RXi Pharmaceuticals Reality Check

Last week on December 17, RXi Pharmaceuticals announced (3-month) results from a phase II study of the company’s lead candidate RXI-109, an RNAi Therapeutic for the treatment/prevention of dermal scars.  

In this lower abdominal scar revision study 1301, one side in a given patient was treated with drug on days 1, 8, and 15 following surgery (immediate group) or on days 14, 21, and 28 (delayed group), while the other side was given placebo.  An assessor blinded to which side was injected with RXI-109 or placebo was then asked to tell drug from placebo. 

According to the release, the drug-treated side was (correctly) identified 54% of the time in the delayed treatment cohort versus 24% of the time in the immediate treatment cohort.

In the absence of further information on the identification procedure and scoring used (e.g. it is likely 'there is no difference' was a possible answer which would somewhat undersell the results), the following interpretation seems logical: in the delayed treatment cohort skin wounds treated with RXI-109 looked no different than those treated with placebo.  Moreover, when treatment was started soon after scar revision surgery, RXI-109 possibly did harm.

It certainly would have helped if RXi provided the VAS score as it did in the one-month update in September.

To me, this result looks like one of the worse types of biotech trial failures.  If you like to talk about 'misleading', then RXi should not look further than the title of their own press release on this failed study:

'RXi Pharmaceuticals Announces Sustained Effect of RXI-109 at Three Months Post Scar Revision Surgery and the Completion of Enrollment for its Phase 2a Trial RXI-109-1301'

Two days after the clinical trial news, the company then announced that it had licensed a non-RNAi dermal compound which is currently in phase II studies for cancer and other proliferative diseases of the skin.  A proprietary formulation of small molecule ‘immuno-modulator’ diphenylcyclopropenone (DPCP), aka Samcyprone, from an obscure company called Hapten Pharmaceuticals.

Now on to RXi’s financials...

At the end of Q3 2014, RXi had about $10M in net cash ($10.69M cash/cash equivalents minus $1M in liabilities), spending about $2.25M a quarter.  This means they presently have ~$8M in cash minus the undisclosed cash it spent on the Hapten deal.  If RXi continued with RXI-109 and RNAi and if it initiated the phase II clinical studies with Samcyprone, the cash burn would obviously increase.  Let’s say to $4M per quarter à $8M/($4M per quarter)= 2 quarters of cash left.

...and RXII the stock

Obviously realizing that the new asset is not not solving their  financial predicament, by contrast it is only worsening it, concurrent with the Hapten deal RXi entered into a new stock purchase agreement with Lincoln Park Capital ('ATM') according to which RXi Pharmaceuticals can sell LPC newly issued shares to raise capital.  The way these deals work is that LPC would get a discount on the shares and turn around and sell to the public market to lock in the profit.  This means that if RXi really counted on such revenues to keep their PCR machines running, any substantial rally in RXII is likely to be met with the selling of new shares.

Adding to the pressure is the fact that major shareholder Tang Capital, holding just shy of 50% of the fully diluted share count, has been steadily selling down its ownership in RXi.  Moreover, some of the Hapten deal (incl. milestones) was/will be paid in shares and it would be reasonable to suspect that the owners of Hapten are not in it for the potential of making money with speculating in RXII shares.  

If you consider a fully diluted market cap of $70-80M, the present situation with RXI-109 and the failure for years (also under Galena) to advance the self-delivering RNAi platform, the case can be made that there are better biotech stock investments out there.

Pick your poison

For the above reasons (including financial limitations), I tweeted last week that the move to license Samcyprone more or less amounted to RXi Pharmaceuticals getting out of the RNAi game.  In fact, the bitter irony is that RXi was born out of parent company Galena Pharmaceuticals making exactly the same move (marginalizing RNAi by acquiring a non-RNAi clinical asset).

So yesterday, the CEO of RXi Pharmaceuticals issued an Open Letter that, to sum it up, I was misleading the public with my conclusions about the strategic shifts happening at the company and was thereby scaring investors into selling their shares:

'We can only hope that investors and shareholders who read blogs, tweets and postings from third parties purporting to have an informed view on our business will also do an in depth evaluation of the background of those who write such "reports", their past contributions to the actual progress in the RNAi space, and their possible associations to competitors and other firms working in a similar space. Notwithstanding these ill-informed criticisms, we remain optimistic about the prospects of the Company and our core technology.'

By contrast, RXI-109 was on track, the company’s RNAi platform alive and kicking, and immune modulator (aka skin irritant) Samcyprone fully being aligned with RNAi gene silencing as it changes gene expression (I’m impressed).

At this point, a friendly piece of advice: RXi ought to label Samcyprone an 'immuno-oncology' drug which would almost sound as sexy as the VEGF compound RXi is now 'synthesizing'.

So I’m not sure what to hope for: a) that the CEO does not understand that continuing with two phase II compounds under present circumstances is akin to financial suicide, especially from a shareholder’s point-of-view; or b) that he understands it and scapegoats social media, including myself, for calling the bluff in an effort to win time.

   

I suspect it’s the latter and either way shareholders are unlikely to come out ahead.  After all, when he took the helm of RXi Pharmaceuticals at a time when it was fashionable to bash and ridicule RNAi, he made it clear that he was a ‘small molecule guy’ at heart. If I may ask you Geert, what exactly were your contributions to the actual progress of RNAi Therapeutics?

Dicerna Behind Alnylam in GalNAc, But Early Data Suggest Clinical Relevance

As promised, RNAi Therapeutics fast-follower Dicerna for the first time disclosed last night data on GalNAc-conjugated Dicer-substrate technology.  It was not much that was shared, but a single-dose mouse ED50 value of ~2.0mg/kg (30% knockdown at 1mg/kg) suggests that similar to Alnylam, Regulus and ISIS Pharmaceuticals before, Dicerna also has achieved clinical relevancy with GalNAc-conjugates.  In other words, the data are consistent with robust clinical knockdowns with multi-dosing at doses of 10mg/kg or less.

By comparison, the single-dose ED50s for Alnylam’s first-generation GalNAc-siRNA ALN-TTRsc (OTS 2012 presentation) were between 1 and 5mg/kg in mice (20-25% knockdown at 1mg/kg) and 5mg/kg in Man (phase I study).

The data, both potency-wise and the fact that it was murine data only (not non-human primate data), however, also make it clear that Dicerna is at least 2 years behind Alnylam.  Accordingly, the company expects to file its first GalNAc IND in 2016, though it said it already has 4 candidates cooking for that purpose.

Due to the competitive disadvantage, it is understandable that Dicerna is keeping its gene targets secret (e.g. the data were against an undisclosed gene) as the primary hyperoxaluria and HBV histories have shown that Alnylam’s strategy is to suffocate its competition by announcing competing clinical candidates. 

On the other hand, with some luck and skill, Dicerna should be able to exploit its secrecy and build a large competitive lead in its chosen indications given that in going after ~2 dozen indications at once, Alnylam is spreading itself thin.   The alpha-1-antitrypsin history where Arrowhead has well overtaken Alnylam through focus supports this.  Similarly, Dicerna seems to have a good working relationship with the PH1 community which is very important in the ultra-orphan drug development field.

Overall, assuming that murine GalNAc data translate into non-human primates and humans, the promise of being able to knock down genes in the liver subcutaneously in a clinically relevant manner is important step forward for Dicerna which before that was without viable delivery technology.   

Other news

In last night's presentation, Dicerna also for the first time revealed non-human primate data for its lead primary hyperoxaluria program DCR-PH1 (note: investors should discount DCR-MYC).  The data show a near-elimination of the HAO1 target gene at monthly doses of 0.3mg/kg and due to the cumulative efficacy, a monthly repeat dose of ~0.1mg/kg should be feasible for a solid impact on disease-causing oxalate crystal formation.   Importantly, such a dose is expected to be safe, especially with the novel 'EX' strategy whereby Dicerna is adding anti-inflammatory activities in the RNAi trigger extension.

PS: from a scientific point-of-view, it shall be interesting to see data come out relating to the impact of the nucleic acid structure (e.g. length of double-strand RNA) added to a GalNAc ligand on functional delivery efficiency.  Such data would be informative on the mechanism of endo-lysosomal release and guide towards further optimization of the platform (e.g. utility of positive charge, lipophilicity, stability).

Dicerna About to Disclose Status of GalNAc-Conjugated Dicer Substrates

Dicerna is about to hold its annual R&D day tonight and, for the first time, reveal the status of their version of GalNAc-RNAi trigger conjugates.  To wit, when Dicerna licensed LNP technology from Tekmira for their primary hyperoxaluria development candidate, it concurrently announced that future development candidates will be based on GalNAc conjugate technology.

For stock market investors, the big question is whether the data suggest sufficient maturity and competitiveness compared to the more famous GalNAc-siRNAs by Alnylam.  If Dicerna can show tonight robust and prolonged knockdowns in non-human primates, e.g. in the form of an ~80% PCSK9 knockdown after 30 days with less than 10mg/kg, Dicerna could be viewed as a great Alnylam catch-up investment.  This is because such maturity would allow Dicerna, which sports a market cap just 1/30 that of Alnylam, to rapidly expand its liver-directed pipeline.

Scientifically, this should be possible although the requirement for prior Dicer processing of Dicerna’s, but not Alnylam’s RNAi triggers could impose limitations as to the extent of nucleic acid modifications.  It is a high degree of stability and consequently modifications that has been key to Alnylam’s recent technology progress.

On the other hand, an unanticipated upside would be if Dicerna could reveal advantages over Alnylam’s technology that are a direct reflection of it using a slightly longer RNAi trigger. 

Disclosure: long DRNA.

ISIS and Alnylam Starting to Walk the Talk

Talk is one thing, acting on it another.  This has also been true for RNA Therapeutics industry bellwethers ISIS Pharmaceuticals and Alnylam when they talked about their belief in the revolutionary nature of their technologies, but their actions suggested they were plagued by self-doubts.   Following continued improvements in their platforms and a string of clinical successes (ISIS-ApoCIII, ISIS-SMA, ISIS-FXI, ALN-TTR02, ALN-AT3 etc), the gloves are off as they strive to achieve Genentech-type $50-100B biotech glory within a decade by expanding the scope of their development programs and retain increasing commercialization rights.

$50-100B is around the market cap that a few dominant players often achieve for a technology area that 'has made it'.  In the case of ISIS Pharmaceuticals, however, I can foresee that, due to the currently wider choice of modalities and tissues amenable to single-strand antisense technology (incl. single-strand RNAi), full maturity could result in the world’s largest company by market capitalization.  

To get there, however, it is important for the companies to have a strong believe in their own technologies and this in drug development means retaining more and more of the commercialization rights instead of giving away most of the upside by early-stage out-licensing and partnering.

Alnylam- it’s all about the GalNAc (at least for now)

In the case of Alnylam, this shift has further been emphasized last week when they introduced the STArs strategic initiative, expanding from the original orphan genetic applications to developing medicines for more common illnesses such as in the cardio-metabolic arena as well as some of the viral hepatites (B,D, and E). 

When Alnylam gave away the PCSK9 target to The Medicines Company in early 2013- which parenthetically is making MDCO along with RGLS arguably the best 2015 RNA Therapeutics investment idea on a risk:reward basis- the company was still unsure about its own position in the pharmaceutical universe with a first-generation GalNAc delivery technology as its foundation which required large amounts of siRNAs and injection volumes.

Now, with remarkably potent and long-lasting versions of GalNAc-siRNAs, convenience and safety have improved so much that RNAi has become highly competitive even for the very common cardio-metabolic disorders such as type II diabetes and high LDL cholesterol.  With that confidence, expect RNAi to shatter some of the former domains of a long-time biotech darling it has long been living in the shadow of: the monoclonal antibody (ALN-CC5 and ALN-PCSK9 being the first two examples of that).

ISIS- no end in sight

In the case of ISIS, this confidence shift was emphasized when they announced that instead of partnering away the lipid franchise as they would have done before, they are now setting up a semi-independent commercialization entity around their ApoCIII-, Apo little a-, and ANGPTL3-targeted drug candidates.

It was a confluence of factors that turned me from an ISIS skeptic to an acolyte earlier this year.  Along with first signs that ISIS was prepared to actually sell drugs themselves, in terms of scientific progress these factors should result in an exciting pipeline centered around targeting not 'only' the liver, but also the many severe neurodegenerative diseases.   

Add to this the ever expanding target space for and opportunities with antisense, it is difficult for me to see where all this should end as long as ISIS can 1) remain independent; 2) retain its industry-leading position; and 3) the healthcare market can pay for its medicines.  Time to dream BIG.

Alnylam’s Second-Generation GalNAc Data Impress

Earlier this week at the American Society of Hematology meeting in San Francisco, Alnylam presented first multi-dose knockdown data in humans for its second-generation GalNAc-siRNA conjugate technology (ESC-GalNAc).  Accordingly, an almost 60% knockdown was seen in the first (and so far only) patient dosed at 0.045 mg microgram per kilogram ESC-GalNAc siRNA with the knockdown yet having to reach its nadir.  Moreover, further knockdown benefits are likely to accrue with dosing beyond 3 times weekly as was the case in this study.

At these low doses, no remarkable adverse events were reported, including injection site reactions or increases in liver enzymes which were seen with first-generation GalNAc-siRNAs in humans at much higher doses.

Though the data from this phase I study of ALN-AT3 in hemophilia patients is still early and there will be gene target-dependent differences in knockdown potency, they do support Alnylam’s claim that second generation GalNAc is indeed considerably, as much as 50x more potent than first-generation GalNAcs.  Only last week I had speculated that it may be more appropriate to estimate 2^nd gen GalNAc to be ‘only' 5x more potent than 1^st gen GalNAcs.

I was wrong.

In non-human primates, ALN-AT3 had an ED90 of 0.5mg/kg with weekly dosing.  Based on the phase I data thus far, I expect the corresponding ED90 dose in humans to be a ~ weekly 0.075mcg/kg 0.075mg/kg for a ~7-fold improvement in potency in humans versus non-human primates, a relative potency improvement that is not seen for first-generation GalNAcs.  Add to this the inherent 5x improved intra-species potency of second- versus first-gen GalNAc (Nair et al 2014), it is indeed possible that ESC-GalNAc enjoy an up to 50x improved potency advantage.

In other words, it should be possible to now achieve highly potent knockdown with a once-monthly dosing regime and sub-1 ml subcutaneous injection volumes. 

The value of this for the ALN-AT3 program, which harnesses a unique mechanism in an otherwise crowded hemophilia field which in general is moving towards less frequent dosing/infusion regimens and less immunogenic molecules, remains to be seen.  The slow enrolment pace of the phase I trial, ~5 hemophilia patients enrolled in 6 months, gives cause for commercial concern.     

The competition

While the improved potency is great for Alnylam, the gene knockdown competition is unlikely to yield the liver to Alnylam.  Highly potent knockdowns are possible with other platforms by Arrowhead, ISIS, Tekmira, and possibly Dicerna, too. Beyond route of administration [subQ for Alnylam GalNAc, ISIS (GalNAc-) ASOs, Arrowhead’s single molecule DPCs, and Dicerna GalNAc versus intravenous for Arrowhead’s 2-molecule DPCs and Tekmira’s SNALP LNPs], differentiation will come from safety/tolerability and dosing frequencies.

The next datapoints in this regard will come from the R&D Day by Dicerna early next week (Dicer-substrate GalNAcs) and the 4mg/kg phase I data from the immensely exciting anti-miR122 program by Regulus Therapeutics (employing GalNAc-antisense chemistry) in January 2015.

Factor XI Data by ISIS Pharmaceuticals Revolutionizes Anti-Clotting Field

Yesterday, ISIS Pharmaceuticals disclosed in-depth data from their phase II anti-clotting study in about 300 patients undergoing total knee arthroplasty (TKA).  This took place at the American Society of Hematology (ASH) meeting alongside a publication in the New England Journal of Medicine (Bueller et al. 2014).  The data for the first time provide striking evidence that it is possible to dissociate anti-clotting activity from a commensurate increase in the risk of bleeding.

Accordingly, while the 200mg per week dose (moderate 59% FXI knockdown) achieved a rate of venous thromboembolism (VTE) similar to the enoxaparin standard-of-care comparator in the trial (27% and 30%, respectively), at the 300mg per week dose (much more robust 78% FXI knockdown) the VTE rate dropped by 7-fold to just 4%.  

At the same time, bleeding risk remained the same, if not better for ISIS-FXIRx vs enoxaparin: 3% bleeding events for both FXI cohorts vs 8% for enoxaparin, albeit this was not a statistically significant difference.

In terms of safety and tolerability, ISIS-FXIRx resulted in mild local skin reactions in 6.6% of the injections, but leading to no discontinuations.  Moreoever, no flu-like symptoms were recorded.  This is a stark departure from ISIS’ legacy drug mipomersen which suffered from frequent flu-like symptoms and injection site reactions resulting in relatively frequent drug discontinuations.

Challenging the paradigm

Until now, it has been widely thought that whenever you develop a new, more powerful anticoagulant, you will pay the price of more bleeding.  This has meant not only much development money wasted, but also created important market needs such as in patients which require anticoagulants with lower bleeding risks.

It is these markets, including patients with end-stage renal disease and atrial fibrillation, that ISIS Pharmaceuticals will address first as it seeks a partner more familiar with the complexities of the anti-clotting market.

What seems to underlie the surprising results is that with Factor XI you are targeting the intrinsic branch of the clotting cascade which prevents the formation of large clots that may travel around the body often with fatal consequences, but without impeding the ability to form small clots when healing tissue damage following trauma caused by external factors. 

By contrast, conventional anticoagulants such as enoxaparin (a heparin derivative), Factor Xa and thrombin inhibitors interfere with both processes.

Challenging the establishment

The strategy of addressing niches of high unmet need in the anticlotting market first is not only explained by potentially faster orphan-type development timelines, but also by the fact that by presenting such disruptive data in a multi-billion market, ISIS can be expected to encounter stiff resistance from the anti-clotting establishment.  This refers not only to competing pharmaceutical companies, but also their associated key opinion leaders from academia that enjoy a gate-keeper function partly due to the regulators commonly seeking their advice.   

So given that the efficacy results are undoubtedly impressive, expect over the coming days, months, if not years to hear the message that the ISIS-FXIRx data ‘might’ be a proof-of-principle for dissociating clotting from bleeding for anticoagulant therapy, but that this 300-patient study needs to be replicated in a larger population and that there are ‘concerns’ around the tolerability and convenience of ISIS-FXIRx, all the while the same groups are busy catching up developing antibody- and small molecule-based versions of anti-Factor XI drugs.

Alnylam Second-Generation GalNAc Chemistry ~5x More Potent

The GalNAc-RNAi trigger strategy pioneered by Alnylam and Arrowhead Research has opened up new opportunities for RNAi Therapeutics, partly due to the fact that they may be administered subcutaneously (note: for Arrowhead that means the single molecule DPC which is not yet in clinical development).  Although the first such product candidate, ALN-TTRsc, looks like it could be a decent drug for a severe disease such as TTR amyloidosis, there is room for improvement both in terms of efficacy (--> injection volumes) and tolerability/safety (liver enzyme elevations, skin reactions).

It is therefore no surprise that Alnylam keeps stressing the fact that it has improved upon ALN-TTRsc, now referring to the original GalNAc chemistry as ‘standard chemistry’ (STC) and the improved version as ‘enhanced stabilization chemistry’ (ESC).  By inter- and extrapolating data from various model systems and for various target genes, the company has come up with the notion that ESC ‘has the potential’ to be around 50x more potent than STC (IR departments know that investors will be blind to qualifiers like ‘has the potential’).

I love it when maths meets biology.

These numbers games, of course, make little pharmacological sense, mostly due to the fact that the same delivery chemistry can result in disparate knockdown efficacies just due to sequence and target gene differences.  In addition, concluding anything about a dose response from a ~25% knockdown in a single-dose, single dose level phase I study (--> ALN-AT3) is impossible.  In RNAi, a 25% knockdown can be achieved with homeopathic drug levels and does not inform at which drug concentrations more robust >50% knockdowns will be observed.

Apparently, Alnylam is seeing it the same way and probably has received the same criticism from other sources.  It has now provided on two recent occasions much more informative datasets on the relative potencies of STC versus ESC.

At the Cantonese Nucleic Acids Forum (CNAF) in Guangzhou, China, in early November, Dr. Manoharan revealed that if you turn the STC of ALN-TTRsc into an ESC, the gain is a 5x in potency.  Consistent with this 5x notion is the Nair et al. paper that published 2 days ago in JACS where the same exercise for an siRNA sequence against the murine transthyretin gene resulted in the same 5x improved potency.

Of importance to the RNAi community, the enhanced metabolic stability was achieved by the use of phosphorothioate bonds at the 5’ ends of both the guide and passenger strands, while the 3’ ends are protected in both generations by phosphorothioates in the overhang (guide strand) and the GalNAc ligand (passenger strand), respectively.  I would not necessarily have predicted that phosphorothioates were tolerated at the guide 5’ end and this could be all the material difference there is between STC and ESC.

All eyes are now on the ALN-AT3 phase I data presentation at the upcoming ASH meeting next Monday (abstract here).  To wit, in part A of that study, Alnylam reported a ~25% mean peak knockdown for the 0.03mg/kg starting dose in healthy volunteers earlier this year (single dose).  Although there was no dose response data and they had failed to reach the maximum allowable AT3 knockdown of 40%, part A was deemed a success with the study proceeding into part B in hemophilia patients for further dose escalation and repeat dosing.  First data from that part is to be revealed.