From Platform to Products to Platform

Following a number of clinical proof-of-concepts with various RNAi Therapeutics candidates, investors have started to once again not just value RNAi Therapeutics companies for their lead candidates alone, but also their platform technologies.  Recent analyst notes, the $60M fund raisings each by Arrowhead Research and Dicerna, and the pipeline development conference call by Tekmira all support this conclusion.

This is a major change in the perception of the industry from just 2 years ago when it was left for dead by most.  The timely clinical validation of RNAi Therapeutics activity was the last straw left.  To their credit, Alnylam, with the crucial help of Tekmira’s SNALP delivery technology, managed the last-minute turnaround.  At the same time and in the absence of prospects for Roche-type platform deals, RNAi bellwether Alnylam emphasized its transition from platform to product company.

In addition to reminding us of the larger potential of RNAi Therapeutics, positioning yourself as a strong platform company also tells the market that you are ready to take advantage of the most attractive RNAi-amenable markets by developing best-in-class solutions.  I cannot imagine e.g. that a blockbuster RNAi Therapeutic for TTR amyloidosis will not prompt companies which believe to have the better delivery technologies to compete for the revenues.

In order to make a credible case of being a strong platform company, vibrant R&D operations are necessary.  In addition to being indispensable for technical improvements, trying to instead obtain your animal data and formulations from CROs can be dangerous.   One of the reasons why Arrowhead Research and Tekmira should do well in this environment is that they never suffered the drastic layoffs that particularly targeted the basic research organizations while the product-specific teams were mostly left intact.

Selling the platform dream to investors and achieve an acceptable cost of capital will be an important task for RNAi Therapeutics companies to bridge the time until real sales revenues come in.  Instead of hurting investors, a healthy cost of capital and cash cushion also lessens the risk of companies succumbing to a dilutive death spiral and allows their companies, cash-, but not technology-constrained, to capitalize on their technologies in a timely manner.   

ISIS/GSK and Tekmira Come Out with HBV Knockdown Plans

If you did not appreciate the value the pharmaceutical industry has come to place on the HBsAg knockdown concept for achieving a functional cure for chronic Hepatitis B (HBV) infection, the last two days will have woken you up. 

Yesterday, ISIS Pharmaceuticals reported that it had received a $7M milestone payment related to the development of an antiviral RNaseH development candidate (ISIS-GSK3Rx, aka ISIS-HBVRx) which, although undisclosed for competitive reasons, hasgot to be for HBV.  And today, Tekmira publicly announced that they will file an IND for an HBV-RNAi candidate in 2014 while hinting at the partnering potential of such a treatment candidate.

Arrowhead Research is thus not alone in their efforts any more.  Coincidentally, Arrowhead reported today the completion of their enrollment of the phase I single-dose, healthy volunteer study with ARC520, their DPC-delivered candidate for chronic HBV.  Accordingly, the dose escalation was able to run through all the pre-planned 6 dose cohorts up to the top dose of 2.0mg/kg. 

Apparently, there were no signs of significant dose-related toxicities.  The only finding of concern among the 36 volunteers, 24 of which received drug, was 2 cases of lightheadedness of uncertain clinical relevance.  As these occurred at the highest dose, it seems that the company suspects that it could have been drug-related although the study remains blinded for follow-up.

A dose of 2mg/kg without any serious adverse events or dose-limiting toxicities is a great start for DPC delivery technology.  This is especially the case when one considers that the single-molecule subQ version of DPC that I hope will form the basis for the upcoming pipeline candidates, except for the next one perhaps, will be much more potent than the two-molecule version of intravenously delivered ARC520 based on the non-human primate data presented at last year's OTS meeting.

With 2mg/kg of ARC520, I further believe that HBsAg knockdowns of over 90% are likely.  The biggest challenge going forward with this program will be setting a knockdown goal and getting the dose and dose frequency right.

For more about increasingly lively HBsAg knockdown for the treatment of chronic HBV, please follow my HBV Knockdown Blog.

Also today: Tekmira and Arrowhead Research Rapidly Filling Pipeline

In addition to chronic HBV, Tekmira further disclosed development plans for candidates addressing Marburg infection, alcoholism, hypertriglyceridemia and severe orphan glycogen disorders.  The presentation made clear that the company has not sat on its hands since the settlement with Alnylam and is close to having at least 4 drug candidates in active clinical development by early 2015 (TKM-PLK1, TKM-EBOLA, TKM-ALDH2, TKM-HBV).

Meanwhile, previously $200M market cap Arrowhead Research has succeeded with a $60M private placement without having had to offer a discount.  In my opinion, this reflects the broadened investor interest in the space and makes Arrowhead an even better investment as it can now, freed from financial constraints, immediately pursue some of the attractive liver targets with best-in-class solutions and beyond.

Wondering whether we are in an RNA Therapeutics bubble?  Then I suggest you get my OTS 2013 meeting report.  Dare I say that oligonucleotide therapeutics is a more capable and exciting technology than monoclonal antibodies already?  At least if you believe orphan diseases are the way to go in today's pharmaceutical drug development, there is no doubt about it coming out of the meeting. 

Steve Dowdy Responds

Following the tragic events that took place surrounding highly regarded oligonucleotide scientist Steve Dowdy from UCSD there has been much speculation and confusion about the ownership of technology related to RNAi Therapeutics companies Traversa Therapeutics and Solstice Biologics.  This Open Letter by Professor Dowdy is published to present his views on the scientific pedigree of the technology behind Solstice Biologics which received significant VC funding earlier this year.  It would be a shame if the incidence were to cause further damage, also to the field of RNAi Therapeutics, by casting doubts on this promising company and delivery approach.  It is not meant as a criticism of Doug Macron at Gene Silencing News.


October 2, 2013

Shame on You Doug Macron!

I'm lying here in pain with a bullet hole that goes in one side of me and out the other having 
been hit by one of 7 bullets fired from a 45 caliber gun by Hans Petersen from a distance of ~8 
feet during his murder attempt on me and my wife, while we and our children were sleeping two
weeks ago. As you know, within hours Petersen committed another brutal attack, shooting the 
brother of his estranged wife, a crime police said was related to Petersen’s marital problems. I 
remain at an undisclosed location with my family, fearful that Hans Petersen will be released on 
bail and come after me and my family again. So with all of this as a backdrop, you have the 
audacity to write an article based entirely on false and unsupportable statements made by this 
thoroughly discredited person that accuses Curt Bradshaw and I of stealing technology from 
Traversa to start Solstice Biologics, and then you attempt to bolster those accusations by 
quoting emails written by Hans Petersen and purportedly given to you by his brother.

If Hans Petersen and Scott Petersen think we stole anything from Traversa, which we 
emphatically did not, then they should have brought this to the court system long ago, and they 
should stop using Facebook and Linkedin postings to make unsubstantiated claims. And Hans 
Peterson should certainly not be using violence against me, my family or anyone else. If they 
think the work at Solstice is derivative of their work, then the Patent Office and the courts are 
where a civilized society takes their disputes, not by trying to kill the other party.

As for your September 26, 2013 article in Gene Silencing News, where you refer to certain 
email exchanges between me and Hans Petersen and paraphrase a portion of one stating that 
“Dowdy also wrote that a significant amount of the research being conducted on the technology 
in his UCSD lab did not belong to Traversa, and indicated that it could be licensed to a company 
other than Traversa should it continue to be publicized by Petersen,” I am not certain what you 
are trying to imply here. The statement you quote fails to include contextual information with 
respect to what Traversa did and did not hold license rights to and what my role as an academic 
researcher involves. Here is the missing contextual information that should have been included 
in your piece and should have been the subject of diligence with respect to follow up questions 
posed to the Petersen’s:


1) Traversa took a license on particular patent applications developed in my UCSD lab during 2006 (SD2006-150 and SD2009-296 concerning certain PTD-DRBD technology and SD2006-
270 concerning certain RNN technology). The UCSD-Traversa License Agreement by its terms 
did not grant Traversa any rights on other work in my lab (or any other lab) at UCSD beyond the 
referenced applications and continuations, divisions, certain CIPs and foreign counterparts. 

2) Traversa did not sponsor any research in my lab at UCSD and therefore Traversa had no 
first-rights of refusal on any of my future work.

3) I am an academic researcher and no License Agreement by UCSD to any commercial 
licensee includes any obligations on my part or the part of any other personnel at UCSD to stop 
doing academic research. Any implication in your article, based upon the email provided you by 
Scott Petersen, that my academic work at UCSD should automatically flow to Traversa is 
ridiculous and in conflict with the Intellectual Property Policies and Conflict of Interest Policies 
that academic researchers function under in all academic institutions I am familiar with.

4) I was party to a Consulting Agreement with Traversa, that agreement contained obligations to
assign intellectual property rights conceived or discovered in the course of me rendering 
consulting services to Traversa; it did not cover work performed at my UCSD lab.

5) Because I was in the hospital recovering from gunshot wounds, I was unavailable to confirm 
that I sent the email (scrap of email) you included in your Sept 26 article. I cannot confirm that I 
sent the email without seeing it in its entirety. However, the reference to Petersen “continuing to 
publicize the technology” was a reference to my concern that he not disclose technology with 
respect to which Traversa held no rights and that was being developed in my UCSD lab and 
was at a very early stage of development, thus letting the field know what I was working on.

Mr. Macron, you would be well advised to do some basic diligence on the manner in 
which academic laboratories make inventions available to private companies, because 
the line of arguments that the Petersen brothers are feeding you is just false.

Your September 26, 2013 article in Gene Silencing News, also references a Hans Petersen 
email dated May 2013 that he sent to the legal counsel for the Traversa trustee overseeing the 
company's bankruptcy proceedings. You state that in this email “Petersen alleged, among other 
things, that Dowdy and Traversa CSO Curt Bradshaw declined additional investment in the 
company from Dr. Corey Goodman, a pharmaceutical industry veteran and managing partner of 
venture capital firm VenBio, in order to intentionally drive the firm into bankruptcy.” As Corey 
Goodman of venBio has previously informed you, venBio was never approached by 
anyone seeking an investment in Traversa and we did not meet with Dr. Goodman until 
April 2012, by which time Traversa had already entered bankruptcy. As a point of fact, I 
had never met nor spoken with Dr. Goodman prior to April 2012.


Your September 26, 2013 article in Gene Silencing News, also includes the statement that “As 
part of Traversa's bankruptcy proceedings, intellectual property related to the RNN technology, 
which had been licensed from UCSD, returned to the institution and relicensed to Dowdy and 
Bradshaw for use by the new RNAi drug company they founded, Solstice Biologics.” The 
Traversa Board of Directors elected to return the UCSD SD2006-270 patent application to 
UCSD in November 2011 to avoid having to pay UCSD a $100,000 fee that Traversa was in 
arrears on, as well as a separate fee that would come due to UCSD in February 2012; Traversa 
was at this time focused on its PTD-DRBD program and maintained those patents. The return 
of the UCSD SD2006-270 patent application to UCSD was not part of the Traversa bankruptcy 
proceedings it occurred five months prior to the Traversa bankruptcy filing. When Solstice 
Biologics entered into its license with UCSD in December 2012, the SD2006-270 application 
and 2 additional UCSD patent applications were licensed to Solstice Biologics. To be concise, 
the UCSD SD2006-270 application is not Traversa technology; its UCSD technology that was 
licensed to Traversa and then returned to UCSD.

The technology that UCSD licensed to Solstice Biologics was not licensed until December 2012. 
It was not even shown to venBio until April 2012 because it had taken me and my UCSD lab of 
12+ scientists more than 6 years to resolve the challenges with RNN technology and build a 
self-delivering siRNN prototype; only then did we show it to potential investors. 

The Solstice Biologics investors spent a significant amount of time and money to diligence the 
in-licensed UCSD intellectual property and also in reviewing the patent Scott Petersen patent 
application purchased from the Traversa estate before entering into the license and funding of 
Solstice Biologics. Based on those analyses, the investors funded Solstice Biologics.

Lastly, have you even considered that your two primary sources are (1) someone who is 3
currently in jail for 3 counts of attempted murder and (2) a sibling who provided emails written by 
his brother and who, according to your reports, has made inconsistent claims of ownership to 
certain siRNN technology that he later bought from a third party in bankruptcy?

So will you please stop writing these unsubstantiated pieces where Hans Petersen and 
Scott Petersen show you selective emails and make ridiculous claims about the pedigree 
of the technology that Solstice Biologics licensed from UCSD and call into question my 
character and actions and those of Curt Bradshaw?

I give you permission to publish this as is, unedited, under the title of "Steve Dowdy Responds"

Sincerely,

Steve

Steven F. Dowdy, Ph.D.
Professor
Dept. of Cellular & Molecular Medicine
George Palade Laboratories, Room 231B
UCSD School of Medicine
9500 Gilman Drive, MC-0686
La Jolla, CA 92093-0686

Email: sdowdy@ucsd.edu

Merck’s RNA(i) Therapeutics Unit on the Chopping Block

After more than 6 years of playing it safe and producing nothing tangible in terms of clinical development candidates, I fully expect that the time has come for Merck’s RNA(i) Therapeutics unit to be slashed.  This morning, Merck announced a company-wide cost-cutting re-org, as part of which it aims ‘to reduce its focus on platform technologies’.  Remember Roche 3 years ago? 

Similar to Roche, the immediate financial benefits of scrapping the unit not only come in the form of savings in R&D expenses, but also likely tax write-offs due to for example the $1.1B purchase of Sirna Therapeutics in 2006.  Expect the company to exceed analysts’ expectations for coming financial results.

However, the most important factor why I believe the unit's fate had been sealed was the departure of Peter Kim as the Head of Merck Research Laboratories.  It has been said that he had been a key backer of the unit, and with the biologics guy from Amgen, Roger Perlmutter, probably intent to erase Dr. Kim’s legacy…

It is hard for me to feel sorry about such an event.  Their RNAi science was probably the best among the Big Pharmas, but hiding behind the VIOXX experience forever while taking home monthly salaries was asking for trouble.  Meanwhile, the likelihood that Merck will partner with the real innovators in the space on specific product candidates has increased today. 

Tekmira Expands Biodefense Efforts to Cover Both Ebola and Marburg Virus

Following the successes with its Ebola biodefense program, Tekmira has started to present increasingly promising data for treating a related filovirus, the Marburg virus.  With 100% survival rates in non-human primate models and new RNAi triggers that should cover a broad spectrum of strains and possibly related viruses, the company is well positioned to also take away the Marburg indication from competitor Sarepta which in turn has become preoccupied with its exon-skipping drug candidate for DMD.  

For the Ebola program alone, the $100M market cap company estimates that the successful development of a drug under the so called Animal Rule could result in stockpiling orders from the US government worth about $100M annually.

From guinea pigs...

In a publication last month, Tekmira and their collaborators from the UTMB in Galveston, Texas, reported the successful treatment of guinea pigs infected with a number of different strains of the Marburg virus.  Because the development of treatments for rapidly mutating viruses and viruses with a multitude of divergent strains is hampered by sequence diversity, a broader strain coverage was achieved, like in Tekmira’s Ebola approach or in Arrowhead’s chronic HepB strategy (ARC520), through the concurrent use of two siRNAs in a single formulation.

Given that rodents have limited predictiveness for anti-filoviral efficacy in Man and given that the formulation was apparently a 1^st generation D-LinDMA-based SNALP, I was not all that excited about the publication due to the apparent early stage of development.

...to non-human primates

In a positive surprise therefore, the Chief Scientific Officer of the company, Ian MacLachlan, presented gold standard non-human primate data of SNALP RNAi Therapeutics for Marburg virus at the ongoing OligoDIA regulator-industry conference.  Accordingly, Tekmira’s newer LNP formulations (‘SNALP-G’) were shown to fully protect monkeys from death due to Marburg infection when given at 0.5mg/kg (=the magic safety threshold for SNALP).

As an important comparison, Sarepta last year reported ‘83% to 100%’ protection rates in comparable models when treatment was initiated up to 96 hours after infections with its newer PMOplus morpholino chemistry.   It is therefore of interest to test the impact of further delaying treatment with SNALPs.

As I have been following Tekmira’s biodefense program over the years, one development I noticed, especially in the era of budget cuts, was the apparent push by the Department of Defense for biomergency treatments that can address not just multiple strains of a virus, but multiple viruses all-in-one.  Intriguingly, one of the bullet points in Tekmira’s slide presentation on goals for the Marburg program (slide 36) talks about the ‘Design broad spectrum siRNA to target multiple MARV and Ebola’.  Does this mean that the ultimate prize here are stockpiling contracts for a single drug addressing both Marburg and Ebola?

Having a better ear for and adjusting to the needs of the DoD is also one reason why I believe Tekmira will continue to have the upper hand over competitor Sarepta with its DMD distractions and an investor base that could not care less about the Marburg program.  Although the targets were explicitly not disclosed, I wonder whether there are host factors one could target and which would be beneficial for various viral applications.  This would be an alternative to trying to come up with target sequences that are conserved across the viruses.

Finally, serving as yet another example of illustrating the value of biodefense contracts for platform technology companies, Tekmira disclosed plans that a first clinical trial with a lyophilized SNALP formulation, TKM-EBOLA, is planned for the first quarter of 2014. 

A First Clinical Step Towards Subcutaneously Administered RNAi Therapeutics

Today, Alnylam reported more detailed results from their phase I study of ALN-TTRsc for the treatment of the cardiomyopathy form of TTR amyloidosis (press release here, data presentation here).  As telegraphed by COO Barry Greene at the recent Morgan Stanley Healthcare Conference, 5mg/kg and more of the subcutaneously administered ALN-TTRsc were required to obtain a persistent knockdown of 80% (5mg/kg) and more (10mg/kg dose).  

As these doses fail the 2.5mg/kg challenge the company had set itself earlier, increased injection volumes and injection numbers are being evaluated.  A phase II trial with ALN-TTRsc is planned to start at the end of the year with a pivotal phase III study slated to start in 2014.

Small potency differences to monkey studies matter for ALN-TTRsc

As I had indicated earlier, the preclinical monkey studies with ALN-TTRsc (see slide 7) left open the possibility that with an 80% target knockdown, ALN-TTRsc can be sufficiently effective at 2.5mg/kg which corresponds to the magical injection volume of 1ml for safe and convenient subcutaneous administration.  However, the phase I human data are shifted by 1 dose cohort meaning that 5.0mg/kg were required for an approx. 80% sustained knockdown (see slide 11 where 2.5mg/kg clearly missed).

If you are confused about the press release prefers which talks about an 87.5% 'mean' (n=3) knockdown ‘at nadir’ for the 5.0mg/kg dose, it is more appropriate for this indication to refer to the average knockdown level over time which was more like 80-82% (slide 11).  

Nevertheless, oozing with optimism, Alnylam set itself an even higher bar for ALN-TTRsc for future studies with a sustained target knockdown of 90%.  Such a level of knockdown was only achieved in this study at the very high dose of 10mg/kg.  Indicative that 10mg/kg is not a desirable dose, the company amended its study to evaluate 7.5mg/kg given as two 1.5ml injections in addition to 5.0mg/kg and 7.5mg/kg every 2 weeks to determine whether less frequent dosing is feasible.

Personally, I believe 5.0mg/kg twice a week would be a more promising dosing schedule as with higher doses there should be diminishing returns due to receptor saturation.

Safety OK, but questions raised

The reported safety profile did not yield apparent nasty surprises.  This is obviously very good in a phase I study of a new chemistry.  However, it has also become obvious that injection site reactions could become an issue.  Unlike ISIS Pharmaceuticals which has declared such reactions to be a cosmetic problem in the past, injection site reactions have to be closely watched as they could indicate systemic immune issues.

Despite the small numbers, the injection site reactions appear to be dose-related with 3 out of 3 subjects at the 10mg/kg exhibiting them during the 5 weeks of the study.

 

These observations are also relevant to the competitive DPC delivery technology by Arrowhead Research because both involve galactose conjugations.  In the case of the intravenous version of DPC, the galactose has been added to the endosomolytic peptide, while a cholesterol is added to the RNAi trigger administered separately. 

Initially, I had thought IP issues could have prompted Arrowhead to put the galactose on the ‘less precious’ peptides.  However, an alternative explanation could be that galactose conjugated to nucleic acid might be more prone to immune stimulations.  Due to the apparent dose-relatedness of the reactions, it will be important that future subQ candidates (both Alnylam's GalNAc and Arrowhead's subQ DPC which have galactose and the RNAi trigger on the same molecule) have therapeutic knockdown potencies at 2.5mg/kg and below.  

A very perplexing observation, albeit not discussed at all, is the fact that elevated immune cytokine levels were reported in the placebo cohort, but none in the ALN-TTRsc cohorts (see slide 15 of the presentation).  I really don’t know what to make of this. 

Summary

Despite some of the blemishes above, the results are a decent start for subcutaneously administered RNAi Therapeutics for liver-expressed gene expression.  In addition to the safety profile, this thus renders also the last argument for phosphorothioate-based RNaseH antisense technology in such indications obsolete, namely the ‘patient-friendly’ route of administration.  Patients with TTR amyloidosis and their relatives can now look forward to two attractive RNAi options, and I expect there to be continued RNAi improvements for this indication.

For those interested in Tekmira, the results are positive in the sense that they increase the value of ALN-TTR02 given the modest potency of ALN-TTRsc, and support SNALP to be the clinically validated gold standard in RNAi delivery.  For those interested in Arrowhead Research, the results are positive as they underline the value of more potent subQ RNAi delivery technologies and because they lower the safety risk around the galactose chemistry.

Alnylam Comments Suggest SubQ Tech Failed to Achieve Efficacy Goal

At today’s Morgan Stanley Healthcare Conference, the President and COO of Alnylam, Barry Greene, told the audience to assume that it took a dose of 5 to 10mg/kg of ALN-TTRsc to achieve the 80% knockdown that had been reported in July.  This suggests that ALN-TTRsc has failed to meet the stated goal of limiting the subcutaneous injection volume to 1ml or less as this is predicted to correspond to a dose of 2.5mg/kg.

If it holds up, this would have a number of important implications.  Firstly, it would affect the profile of ALN-TTRsc itself.  I don’t believe it to be necessarily terminal in a disease like the FAC form of TTR amyloidosis for which ALN-TTRsc is being developed.  Nevertheless, squeezing 2 or even 4ml into the subcutaneous space, or alternatively administering multiple 1ml shots in one sitting, could put some needle-phobic patients off, especially as TTR amyloidosis is set to become a competitive marketplace.

Secondly, such doses would not bode well for Alnylam’s GalNac delivery platform on which the company has pinned its future.  For example, one of the big draws of the hemophilia drug candidate ALN-AT3 which is about to enter clinical development was supposed to be its subcutaneous, instead of intravenous route of administration. However, as I speculated last week (Alnylam's GalNAcs as Cholesterol-siRNA 2.0), I believe ‘GalNac-siRNAs’ have advanced somewhat since ALN-TTRsc with the addition of lipophilic moieties such as cholesterol and the jury could therefore still be out regarding the capabilities of the GalNac delivery platform.

And finally, a weak potency of ALN-TTRsc would further increase the value of competing delivery technologies, especially SNALP (Tekmira) and the subcutaneous version of DPCs (Arrowhead Research). In fact, if the full results that are to be presented in about a week at the American Heart Failure Meeting confirm the 5-10mg/kg doses, it would explain why Alnylam chose not to have ALN-TTRsc compete with and potentially replace SNALP-based ALN-TTR02. Instead, the intravenous ALN-TTR02 will likely be applied to the earlier onset, more rapidly progressing form of TTR amyloidosis (FAP), whereas the subcutaneous ALN-TTRsc will be used for the more slowly progressing, later onset form of the disease (FAC).