Whoa! AstraZeneca Pays RNA Therapeutics Start-Up Moderna $240M

In the age of rare/severe diseases in drug development and personalized medicine, RNA Therapeutics are enjoying broad interest like never before.  Following a series of RNaseH antisense, splice modulation, microRNAs, and RNAi Therapeutics deals with large pharmaceutical companies, the AstraZeneca-Moderna Therapeutics news today marks another high water mark in the deal-making.  According to their agreement, AstraZeneca will pay Moderna Therapeutics $240M in upfront alone for rights to Moderna’s technology in the cancer and cardiovascular/metabolic disease areas (40 targets).   

AstraZeneca’s Externalized RNA Therapeutics Efforts

The deal with an innovative biotechnology start-up while in the process of shedding yet another few thousand employees, particularly in internal R&D, illustrates AstraZeneca’s R&D externalization trend.  RNA Therapeutics here seem to play a key role as supported by additional recent multi-million dollar deals in the space with ISIS Pharmaceuticals (December 2012) and PTC Therapeutics (June 2011) in oncology.  Unfortunately for RNAi Therapeutics though, it has been left out so far from the AZ’s deal bonanza.  Only in 2011, it wrapped up a collaboration with UK-based Silence Therapeutics.  Still, as AstraZeneca faces the challenge of how to deliver messenger RNAs to the liver and cancer, I expect RNAi Therapeutics delivery companies to financially benefit from AZ's mRNA investment soon (not just for mRNA, but also for RNAi delivery).

Moderna’s Technology

Moderna’s approach is a gene therapy one.  However, while classical gene therapy involves the use of DNA vectors for expressing therapeutic proteins, Moderna aims to circumvent the need for DNA, which have certain regulatory and safety drawbacks, and deliver instead messenger RNAs encoding for the same proteins.  This, in fact, is not a new idea and particularly popular in the immunotherapy field (albeit delivered ex vivo here, by electroporation). Duke University for example had a clinical RNAi Therapeutics program that involved the transfection of mRNAs along with siRNAs (cancer vaccine).

A 2013 Nature Protocols paper by the company’s scientific co-founder Derrick Rossi also leaves me scratching my head as to why AstraZeneca concluded that Moderna’s IP was worth $240M to them.  According to the protocol, the mRNAs are generated by normal in vitro phage polymerase transcription as you would do in the lab using Life Technology’s MEGAscript kit.  The only difference from the standard protocol may be that modified CTPs and UTPs were included.  This is supposed to mitigate the immunostimulatory potential with RNAs just as in RNAi Therapeutics and also contribute to the stability of the long RNAs.  

Based on the fact that neither the concept of mRNA Therapeutics are novel nor the RNA modification strategy unexpected, I expect that Moderna has yet to come out with their secret sauce and that the Nature Protocol may be misleading.  I therefore look forward to studying the patent applications, two of which curiously just published today.  It must be the IP that explains why AZ took a $240M license, to get a sense of the secret sauce.  But still, given the hundreds of nucleotide modifications available, it seems hard to fathom that Moderna's a blocking IP position, and why pay $240M if not a blocking one?

Need for Delivery

In addition to AstraZeneca’s interest in cardiovascular/metabolic disease and cancer, the state of the RNA(i) delivery technologies explains their choice.  Compared to RNAi Therapeutics where small RNAs are involved, the longer mRNAs face an even steeper cytoplasmic delivery challenge.

The liver, of course, is a key target organ for metabolic and cardiovascular disease.  Among Arrowhead’s DPCs, Alnylam’s GalNAcs, and Tekmira’s SNALP, the most advanced RNAi delivery technologies for the liver, it is essentially only Tekmira’s SNALP technology which I regard to be readily applicable to mRNA delivery (also for cancer delivery).  Conjugate approaches such as DPCs and GalNAcs are disadvantaged for mRNA delivery because they would provide no extra protection to the long, fragile mRNAs.  Liposomes by contrast provide such protection by wrapping around the RNA.

I expect to hear more about Moderna’s and AstraZeneca’s mRNA delivery strategies soon.  I, for one, do not believe that Tekmira’s shares are trading up by 8% on strong volume on the back of a SeekingAlpha article.

Other evidence that RNA Therapeutics (and Gene Therapies) Are Hot

ISIS Pharmaceuticals yesterday presented phase I data for their spinal muscular atrophy (SMA) splice modulation drug candidate at the annual AAN meeting.  This compound is partnered with BiogenIdec.  The results from the single-dose PK-oriented study suggest that fully 2’-MOE phosphorothioate oligos are well tolerated in the CNS and that a once-a-year/once-every-half-year dosing regimen may be possible: phosphorothioate oligos sit like a rock in the CNS when intrathecally administered.  In addition to the hints of clinical efficacy at the highest dose level (9mg) presented at the conference, what makes me optimistic about this program is that relatively little (compared to RNaseH) phosphorothioate molecules seems to be required based on the pre-clinical results.

In other news, cancer drug developer Celgene will work with gene therapy company bluebird bio on cancer gene therapy.  Although financial details were not disclosed, they were probably substantial (wild guess: $20M) given the broad nature of the collaboration (multi-year, multiple targets).