Tekmira Regains Control over Leading Delivery Technology

When Tekmira filed its lawsuit against Alnylam in March 2011, it found itself in an impossible position: Alnylam’s apparent mis-use of SNALP-related trade secrets not only diminished their strategic value to Tekmira, including depriving it of potential pharmaceutical partnerships, Tekmira may even not have been able to use the technology it invented.  As a result, it might have been left to die in a little cage with ‘1^st generation’ technology as its technology was making rapid progress.    

Cash and Control

Based on the disclosed terms of last night’s settlement with Alnylam (Tekmira's version here, Alnylam's version here), Tekmira got essentially all that it needed: control over its leading systemic RNAi Therapeutics delivery technology, including the contested MC3 lipids of which the IP was assigned to Tekmira, and a $65-75M payment (~$16-18M of which will go to pay outstanding legal fees).  The payment, of course, will finally allow the otherwise financially conservative company to push forward their development pipeline with interesting therapeutic candidates such as TKM-PLK1.  Notably, as part of the settlement, Tekmira obtained full ownership over this candidate which I believe addresses one of the most exciting RNAi targets in oncology. According to the Q3 financial results, also released today, TKM-PLK1 has been making good progress, including showing signs of drug activity and will advance into phase II studies next year.

Beyond the cash, the new IP licensing arrangement between the companies is at least as valuable.  Importantly, Tekmira has regained exclusive sub-licensing rights to ‘LNP intellectual property’, an incredibly important part of the settlement as before that Alnylam enjoyed such control, mainly via its rights to the Semple-Wheeler IP covering important aspects of ionizable SNALP technology.  This should open the door for Tekmira to enter into the long-expected pharmaceutical partnerships. Novartis and Takeda are here the most obvious near-term candidates for platform-type relationships.

Assuming that the new relationship is not restricted to RNAi Therapeutics, an added bonus is that the settlement could similarly pave the way for relationships in the microRNA Therapeutics space, particularly for the delivery of microRNA mimics.  Only recently, privately-held Mirna Therapeutics made headlines by raising $34.5M to fund the development of a microRNA mimic into the clinic, indicating the significant interest in this area of drug development.

Value of the Trade Secrets

Less clear is the damage to the trade secrets that were at the center of the dispute and on which much of Tekmira’s strategic advantage rested.  Numerous groups and companies have attempted home-brew liposomal RNAi trigger delivery, but only Tekmira’s technology has made it into the clinic.  Especially the ability to formulate and manufacture the particles is what set Tekmira apart from the competition.  In their press release, however, Alnylam stated their intention to use its own LNP manufacturing capabilities.  Apparently, it has already established such GMP manufacturing capability over the last year (in a separate building apparently for added suspense).  Assuming that Tekmira did not assist them in establishing such manufacturing, this indicates that the number of people with critical knowledge to the trade secrets has grown.  This can be particularly a problem in the wake of lay-offs in a place like biotech world capital Cambridge, Mass. 

Still, I assume there to be significant hurdles for other companies to replicate Tekmira’s processes, and with its liposomal experts, Tekmira should continue to lead in advancing SNALP delivery, making it the liposomal delivery partner of choice.

With cash of around $50M (excluding the $10M which are contingent on likely 2013 development milestones for ALN-VSP02 and ALN-TTR02), partnerships likely to come in due to the clarified IP situation, the $141M DoD Ebola biodefense contract (a new more potent and safer formulation will be used) and the income stream from Talon Therapeutics, Tekmira has thus emerged as the vibrant RNAi Therapeutics company it should have become 3 years ago.  Nevertheless, today's terms underline the value of Tekmira and RNAi delivery in general.  Exciting times ahead.