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.
8 comments:
I believe Tekmira is out of competition for TTR. As part of settlement deal, Tekmira had granted Alnylam exclusive license to up to ten targets for LNP delivery. TTR is most likely to be one of them. That leaves only Arrowhead as a possible competitor. Target specific patents and improved potency of GalNAc since TTRsc would make it highly unlikely that Arrowhead will go after TTR.
Which target-specific TTR patents are you talking about? At least in terms of RNAi trigger sequence, the claims that get issued these days are pretty minimal. Similar for HBV...I also haven't seen an indication that Alnylam is working on their 4th clinical TTR development candidate, and it is unclear, IMO, for how many genes Alnylam can find sub-1mg/kg ED50 GalNAcs.
I got the smell that Alnylam has a more potent version of TTRsc after reading their recent update on GalNAc platform. Alnylam can also tap the most potent version of LNP from Tekmira under the exclusive licensing agreement if there is a need for it. It still needs to be proven that DPC is safer and more potent than the most potent LNP from Tekmira. Also, TTR is an orphan indication. So whatever Arrowhead comes up with, it better be clearly superior to what Alnylam comes up with. Lastly, Alnylam doesn't seem to be concerned about competition from Arrowhead since they are advancing GalNAc for both TTRsc and PCSsc with confidence even though they have access to DPC for one of their targets. May be Alnylam knows something about DPC that we don't know about. And don't forget that GalNAc has the best safety profile and safety will always trump the little potency advantage the other delivery systems may have.
"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."
Agreed, but that's the way the cookies crumbled for Benitec. Nevertheless, they have minimal overhead and should not need to dilute shareholder value. They are starting to rise with the tide.
"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. "
Exactly what didn't happen with Benitec. Problem for them is the registry is dominated by a single individual. Unless he is working for the ordinary investor then BLT is a no go zone.
No VIABLE corporate organization stands on a single persons shoulders.
Dilution still likely. Clause at the soon to be held AGM to be voted on permitting it without having to seek holder approval.
Isn't ARWR going through dilutive death spiral right now? With the recent capital raise their fully diluted share count has gone to over 45 million from under 20 million only a few months ago.
While I am as much of a believer in this technology as anyone, I wonder to what degree the current run-up in stock prices and VC raises is just another short-term blip providing some cash for the moment, but then evaporating soon, leaving another wave of scientists stranded in limbo careers (BTW, a whole lot of RNAi experience and $1.50 can buy you a cup of coffee)...my point is that this field leaves people virtually worthless (I'm not sure if your perspective is different Dirk...a brilliant Mark Kay postdoc and where are you now?)
I look at failures such as Heplisav in the vaccine space which uses a single stranded DNA as an adjuvant, yet causes the very serious autoimmune disorder Wegener's granulomatosis. This resulted in a no vote for the vaccine approval. Perhaps the risk-reward trade-off will be more favorable in a cancer treatment, but the vehicle complexity makes it much more high risk too.
The negative tone is from years of wisdom being at the forefront of this field and witnessing it crash and burn and seeing everyone who ever touched this field essentially becoming a pariah without a career (there are a whole lot of consultants out there on LinkedIn).
Anon said: "I look at failures such as Heplisav in the vaccine space which uses a single stranded DNA as an adjuvant, yet causes the very serious autoimmune disorder Wegener's granulomatosis"
Err, not sure what your agenda is, but there was a single case in 2008 and the hold on Hepislav was lifted. Hepislav has now passed Phase III and will likely be on European shelves before the US (blame your FDA for that).
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