The Regulus IPO: A Reason to Invest in MicroRNA Therapeutics

Many of you will already have seen it: With little fanfare, Regulus Therapeutics (ticker: RGLS) is now a publicly traded company.  Rather than re-hashing the financials of the IPO and whether the first (depending on whether you count Rosetta Genomics in) public exit was good for the microRNA Therapeutics sector or not, I want to remind readers of one key selling point of the technology, one that I believe explains why Regulus has been so successful in  generating partnership revenues from the likes of Sanofi-Aventis, GSK, and AstraZeneca: microRNAs are a major class of genes and their products can only be targeted by oligonucleotide approaches.

Big Pharma companies are a conservative bunch and small molecules habits die hard.  While the industry has embraced monoclonal antibodies with all their benefits, but also warts, oligonucleotide therapeutics are still considered outcasts in the industry.  Maybe a therapeutic area group in Big Pharma will take a look at it when nothing else seems to work (hello respiratory disease groups).   While this could change given therapeutic (and vaccine) oligonucleotide candidates in TTR amyloidosis (Alnylam and ISIS/GSK), HBV (Dynavax), and hypercholesterolemia (mipomersen/ISIS) and the excitement around the exon-skipping drug candidates from Prosensa and Sarepta, the precise timing of a lasting turnaround in sentiment would probably depend on whether and when sales of any of these potential products really take off.  Money does not smell to Big Pharma either.  But until then, it's likely to continue being a roller-coaster ride.

Despite falling in the oligonucleotide therapeutics category and despite being younger and technically less validated, microRNA Therapeutics have an important marketing advantage over RNAi and RNaseH antisense.  Unlike RNAi and RNaseH which often have to hide in the ‘undruggable’ space, i.e. in addition to the desperate research groups they may be considered by Big Pharma if small molecules and monoclonal antibodies cannot address a biologically attractive target, microRNA Therapeutics do not stand in such direct competition.  Biologically too important to ignore and implicated in many diseases, oligonucleotides, at least for the foreseeable future, are what it takes to tap this critical group of genes.  

Because of that, I expect industry interest (= partnership $$$) in microRNA Therapeutics, and as a leading company in that area, in Regulus Therapeutics, to be less volatile than what has been the case for its two older siblings.  Having a strong balance sheet, should also help in that regard.  So welcome, Little Emperor, to the public markets.

As MicroRNAs Make First Clinical Impact, Janssen Prize 2012 Awarded for Their Discovery

20 years ago, Gary Ruvkun and Victor Ambros made the startling discovery that a tiny noncoding RNA, lin-4, could be a key regulator of C. elegans development by downregulating messenger RNAs through Watson-Crick base-pairing.  What for a number of years seemed like an oddity of worm biology has become the first example for a whole new fundamental class of biological molecules, rivaling in importance messenger RNAs: essentially every biological pathway is regulated by a microRNA.     

Not only have microRNAs fundamentally re-shaped our thinking about molecular biology, they have also made quick inroads into the clinic.  Even before RNAi Therapeutics, microRNA-based diagnostics are already making a clinical impact today.  Half a dozen such tests have been commercially launched.  The currently arguably medically most impactful among them, mirViewMets(2) for the diagnosis of Cancers of Unknown Primary by Rosetta Genomics received Medicare coverage in May of this year.  This in the diagnostics is tantamount to the regulatory approval of a drug candidate in the therapeutics space.

On the microRNA therapeutics front, the miR-122 inhibitor by Santaris for the treatment of HCV infection is the most advanced.  Studies with this antisense inhibitor have yielded intriguingclinical data, including the suppression of viral loads to undetectable levels. A number of other miRNA drug candidates are in late preclinical development.

Considering the general biological importance of microRNAs and their rapid translation into the clinic, it is not all that surprising that Gary Ruvkun and Victor Ambros were recognized with the 2012 Dr. Paul Janssen Award for Biomedical Research.  This prize is one of the premier accolades in biomedical research for inspirational scientists that have undertaken ground-breaking science with great medical impact.  Surely, the discovery of microRNAs and their discoverers fit that bill.  Without lessening the importance of the prize and the contributions of corporate sponsor J&J, many of these prizewinners will go on to win the Nobel Prize.  I fully expect Ambros and Ruvkun to do so, too.

Daring Resesarch on the Cutting Edge

One cannot overestimate the scientific accomplishment of the work by Ambros and Ruvkun.  At the time, the notion of small RNAs as genetic regulators was simply unheard of.  It was thus the accomplishment of the Ambros group to embrace the possibility that their odd genetic mapping results during a worm developmental timing project pointed towards such a class of molecules. 

The lab-books around the world are littered with curious findings that never get followed up on because we think that they are likely caused by some experimental artifact and we would no get anything else done if we chased after each of them.  And even when the evidence is so clear before your eyes (e.g. that band in the low molecular weight range), the conditioned eye will simply ignore it.  In this case, the initial disbelief was only overcome by sequencing and re-sequencing before Ambros and colleagues had to finally accept that the mutation was indeed in a region without a proper open-reading frame (= protein).  Moreover, the recognition that a small RNA was the molecule affected by the mutation required that RNAs of all sizes were considered despite the fact that at the time small RNAs were not meant to be captured by the laboratory gels.  And when they accidentally were, such small RNAs surely were artefactual junk.

Discovering microRNAs as a whole new class of key genetic regulators was just one accomplishment.  Another one was deciphering their mechanism of action.  As long-time fellow researchers of worm development, Ruvkun and Ambros were familiar with the genetic interactions of the lin-4 mutant.  One gene in particular, protein-coding gene lin-14 appeared to be suppressed by lin-4.  A deletion mutant in the 3’ UTR of lin-14 found by the Ruvkun group abolished this genetic interaction.  Noticing that there was sequence complementarity between lin-4 and the missing lin-14 3' UTR fragment, it dawned upon the two scientists almost in unison that lin-4 must be interacting with lin-14 through Watson-Crick base-pairing, thereby silencing it post-transcriptionally.

Award Symposium in New York

If you want to learn more about the discovery of microRNAs, their biology and medical importance, and also meet the scientists, you can register for the Dr. Paul Janssen Award Symposium to be held on September 7, 2012 at the New York Academy of Sciences.  It will be a great opportunity for both academic scientists and the biotech crowd to leave the lab bench and trading desks behind them for a few hours and reflect on the importance of basic research, in model organisms as seemingly obscure as the worm, for advancing medicine.

The RNAi Therapeutics Blog is a proud promotional partner of the Symposium.

Peter Linsley Leaves Merck to Become Chief Scientific Officer of Regulus Therapeutics

When the Regulus CEO, during Alnylam’s quarterly conference call last week, expressed his satisfaction about their ability to attract top talent to the microRNA therapeutics start-up, Peter Linsley, who it was announced today that he would become the CSO of Regulus, must have been foremost on his mind.

Peter Linsley is the perfect CSO of Regulus in many respects. His group at Merck’s bioinformatics subsidiary Rosetta Inpharmatics was the one who seemed to abruptly end dreams of a perfectly on-target RNAi Therapeutics platform when they revealed in a 2003 paper widespread off-targeting by standard siRNAs using expression profiling (Jackson et al. 2003 “Expression profiling reveals off-target gene regulation by RNAi”). After extensive follow-up work by his group and others, we now know that much of this off-targeting is related to unmodified siRNAs being able to recognize targets based on limited base-pair complementarity in a manner essentially identical to how microRNAs recognize their targets. As such, he will bring with him to Regulus the knowledge and tools needed to predict and characterize the consequences of mimicking and inhibiting microRNAs that Regulus aims to exploit therapeutically. In addition to his bioinformatics background and experience with high-throughput technologies, he has acquired extensive knowledge on the biology of microRNAs through numerous co-authored publications.

Linsley’s know-how may also benefit the parent companies, particularly Alnylam, since his work also involved applying strategies to minimize the microRNA-like behavior of siRNAs, such as by modifying them, so that their activity would be largely limited to targets with perfect complementarity (Jackson et al. 2006 “Position-specific chemical modification of siRNAs reduces “off-target” transcript silencing.”), therefore rendering siRNA therapeutics potentially safer. He should also bring with him expertise in identifying transcript profiles following microRNA and siRNA delivery that either indicate therapeutic promise or, even more importantly, potential harm.

Linsley’s decision to leave Merck further highlights the difficulty of Big Pharma in retaining top talent after acquiring biotech companies, particularly due to a bureaucracy that appears to be so pervasive in today’s Big Pharma and is at risk of choking innovation. Rosetta Inpharmatics and Sirna Therapeutics were part of Merck’s strategy of becoming a powerhouse in RNA therapeutics by combining leading expertise in gene regulatory networks/systems biology with oligonucleotide technologies. It now seems that much of the human capital that made these companies so attractive in the first place have left, and this, together with Alnylam’s decision last fall to terminate their RNAi Therapeutics alliance with Merck, is likely to add to the criticism that Merck overpaid for and mismanaged their acquisitions and is now at risk of losing their leadership position by insisting on going it alone.

This contrasts with Roche’s decision to let Alnylam’s former European subsidiary to operate as a semi-independent “Center of Excellence”, and is echoed by the intention of Pfizer and other Big Pharma and mature biotechs to establish similar center of innovations separate from headquarters. Of course, it is Roche’s success story with Genentech that serves as an example for these attempts.

The most remarkable aspect of today’s announcement to me, however, is the fact that Linsley personifies that by embracing complexity, what has started as a worrisome discovery 5 years ago has now turned into a therapeutic opportunity- the microRNA therapeutics opportunity.

Journal Club: A commonly used treatment for HCV, Interferon Beta, may largely act through microRNAs

While on vacation, an interesting study on the effect of interferon beta on microRNA levels was published in the journal Nature (Pedersen et al.: Interferon modulation of cellular microRNAs as an antiviral mechanism. Nature doi:10.1038/nature06205).

In this study, Pedersen and colleagues were initially interested in whether interferons had the potential to modulate cellular microRNA levels. Not very surprisingly, this potent class of cytokines up- and downregulated a number of microRNAs. Strikingly, however, eight of the interferon beta-induced microRNAs had microRNA seed complementarities with an HCV genome. Moreover, miR-122, a microRNA that has now been shown by a number of laboratories now to facilitate HCV replication, was downregulated by interferon beta.

The link between HCV and interferon-regulated microRNAs is intriguing, since interferon beta is at the center of current HCV treatment regimens. In order to test whether the antiviral activity of interferon beta on HCV replication was indeed mediated by microRNA regulation, the authors asked whether interferon beta could still inhibit HCV replication in the presence of mimics of the upregulated and HCV matching microRNAs and an inhibitor of miR-122. In agreement with the notion that interferon-regulated microRNAs mediate a large part of interferon beta inhibition of HCV, such a mixture of small RNAs alleviated interferon beta inhibition of HCV replication from 90% to around 50% of untreated control in a tissue culture system.

HCV has a long-standing tradition in the RNAi Therapeutics field. As such, a number of drug candidates are expected to enter the clinic in the near future that directly target the HCV genome by RNAi. In addition, since HCV replication is supported by miR-122, it has become the focus of the first wave of microRNA-targeting therapeutic programs. Due to the ability of viruses to escape drug inhibition through mutation, a combination of these approaches appears promising. As much as no other current HCV antiviral alone can reliably get rid of HCV altogether, I do not expect any RNAi-related stand-alone therapy for HCV to be successful. However, when combined with potent agents such as Vertex Pharmaceutical’s late-stage protease inhibitor VX-950, RNAi may be able to further knock down HCV sufficiently so that it can be entirely cleared by the body. Moreover, many patients do not complete interferon therapy due to its severe side-effect profile, and alternatives are desirable. The strategy proposed in the paper may therefore lead to a treatment that works through the same antiviral pathway as interferon beta, but without the side-effects.

Lastly, I would like to briefly comment on the evolutionary aspects of the studies. It is very unlikely, given the rapid evolution of viruses alone, that the sequence of the implicated microRNAs was shaped due to selection based on HCV inhibition. Accordingly, the authors find that the sites complementary to the microRNA seeds are not all conserved in the different HCV genotypes (note: whether this is related to the varying efficacy of interferon beta on different genotypes in the clinic was not discussed). It is only through comparing the modulated microRNAs with a lot of viruses that they found the link with HCV. It is therefore fortuitous that interferon-modulated microRNAs should have anti-HCV activities. Of note, this is similar to a paper published 2 years ago in the journal Science (Lecellier et al.: A cellular microRNA mediates antiviral defense in human cells. Science 308: 557) which showed for the first time that a cellular microRNA may restrict the replication of a mammalian virus through good fortune.

Has Rosetta Found the Cornerstone to Corporate Success?

Last week’s formation of Regulus Therapeutics should give a boost to the whole field of microRNA-based therapeutics as it lends credibility to microRNAs as a new drug development and diagnostics platform. Part of this boost should come in the form of funding from larger pharmaceutical and diagnostics entities for companies with a credible and well-developed microRNA IP estate.

I would therefore like to take a closer look now at Rosetta Genomics, next to Regulus arguably the only other major pure-play microRNA-focussed company. Rosetta has pleasantly surprised me by assembling a strong IP portfolio, which it has then followed up with a series of well-designed corporate and academic partnerships. This is complemented by a growing tool-box allowing for clinically-relevant extraction, detection and measurement of microRNAs. Like other players in this field, Rosetta believes that given the emerging importance of microRNAs in gene regulation, these molecules would also be involved in human disease so that they could be both harnessed for clinical diagnostics and therapeutics.

Rosetta is an Israel-based company, founded on the discovery and patenting of human microRNAs using high-throughput computing and bio-technologies (2005 Nature Genetics study). In the wake of the Human Genome and other sequencing projects, the founders of Rosetta hypothesised that the key to human complexity was not due to an increased number of genes, but at least partly due to the emergence of primate- and even human-specific microRNAs, and their search for new microRNAs consequently accommodated that notion. This was against the mainstream of most microRNA discovery efforts then which heavily relied on the notion of biological conservation, and Rosetta would be able to detect a number of microRNAs that had been missed.

Indeed, their hypothesis was supported by their 2005 Nature Genetics paper, almost doubling the number of sequenced human microRNAs at that time (adding 89 microRNAs), a number of them not conserved beyond primates. Based on partly theoretical considerations, predictions as to the total number of microRNAs were also revised upwards from initial estimates in the field of around 250 to well over 800. These efforts have resulted in patent applications exceeding 500,000 pages, probably using the same computing power used for predicting microRNAs.

I should add, however, that most of these non-conserved microRNAs were restricted to 2 clusters in the genome and should therefore be of less diagnostic value as would be expected for an equal number of more randomly distributed microRNAs. Furthermore, most of the previously cloned microRNA, particularly those by Thomas Tuschl, licensed exclusively for therapeutics use to the parent companies of Regulus, Alnylam and ISIS, should be amongst the biologically most important microRNAs simply based on their higher expression levels (the reason why they were detected by cloning in the first place).

At that point, I thought just another publication based on bioinformatics that was showing that the complexity of microRNAs may be higher than initially thought. Also, their theoretical approach and computer-driven technologies made me wonder whether this would ever develop into a meaningful hands-on biotechnology operation.

Rosetta took a number of steps to change this perception. First, it has gained access, at least for diagnostic use, to the large majority of human microRNAs through licensing agreements, most importantly with the Max-Planck Institutes and Rockefeller. Next, similar to what Alnylam has done, they have come out with a number of high-quality, peer-reviewed publications, ranging from microRNA detection technologies to the functional elucidation of certain disease-associated microRNAs. Partly, this was done through academic collaborations which allows them to stay product focussed and capitalise on opportunities should they arise from discoveries in microRNA research. Other collaborations with corporate and clinical partners have given them access to relevant technologies such as one with ISIS for the therapeutic targeting of microRNAs using antisense technology, and clinical specimens from hospitals which will be used to test their diagnostics.

How they were able to orchestrate this transformation is not clear to me and quite impressive, but looking at the line-up of illustrious early investors and SAB (scientific advisory board), populated with Nobel Laureates and the likes of Robert Langer (also on Alnylam’s SAB), suggests that they have enough influence to get the attention of key audiences. The expansion of their activities in the US should further nurture current and future partnerships and attract new investors.

These investors may be attracted by Rosetta’s first issuances of microRNA patents and its strategy to use early revenues from their more mature microRNA diagnostics efforts to fund the potentially more lucrative area of microRNA-based therapeutics on quite attractive financial terms. It is their aggressive goal to have 3 microRNA diagnostics products on the markets by the end of next year, with their most advanced program being for the classification of Cancer of Unknown Primary (CUP) where the goal is to identify the original tissue from which a cancer has spread. A recent presentation at the AACR cancer meeting suggests that this can be achieved with 85% accuracy by profiling 19 microRNAs. Their initial therapeutic pipeline, meanwhile, focuses, similar to Regulus, on diseases of the liver, such as liver cancer and HCV infection. This is done in collaboration with ISIS Pharmaceuticals, and it will be interesting to see how the recent formation of Regulus will affect this relationship.

After a difficult IPO and little attention from Wall Street, the time is ripe for Rosetta and Regulus to lead the charge in translating the important biology of microRNAs into medical use.