RNAi Companies Ought to Look Beyond Their Platform

This week, Alnylam announced in their roundabout way that it has discontinued the development of ALN-HBV for the treatment of chronic HBV infection.  Instead, it has come to an agreement with well-funded start-up Vir Biotechnology to select a new GalNAc-based RNAi compound, ALN-HBV02, which Vir will largely take control over clinical development.  Alnylam meanwhile retains considerable back-end loaded opt-in rights, milestones and royalties.  

As alluded to in a post last week, ALN-HBV seemed always doomed to fail due to target site selection issues. Also, Alnylam’s heart never really was into ALN-HBV with project leader Sepp-Lorenzino functioning as a one-woman show while competitor Arrowhead mobilized considerable internal and external resources.  She’s, of course, left the company not long ago.

We may never find out the real reasons for their decision although Alnylam would like us to believe that it was a specificity issue since ALN-HBV02 will now be ESCplus-based. Please don't fall into that trap.

My expectation is that ALN-GO1 for primary hyperoxaluria (PH) will suffer the same fate as the initial biomarker data from clinical studies have indicated that likely prohibitively high doses would be necessary to achieve robust oxalate lowering (a modest ~2x increase in glycolate biomarker at a single dose of 6mg/kg).

Once again, a much smaller competitor, Dicerna, has been running circles around RNAi juggernaut Alnylam.  Importantly, it has conducted detailed work on the biochemical pathway of oxalate metabolism and closely studied the natural history of the disease.  The reward was the discovery that the lactate dehydrogenase A (LDHA) is in all likelihood a much better target.

In hindsight it is quite clear that both HBV and PH were only chosen by Alnylam to scare investors away from their competition to cement RNAi dominance.  Not only that, it then filed a frivolous lawsuit against Dicerna alleging trade secret violations.

Will RNAi platform companies have to broaden their tech base?

Given the need to immerse oneself into individual diseases, and also as RNAi is about to open the commercialization chapter, frequently developing drugs for entirely new disease categories served by medicines, a new question arises for the industry: do I remain a platform company or do I have to open my technology base to best serve patient communities and shareholders?

While I do like to criticize Alnylam for shamelessly behaving like the industry's big bully, TTR amyloidosis is one of the diseases they deeply care about.  With 10-20k TTR amyloidosis patients in developed markets, a number that should grow due to increased disease awareness, better diagnosis tools and access, and hopefully prolonged lives, this could well develop into a $5B+ annual market over the next decade.

As the company behind what promises to be the first dominant drug for this disease and a next generation product candidate (ALN-TTRsc02) that should remove any doubt who owns TTR gene knockdown following on its heels, Alnylam would be irresponsible not to try and control the whole patient experience, including complementary non-RNAi treatment options.  In other words, Alnylam would cease to be a pure-play RNAi Therapeutics company while continuing to rely on RNAi for conquering new markets.

This evolution of corporate strategy, of course, is not new to biotechnology and has played out at companies like Vertex Pharmaceuticals (small molecules à cystic fibrosis focus), Biogen (recombinant proteins à multiple sclerosis/CNS focus), and indeed in the Oligonucleotide Therapeutics space before.

Sarepta, once singularly based on morpholino antisense technology, for example has been on a Duchenne muscular dystrophy (DMD) business development spree as their first antisense drug (EXONDYS51) was getting approved.  Sarepta sports a solid >$3B market capitalization illustrating that the financial markets reward such commitment to commercialization and category dominance.

On the other end of the spectrum is Ionis Pharmaceuticals.  

This company is happy to cease control over its groundbreaking compounds and disease insight quite early in their drugs' development paths. Consequently, it finds itself in situations where it either only gets a pittance from breathtaking medical and commercial successes such as SPINRAZA (for spinal muscular atrophy) or it gets caught with their pants down when a partner returns a compound late in the game as has just happened with IONS-TTR/Inotersen and GSK.

The market cap of Ionis, a company that shames $100B+ Big Pharma in terms of its pipeline and which will have close to a dozen compounds on the market and/or in pivotal clinical trials in a year or two, is comparatively paltry: $8B.

And the reason for this?  They are considering themselves a scientific company with a mindset of ‘we are better than organizations with corrupt sales departments’ that is difficult to find even in academia nowadays.  OK, management keeps drawing nice salaries and humongous stock/options rewards, so its really only shareholders that suffer.  

So as much as it hurts me as an RNAi scientists, when it comes to maximizing shareholder returns, the platform serves the purpose of capturing dominant footholds in new disease categories of high unmet needs, but this position has to be fortified by deep relationships with the patient community and an equally deep understanding of disease pathology.  And if necessary, develop and/or license complementary non-RNAi compounds.  

A word on the Arcturus-Janssen HBV deal

In addition to the Alnylam-Vir deal, another HBV RNAi-related deal was announced this week, namely between newly public Arcturus and Big Pharma player Janssen, a unit of Johnson & Johnson.

According to the agreement, Arcturus will work together with Janssen to develop an RNAi drug for HBV utilizing Arcturus’ intravenously administered RNAi triggers formulated in LNPs.   Arcturus uses fancy names for these components, but this is what's behind 'LUNAR' and 'UNA Oligomer Chemistry'. 

Given the availability of potent, but subcutaneous GalNAc-conjugation options in the industry, this interest by Janssen may come as a surprise to some and will serve Arbutus bulls as ammunition in claiming that Arbutus’ HBV RNAi LNP formulation has a future.  A Big Pharma deal after all is a knighthood in the industry.  

Still, I highly doubt it.

It is more likely that similar to Merck which had used LNPs internally as a disease interrogation and target validation tool, but not for commercial development before- even before GalNAc had come to prominence- J&J may view LUNAR-RNAi as a relatively speedy, but inexpensive way to test RNAi for its potential as a backbone therapy in HBV.  If it likes what it sees, watch out for the real deal with Dicerna or Arrowhead.  

Can Transient RNAi Augment Cell Therapy-based Immune Oncology?

Unlike all the major RNAi pure plays (Alnylam, Arrowhead, Dicerna, and Silence Therapeutics), RXi Pharmaceuticals is not pursuing GalNAc-based gene knockdown in the liver.  Instead, it applies its self-delivering RNAi (sdRNAi) triggers to local and, more recently, ex vivo gene suppression.

Its ex vivo efforts involve the addition of the silencing triggers to immune cells in the absence of extraneous transfection reagents with the goal of enhancing the performance of cell therapy-based immune oncology.  Immune oncology, of course, is a hot area in drug development.  Notable clinical successes mechanistically aim at immunologically unmasking tumor cells (à checkpoint inhibitors) or sending T-cell killers after them (à CAR-T).

Transient RNAi non-obvious application to cell therapy

When sdRNAi licensee MirImmune, now part of RXi came forward with the idea of applying transient RNAi strategies to cell therapy, I was very skeptical.  Cell therapies after all suggest that long-lived pharmacodynamics are desired, whereas RNAi gene silencing in dividing cells is known to be limited in duration, maybe a week or so.  Wouldn’t therefore gene therapy and in particular genome editing for gene ablation be much more useful?  Or what about that half-forgotten DNA-directed RNAi?  

Certainly, for gene silencing effects that ideally should last throughout the active life of the adopted cells in the patient, transient RNAi is not attractive given all the alternative technologies out there such as genome editing and of monoclonal antibodies.

On closer inspection, however, transient RNAi may be able to uniquely achieve a number of goals that could uniquely enhance adoptive cell therapy for cancer and potentially other applications, too.  One of them is to simply increase the number of cells with the desired phenotype.  After all, the patient-derived cells used for adoptive cell transfer are a precious resource and manufacturing issues could result in cell numbers too low to be useful.  Accordingly, self-delivering RNAi triggers may increase the number of useful cells either by expanding them, e.g. by targeting cell cycle-related genes, or by more effectively directing them to the desired phenotype (e.g. tumor-attacking vs protecting/tolerogenic cells).   

Importantly, as sdRNAi does not require electroporation or transfection reagents, there is less risk that the procedure itself reduces cell numbers or has undesirable effects on the cell phenotype. 

Out of the test tube and into patients, transient RNAi could also be useful in helping in the early tasks of the adopted cells.  One such early step is infiltrating the tumor which is thought to have a major impact on immune oncology treatment success.  While tumor infiltration can be expected to be largely guided by proteins interacting on the cell surface and would seem a suitable application of monoclonal antibodies, monoclonal antibodies often have difficulties getting into tumors.  

It is also conceivable that an early performance provided by transient RNAi may have a lasting effect on eventual therapeutic outcome, e.g. by hitting the cancer hard initially so that the risk of immunologic escape by mutation is minimized.  This is similar to how early reductions in pathogens predict the treatment success of most infectious diseases such as HCV.

Finally, RNAi may be applied to multiple genes at once.  This is more difficult to do with systemically administered monoclonal antibodies, and unlike monoclonal antibodies, RNAi can also inhibit proteins not accessible to monoclonal antibodies; multi-targeting is also less effective with genome editing.

Looking ahead

Transient RNAi for adoptive (immune) cell therapy is in its early stages.  Given some of its unique characteristics, it could be a useful addition to the gene toolbox next to genome editing, DNA-directed RNAi, or simple gene addition.  While RXi is planning to plod along with preclinical proof-of-concept studies, as a non-immune oncology person and given the poor capitalization of the company, I particularly look towards clinical collaborations and corporate partnerships to judge just how compelling a tool transient RNAi really is here.

RXi as an investment or trade

RXi Pharmaceuticals is a small biotech company with a tiny market cap of ~$13M and I would be remiss not to mention that I currently own somewhat more than 2% of the outstanding shares (ticker: RXII).  This is a relatively small gamble on my part, but certainly enough to keep me interested and engaged. 

Right now, it is probably not much more than a gamble given that RXi’s management has displayed an extraordinary degree of naivete about the capital markets.  Accordingly, their continued operations currently largely rely on an ATM-type arrangement with Lincoln Park Capital Fund which appears to only have accelerated putting down the stock, and possibly eventually the company down a death spiral. 

Near-term, RXII is therefore a bet that management will finally stop this nonsense and instead rely on the upcoming multiple (!) clinical trial outcomes catalysts by year-end from at least 3 (dermal scarring, cutaneous warts, consumer skin products) of its non-immune oncology portfolio to create some excitement about the stock.  Results from a retinal scarring trial are expected in early 2018.  Considering the tiny market cap of ~$13M, the sheer number of upcoming data read-outs alone could result in mouth-watering stock returns if the stock gets discovered.  Such a run-up would of course also provide financing opportunities to feed its immune oncology ambitions, so please management: don't put a lid on it by activating the ATM.

HBV RNAi 2.0

Gene knockdown, in particular RNAi and RNaseH antisense, holds great promise in the treatment of hepatitis B viral infection.  It is currently the only practical means to potently inhibit all viral gene products*.  It therefore is poised to become a cornerstone of future treatment regimens aiming at functionally curing HBV, an infection predisposing more than 200 million patients worldwide currently to liver failure and cancer.

Arrowhead- lessons learned

Unfortunately, the field took a big hit last year when HBV RNAi trailblazer Arrowhead Pharmaceuticals had to abandon its efforts due to preclinical toxicity resulting from its particular approach to releasing the RNAi triggers into the target cell cytoplasm (monkey deaths due to the DPC).

Nonetheless, after more than a dozen trials in WoMan, the company had learned a great deal about HBV and how to best tackle it by RNAi.  Chief among those lessons were the observations that RNAi can suppress viral genes, most notably the surface antigens HBsAg by sometimes more than 2-3 logs.  Moreover, in HBe-antigen negative and those HBe-antigen positive patients previously exposed to polymerase inhibitors (‘nukes’), Arrowhead painfully found that most HBsAg is derived from host genomically integrated HBV.  Consequently, RNAi trigger target sites placed downstream of the HBsAg ORF may be lost and RNAi rendered futile (ARC520àARC521 transition). 

Finally, consistent with the experience with nukes and interferons, it appears that RNAi treatment success (functional cure) should follow complex viral and host immune dynamics and while intriguing changes were observed in the clinic with ARC520/1 (e.g. new lower baselines following treatment cessation), it remains unclear how long an RNAi agent would have to be given.  This has implications for whether intravenous routes of administrations are practical or not.

The competition

Arrowhead Pharmaceuticals, however, has not been the only RNAi game in town developing HBV therapeutics.  Its main competitor in terms of scientific prowess has been Arbutus Biopharma (renamed from Tekmira after biotech wonder boy Vivek Ramaswamy of Axovant fame spectacularly raided the company in 2015).  Its lead RNAi candidate ARB-1467 comprises of 3 RNAi triggers which are formulated in lipids (LNP) and is given intravenously alongside steroids.

While I like the 3-trigger strategy for pangenotypic coverage and for minimizing the risk of the virus developing drug resistance (including by genomic integration), the more cumbersome intravenous route of administration- now reduced to short 2-week intervals in an effort to increase potency- and the steroids makes ARB-1467 uncompetitive in a world of more potent and less frequent simple subcutaneous competition.  The use of immune suppressive steroids, of course, in HBV patients is a dicey proposition and would also seem to run counter to the ultimate aim of achieving immune control of the virus.

Unless it turns out to promote a functional cure along with other agents in short order, say less than 6-12 months, ARB-1467 will likely end up as a science project without much clinical impact.

RNAi powerhouse Alnylam Pharmaceuticals meanwhile is the third RNAi company that has begun clinical development of an HBV RNAi agent.  Importantly, it has been the first company using a simple subcutaneous GalNAc-conjugate format, therefore positioning it to be useful even when more prolonged treatment will turn out to be necessary.

After review of the program, however, it appears that the company prematurely rushed the single trigger ALN-HBV into the clinic without thinking too much about resistance issues.  To start with, ~2% of tested HBV genotypes have mismatches with the trigger that mitigate targeting efficiency.  As a single trigger candidate, ALN-HBV will also have to be given alongside highly potent replication inhibitors (nukes) as one can easily see how ALN-HBV resistant genotypes would otherwise eventually take over.

ALN-HBV moreover targets a site downstream of the HBsAg ORF, around the DR2 repeat element with marks the integration hotspot that has bedeviled ARC-520 before.  While Alnylam has been going around claiming ALN-HBV doesn’t suffer from ARC-520-type issues, I would challenge them with two points:

1)     under selection pressure by ALN-HBV to maintain HBsAg expression and thus evade host immune detection, the virus may ‘choose’ to break up upstream the ALN-HBV target site without affecting the HBsAg ORF; 

2)      more troublesome, closer inspection of the very paper Alnylam points to for making its claim (Jiang et al. Genome Research 22: 593) and which analyzes HBV integration hotspots, shows that ~40% of DNA break points appear to be upstream of the ALN-HBV target site (compare ‘position 1600’ below).      

One can therefore easily see why the project leader behind ALN-HBV, Laura Sepp-Lorenzino, has recently left the company to join Vertex Pharmaceuticals.  One has to get the impression that ALN-HBV, just like ALN-GO1 have only been rushed to the fore as a front in order to keep a lid on their competition by creating doubt about the ability of Arrowhead Pharmaceuticals and Dicerna, respectively, to compete with juggernaut Alnylam. 

Thrilled to join @VertexPharma as Head of Nucleic Acid Therapies!!!

— Laura Sepp-Lorenzino (@LauraSepplore) September 23, 2017

 

It is yet another lesson that in drug development, a detailed understanding of the disease is as important as the technology used to tackle it.  Half-hearted side projects typically lead nowhere.

Lastly, I would be remiss if I did not mention the RNaseH antisense efforts by Ionis along with partner GSK, and those of Roche.  Ionis/GSK are not only developing an unconjugated fully phosphorothioated antisense molecule, which I believe has little chance of competing in the market due to predictable safety and potency issues, but also a more interesting GalNAc-conjugate version (IONIS-HBV-LRx).  Although I currently see RNAi ahead of antisense in gene knockdown in hepatocytes (potency, frequency of administration, and safety), the GalNAc-conjugate version potentially has the advantage of also being able to access the pregenomic RNA directly, while direct pgRNA cleavage by RNAi of this non-mRNA remains to be shown.  My prediction is that  while RNAi can to some degree access pgRNA, this is not as effective compared to its cleaving mRNA.  What all of this means biologically remains to be seen.

Arrowhead HBV RNAi 2.0

Therefore, after all the drama and competitive noise, Arrowhead is poised to recapture the HBV RNAi lead with its new GalNAc-based candidate.  ARO-HBV is poised to enter the clinic in the first half of 2018.   It is subcutaneously administered and involves 2 RNAi triggers that are claimed to cover the viral resistance bases, including HBsAg derived from genomically integrated HBV.

The company expects the agent to be used once a month or less frequently, an attribute valuable should functional cures take longer to emerge.

Given knowledge leadership in HBV gene knockdown and prior practical experience, Arrowhead should also be able to navigate through the HBV clinical development maze faster than its competition.  As can be seen from its resurging stock price, this view is also shared by an increasing number of investors. 

Arrowhead has paid for taking some short-cuts when it was compelled to push ARC-520 into the clinic to give it a shot of becoming a serious player in RNAi before it ran out of capital.  It took some risks and failed, but that failure could well be the soil from which future success will emerge. 

Disclosure: long Arrowhead Pharmaceuticals

 

 

 

 

 

 

* it is unclear whether RNAi can directly cleave pregenomic RNA, whereas RNaseH antisense should be able to do that.