Follow the Court Proceedings of the Tuschl Tussle

The ‘RNAi Litigation Blog’ is a service by John Leavitt and his colleagues Doug Naab and Scott Lloyd from the technology Research and Advisory firm Nerac that provides a great deal of background information on the Tuschl case and real-time summaries and insights of the court proceedings. As you will remember, this case touches on the ownership of the fundamental Tuschl I and II RNAi trigger patents and of which the outcome could decide what kind of economics Alnylam will be able to extract from its IP and what type of workaround strategies Alnylam’s competition will have to adopt (primers on the Tuschl Tussle and the potential fallout can be found here and here).

The most recent entry on the RNAi Litigation blog was on a hearing held on April 12 about Whitehead’s and UMass’ (the defendants) motion to dismiss the plaintiffs’ (Max Planck and Alnylam) First Amended Complaint. A lot of the hearing seem to have concerned Zamore’s assignment of his rights to the Tuschl I invention to UMass which the plaintiffs strongly feel Whitehead was contractually obligated not to have allowed. After all, it is UMass’ involvement in all of this which makes this case so important because UMass then decided to go it alone and essentially licensed all of the Tuschls most importantly to Sirna Therapeutics (now Merck). This could very well substantially deprive Alnylam of the economic benefits of its, what it believed to be exclusive rights to Tuschl II. To me, it actually seems quite fantastic how UMass believes that the one month that Zamore worked at UMass until the first filing of Tuschl I would now entitle them to the entire Tuschl inventions. Should the plaintiffs prevail in the assignment question alone, then much of the risk to Alnylam’s future business dealings would be taken off the table, unless of course events would escalate in such a way that both the Tuschl patents explode because the USPTO declared the patents invalid because of mishandling of inventorship. The defendants first line of defense is to claim statute of limitations on the assignment question to which the plaintiffs responded that they only became aware of the fact that Whitehead allegedly deceived them in their recent discovery and that they were first damaged in 2007 as Tuschl II ran into problems at the USPTO because of the way Whitehead prosecuted it.

There was an awkward moment in the hearing when the judge asked why Sirna/Merck was not part of the case as it appears that overlooking for a moment the few million in royalties that UMass may enjoy, it is Merck that stands to lose their $1B investment should they end up with a therapeutically useless Tuschl I. It appears, however, that UMass will have to bear the brunt instead because it apparently told Sirna/Merck that they were able to provide access to the inventions described in both the Tuschl patents. Maybe not surprisingly, Merck (‘outside pressures’) also appears to be the reason why attempts to settle this case have failed miserably.

The next important milestone in the case seems to be which counts will eventually be admitted. Unfortunately, it seems as if the judge is not keen at all to delve into the technical details of the case and would rather let the USPTO agonize over it. I am afraid, however, that in order to understand and solve any of the counts at hand, she would eventually have to refresh her high-school biology...

Well, instead of my second-hand account, why not bookmark and visit the 'RNAi Litigation Blog' here directly.

A Tumultuous Week for RNAi Therapeutics Companies

Credit worries, earnings calls, a new significant biodefense contract, and flu RNAi news all combined to produce a highly volatile week for RNAi Therapeutics companies, both financially and scientifically.

It all started with Nastech’s announcement on Monday morning of a Friday webinar to discuss their flu RNAi development strategy. Coupled with hedge fund troubles, margin calls and short covering, this created the perfect scenario for an impressive run-up of more than 35% run-up in Nastech’s share price at the close on Thursday. In my last blog, I cautioned, however, that the press release accompanying Nastech’s earnings call on Wednesday contained a mere reference to positive in vitro data on flu RNAi, something that had already been demonstrated by various groups before.

Flu RNAi then received some more attention on Thursday when Alnylam announced that their flu RNAi program, in collaboration with Novartis, would be delayed due to in vivo efficacy and safety issues. An IND that had been scheduled to be filed by the end of this year will now be postponed until at least 2008. Apparently, Alnylam’s own data and data from the literature suggest difficulties in obtaining sequence-specific viral knockdown with current flu animal models. This does not come totally unexpected since there has been discussion in the field on the merits of purposefully combining the innate immune responses elicited by some, particularly liposomally formulated unmodified siRNAs with the sequence-specific inhibition of viruses such as HCV, RSV, and flu.

While I fully agree with Alnylam’s decision to ensure the highest quality and safety of their pipeline at an early stage, it would be interesting to know the exact nature of the siRNAs in question (modified or unmodified), delivery methods used (formulated or naked), and the types of animal models that were used. This is particularly relevant given that the company’s most advanced clinical program for RSV targets another virus of the respiratory tract. It should be kept in mind, however, that safe and potent pre-clinical RNAi efficacy has been demonstrated for RSV. Moreover, we should not be surprised to see such differences since although both viruses infect similar tissues, the exact biological distribution and viral kinetics may significantly differ between any two viruses.

The in vivo efficacy/safety issues were compounded by the reduced support from the US government for novel treatments in preparation of a pandemic avian flu. While federal support for RNAi addressing public health threats continues to benefit the development of the RNAi Therapeutics platform in general, this demonstrates once again that due to changing political climates, the government cannot be relied upon for direct commercial benefit. However, political interest in preparing for a possible avian flu pandemic is particularly strong in some of the emerging economies in Asia, particularly China, and only yesterday a study by a Chinese group was published in an advance online article of the journal “Antiviral Research” on the in vitro and in vivo efficacy of RNAi for H5N1 (Zhou et al.: “Effective small interfering RNAs targeting matrix and nucleocapsid protein gene inhibit influenza A virus replication in cells and mice.”)

Ironically, on the same day that the delay was announced, Alnylam reported that it had been awarded another significant US government contract of $38.6M over 33 months for the development of RNAi antivirals for the treatment of hemorrhagic fever viruses. Currently, there is no effective treatment for these viruses which are perceived as a threat to national security. RNAi meanwhile has proven to be the most promising treatment in animal models so far.

This announcement on Thursday seemed to have further stoked the fantasies in Nastech shares and the whole sector which recorded significant gains in the face of a big drop in the major indexes. However, expectations were somewhat disappointed by the Nastech webinar on Friday morning which failed to uncover major breakthroughs in flu RNAi. Also, an analyst question related to sequence-specific in vivo knockdown was not directly addressed. While I certainly appreciate the educational aspect of this webinar, it left me, and probably others, scratching my head why this company went out of its way to present these data at 5am Pacific Time as if market-sensitive data were about to be disclosed. Nastech shares gave up almost 8% that day.

Here are some more interesting bits and pieces from this busy week:

1) ISIS stated that no fatty liver (steatosis) was observed in pre-clinical animal models with their apoB100 antisense compound. This should be reassuring news for ISIS’ lead compound given the concern raised by other reports of fatty liver in mice following apoB100 knockdown.

2) Alnylam’s phase II RSV studies for naturally infected patients was postponed to the first half of 2008 after phase II experimental infection data are available. These are expected by the end of this year. This certainly makes a lot of scientific sense and illustrates Alnylam’s scientific data-driven flexible pipeline management approach.

3) On the patent front, Alnylam announced the issuance of Kreutzer-Limmer I in Canada, and Tuschl I in Australia. Given the complexity in the ownership of this particular patent, especially with regard to CytRx and the University of Massachusetts, I wonder why the Press Release failed to mention UMass as a licensor for Tuschl I to Alnylam while acknowledging Max Planck Innovation Gmbh, the MIT, and the Whitehead Institute for Biomedical Research.

4) Alnylam management states continued interest by Big Pharma and biotech for a piece of the RNAi platform. More significant deals are possible, if not certain. Also, Novartis is more likely than not to exercise its adoption license for Alnylam’s IP. Such deals should strengthen the company’s balance sheet beyond their guidance of over $435M in cash at the end of this year.

What a week!

RNAi Therapeutics IP: On the Importance of Being Tuschl

A strong patent position is essential for companies to attract investments for the development of RNAi Therapeutics. Although the number of patents and patent applications surrounding RNAi Therapeutics continues to grow, arguably the two or three key early patents are 1) Fire and Mello describing the discovery and use of long double-stranded RNAs for inducing RNAi-mediated gene knockdown in worms and by extension other organisms, and 2) the Tuschl I and II patent series describing the identification of small 21-23nt small RNAs as the mediators of RNAi (Tuschl I) and the use and properties of synthetic siRNA duplexes for RNAi in human cells (Tuschl II).

While Fire and Mello has been granted in the US and can be licensed by almost anyone that wants it, there is much more controversy surrounding Tuschl I and II. It is undisputed that scientifically Tuschl’s studies describing the use of synthetic siRNAs for RNAi in mammalian cells is what opened up the prospect for RNAi to become the next platform for drug development. Tuschl II which is based on the work by Tuschl, Elbashir, and Lendeckel and owned by the Max-Planck Institute in Germany has been exclusively licensed to Alnylam Pharmaceuticals and has already been granted in the US and some other territories (Tuschl is a scientific co-founder of Alnylam). The patent application was provisionally filed in the US on March 30, 2001, and in Europe on December 1, 2000, and describes in great detail the anatomy of effective synthetic siRNAs.

Meanwhile, much of the work in Tuschl I is focussed on the identification of small RNAs as the mediators of RNAi based on the fact that isolated small RNAs derived from processed double-stranded RNAs in Drosophila cell extracts trigger specific gene knockdown and cleavage of a target message at 21-23nt intervals. Interestingly, most of that work does not mention the fact that these 21-23nt small RNAs should be double-stranded. This conclusion could not be derived from the observation of 21-23nt small RNAs on denaturing polyacrylamide gels, but was deduced through the cloning of these small RNAs which is described in Tuschl II, not I. It is therefore very surprising that, out of the blue, Tuschl I demonstrates the use of synthetic siRNAs with preferably 2-nucleotide overhangs for RNAi in mammalian cells. Subsequent claims then focus on the use of such siRNAs for human therapeutic development. This is rather surprising given that the basis for choosing 2-nucleotide synthetic siRNAs is lacking. It therefore appears as if this example had been appended later so as to make the patent more relevant for human therapeutic use. Otherwise, only fruit fly work, albeit important, would have been described. Given the near-identity of this last claim of Tuschl I with work described in Tuschl II, it is difficult to imagine how Tuschl I could be granted in full in the presence of Tuschl II.

Similarly intriguing is the fact that Tuschl I, which by the way has not issued yet, is co-owned by the Whitehead Institute for Biomedical Research in Cambridge, MA, the MIT, the University of Massachussetts, Worcester, and the Max-Planck Institute. At the same time, from the publication record it is clear that synthetic siRNAs were pioneered by Tuschl, Elbashir, and Lendeckel while at the Max-Planck Institute. Interestingly, the UMass has chosen to co-exlusively license their rights to the patent to Sirna Therapeutics (now a Merck subsidiary), CytRX (now RXi), in addition to Alnylam. Clearly, Merck and RXi would benefit most if Tuschl I would be granted eventually and somewhat limit the dominance that Alnylam currently enjoys in the RNAi patent space. Nevertheless, the fact that Tuschl I, filed on the very same December 1, 2000 date as Tuschl II in Europe, has not issued yet and the sudden appearance of synthetic siRNAs and their use in human cells at the very end of that patent application, raises questions about conflicting interests between the involved parties.

Based on publicly available information, the claims of the Tuschl patent series could therefore be divided as follows: Tuschl I getting credit for identifying 21-23nt small RNAs for mediating RNAi in fruit flies and by extension in other organisms, and Tuschl II for characterising effective siRNAs to be double-stranded with preferably 2-nucleotide 3’ overhangs and the ability of synthetic versions thereof to mediate RNAi in mammalian cells. In such a scenario Tuschl II would carry considerably more weight for the development of RNAi Therapeutics which would in turn reinforce Alnylam’s already leading IP position.

I am aware that parts of my interpretation are based on conjecture and criticisms are welcome (email: dirk_haussecker@yahoo.com). For those interested in the patents themselves, please visit

Tuschl I: http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=1&f=G&l=50&co1=AND&d=PG01&s1=tuschl.IN.&s2=zamore.IN.&OS=IN/tuschl+AND+IN/zamore&RS=IN/tuschl+AND+IN/zamore

Tuschl II: http://www.google.com/patents?id=BlV6AAAAEBAJ&dq=rna+sequence+specific+mediators+of+rna+interference