme to be their long-expected partner for mipomersen, an antisense compound targeting ApoB100 for lowering bad cholesterol. Mipomersen is currently in phase III clinical development for the small, but high-risk group of people with familial hypercholesterolemia. Similar studies are planned to apply mipomersen for the statin-refractory general population. Pre-clinical data so far have shown the drug to be safe and surprisingly well tolerated.

The blockbuster deal, including a $175M upfront license payment plus $150M at a 103% premium to today’s closing price and more significant milestone and profit-sharing opportunities downstream, is another validation of how highly innovative RNA-targeting therapies are being valued. Genzyme appears to be the ideal partner for ISIS in that it has demonstrated an amazing ability to target relatively small patient populations for genetic disorders, such as familial hypercholesterolemia, yet be extraordinarily profitable. ISIS on the other hand is opting for an IP licensing model whereby it develops a series of antisense compounds to certain value inflection points to then partner them, in addition to receiving significant royalties on licensed IP from a wide range of RNA technology companies, including Alnylam. More antisense drugs for liver indications are in development, including a phase I HCV drug licensed by Merck [note corrigendum below].

Today’s announcement will focus the attention to the entire field of RNA-based therapeutics, including RNAi. The markets are likely to react very positively to the news, and Alnylam’s plans of two more significant platform licensing deals will sound a lot more real with this new development.

PS: It seems odd that today's announcement was preceded by a dramatic, over 15% drop in ISIS shares at the opening of the session. It is likely that "shorts" familiar with the matter pushed the stock down to create panic selling to create volume for covering their positions. Unfortunately, this may have achieved its purpose and some honest investors will have been stopped out by this action.

Corrigendum (15 January, 2008): A reader correctly noted that the Merck HCV drug mentioned in this blog is a nucleoside polymerase inhibitor, not an antisense compound which I assumed based on its origin in a Merck-ISIS collaboration. This, however, further illustrates ISIS' considerable leverage in nucleotide-based drug development.