Has mdRNA Found a Way around Alnylam’s RNAi Trigger IP Wall?

mdRNA has to be The RNAi Therapeutics corporate success story of 2009. At the brink of bankruptcy at this time of last year after problems with their former nasal delivery business sent the company into a breathtaking tailspin, the new management, critically made up of former Sirna Therapeutics executives, was able to save the company by quickly cashing in on some non-core assets, attracting upfront payments of about $12M in two non-exclusive RNAi Therapeutics deals with RNAi heavy-weights Novartis and Roche, and an opportunistic financing shortly after final approval of a partnered legacy generic (calcitonin-salmon nasal spray for osteoporosis) caused an irrational spike in mdRNA’s share price. Although I perceive mdRNA’s lack of RNAi Therapeutics publications as a clear weakness, also in light of its history of later unsubstantiated scientific claims, these developments are signs that not only is the management apparently well connected, but that the company has been able to establish a quite decent RNAi Therapeutics drug development platform and with IP that cannot be dismissed out of hand. Since the Novartis deal on delivery involved not only IP, but also the transfer of liposomal formulation know-how, but the Roche deal on RNAi triggers appears to be an IP-only deal, I have looked more into mdRNA’s claim of having freedom-to operate with its ‘proprietary’ RNAi trigger designs. Out of fairness, I should add here that a lot of this change had been set in motion with the old management.

It has become a popular game in the RNAi Therapeutics industry to design ways around Alnylam’s dominant RNAi trigger patent portfolio. While corporate strategy is the driving force behind these supposedly proprietary designs, given that intellectual property is not always guided by the spirit of science and since new trigger designs might have unexpected beneficial properties for certain applications, it is prudent to pay attention when Roche is willing to pay mdRNA non-refundable $5.0M for a non-exclusive license to mdRNA’s RNAi trigger IP claims after having just paid more than $300M for much less of Alnylam’s RNAi trigger IP. Of course, one might also view this deal, which was also largely free of downstream obligations, as a move by Roche to cover all their bases- just in case.

At the time of that deal, mdRNA had three RNAi trigger designs in its stable: certain rights to City of Hope’s Dicer substrates, the three-stranded meroduplex siRNA design after which mdRNA takes its name, and unlocked nucleic-acid-modified siRNAs (usiRNAs). Subsequent to that deal it emerged from regulatory filings that, perhaps because Dicerna appears to own most of the Dicer-substrate IP, that mdRNA has dropped Dicer substrates from their portfolio. Furthermore, since Dicerna would probably have been quite happy to make a deal with Roche, it would appear that Dicer-substrates, although part of the deal, was not the main motivation for Roche. This leaves us with meroduplexes and usiRNAs.

If you assembled five PhDs in molecular biology for a weekend, presented them with the main claims of Tuschl I and II, and asked them to come up with RNAi trigger design-arounds, in principle the result may have looked similar to what mdRNA arrived at. That the various designs should also likely to be functional biologically, at least to a certain degree, is a testament to the robustness of the RNAi pathway when it comes to relatively short double-stranded RNAs, a realization that has only sunk in subsequent to the Tuschl publications, but that was already heralded by the findings of Kreutzer and Limmer.

Both Tuschl I and II essentially claim double-stranded RNAs of 21-23 (T-I) or 18-24 (T-II) (contiguous?) NUCLEOTIDES in length. Besides size and overhangs which had been the main theater of the RNAi trigger IP war thus far, one might argue that an RNAi trigger that does contains a number of NON-nucleotides or in which the dsRNA is made up of three, and not two strands, does not literally violate the Tuschl claims.

I have long been puzzled why mdRNA would think that using unlocked nucleic acids (UNA) per se would be the solution, as I considered UNA just another nucleotide-modification alternative in the armamentarium of the siRNA synthetic chemist: UNAs are simply nucleic acids in which the C2-C3 bond has been disrupted (that is apparently also the process by which they are generated). But when the company’s CEO Michael French at the BMO Capital Markets Focus on Healthcare Conference made a point that it is the fact that UNAs supposedly are not nucleotides is indeed what underlies mdRNA’s interest in UNAs. A quick, non-representative survey among scientists that I know, however, was consistent with my initial assumption that UNAs clearly have to be considered ‘nucleotides’ as they look and behave like such. Moreover, there are numerous quotes by the inventor of UNA, Jesper Wengel of Denmark, and by the Danish company RiboTask from which mdRNA has exclusively licensed the UNAs for therapeutic applications that UNAs are modified nucleotides. The question therefore appears to boil down to whether potential partners first and then the patent offices can be convinced of that a ‘nucleotide’ that does not contain an intact ribose or deoxyribose strictly is a nucleotide no more. Although I am skeptical that any one nucleotide modification is sufficient to get around the Tuschl patents, I could imagine that the possibility alone of their literal interpretation could motivate others to come up with similar non-nucleotide siRNAs.

Aside from the IP considerations of usiRNAs, it is premature to judge the scientific value of this modification over others. The fact that ‘unlocking’ a nucleotide is a quite distinct modification should allow it to endow an siRNA with unique properties with respect to recognition by the RNAi machinery, target specificity, the potential to be recognized by innate immune receptors etc. What can be said based on the limited publication record (Bramsen et al., 2009: Large-scale screen....; Kenski et al., 2009: Analysis of acyclic nucleoside modifications...), UNAs like many other modifications are best tolerated in the passenger strand and can reduce off-targeting by the passenger-strand, whereas the use in the guide strand is much more position-dependent. Whether its judicious incorporation can indeed largely abrogate innate immune responses and/or allow for a better differentiation of on-target cleavage over microRNA-like off-targeting as claimed, remains to be seen and especially published (also because mdRNA/Nastech has a track record of making similar claims which tend to silently disappear over time). On the other hand, since Sirna Therapeutics (Merck) is evaluating UNA-modified siRNAs (Kenski et al., 2009), despite its access to Tuschl I, may be interpreted as a sign that there may indeed some unique scientific merit to usiRNAs, and mdRNA may derive value from controlling its use for RNA therapeutic applications.

Moving on to 3-stranded siRNAs, the other pillar of mdRNA’s RNAi trigger strategy, from an IP point one has to probably say that this stands a better chance of surviving Tuschl scrutiny with Tuschl II explicitly claiming double-stranded RNAs consisting of two strands. The double-strandedness of Tuschl I, however, could be more broadly interpreted in that a nick should not make a difference in determining the length of a double-stranded region. In this case, it will be interesting to find out how 3-stranded siRNAs with a gap instead of a nick would perform.

When I first heard of the 3-stranded siRNAs in 2006, I thought that this was based on the observations by a number of labs at the time that the passenger strand of the siRNA is cleaved as part of RiSC activation and that the objective of 3-stranded siRNAs thus was to hi-jack the RNAi machinery downstream of the intact siRNA. However, looking at the history of the relevant patents, it appears that this was not the case, but was merely a coincidence. There is, however, an interesting twist to the story. RiboTask, which happens to also be mdRNA’s partner in usiRNas, filed for almost identical patent protection, but with a priority date that appears to be a couple of months ahead of mdRNA’s. In the case of RiboTask, which calls the 3-stranded siRNAs not meroduplexes but small internally segmented interfering RNAs/LNAs (sisiRNA/sisiLNA), I do not want to be as dismissive about their scientific motivation, as they address a major concern of 3-stranded siRNAs related to their potential instability. Since short segments of double-stranded RNAs should be relatively unstable, they demonstrated (Bramsen et al., 2009: Improved silencing properties using small internally segmented interfering RNAs) that it is possible to restore ‘duplex’ stability by modifying it with locked nucleic acids, the mirror-image of UNAs and curiously invented by the same people. Moreover, they show that while heavy modification of both strands renders most siRNAs inactive (with the exception of 2’F and 2’-O-methyl), converting such a modified siRNA into a 3-stranded siRNA often restores at least some of the knockdown activity (also quite interesting from an RNAi mechanism point of view). The ability to heavily modify an siRNA without losing activity may be particularly useful for applications where the siRNA is exposed to nucleolytic degradation such as for conjugate-siRNA approaches. From a scientific perspective, I should also mention that the 3-stranded siRNA design is a way to abolish passenger strand microRNA-type off-targeting, although this is no more a considerable challenge for RNAi Therapeutics. It should also be of interest to evaluate how nicked, and particularly gapped siRNAs are recognized by the various innate immune receptors. The above demonstrations may also help RiboTask and mdRNA in their way through the patent offices, particularly in the US and in light of the mentioned academic research that might have started before RiboTask’s work, and I am curious whether the usiRNA relationship between RiboTask and mdRNA will be extended also to sisiRNAs/meroduplex technology.

Since IP is subject to interpretation and therefore fraught with some uncertainty, it remains to be seen whether mdRNA can achieve certain freedom-to-operate in the RNAi trigger space. Although usiRNAs are the current focus of the company, keeping the meroduplex as an alternative design option open seems prudent. More broadly, RNAi Therapeutics in general can only gain from investments in evaluating new modifications and designs as unforeseen beneficial properties could emerge from this. Until then, however, it is unlikely that any Big Pharma would want to risk their RNAi Therapeutics future entirely on mdRNA’s RNAi triggers. This also explains why mdRNA sees more partnership potential in its RNAi delivery efforts, the currently more pressing need in RNAi Therapeutics and for which the financials should continue to grow. mdRNA urgently needs such a partnership since although the company had just averted bankruptcy, with cash running out over the next 3 months, the struggle to get out of the bankruptcy quicksand has not stopped. Based on management, while a number of early-stage technology evaluations are ongoing, no significant upfront payments from partnerships can be expected until the middle of next year by which time it hopes to have more non-human primate data to satisfy a more discriminating Big Pharma audience. Given the positive developments of the company over the last year and management’s track record, investor interest should be sufficient to support a PIPE within the next 30-45 days so that the company gets a shot at achieving its partnership goal. If one indeed wanted to make the gamble on mdRNA’s management, from an investment perspective, waiting until more is learnt about the terms of the financing may be prudent, unless valuations continue to fall much further.