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.