Absolute HBsAg Levels, Not Percent Decline May Be Goal of HBV RNAi

I just walked into an early morning session at the International Liver Congress in Vienna and may have learned the most important nugget of information regarding RNAi treatment for HBV.

During the discussion in the ‘Banishing B’ session, Dr. Joerg Petersen referred to clinical analyses to be presented this Saturday showing that patients who achieve HBsAg levels of less than 500, or even better 200 IU/ml and then are given an interferon have a much better chance of eventually losing HBsAg, i.e. being functionally cured, than those that do not.

Dr. Petersen has been involved in clinical studies combining nukes and an interferon, and data presented at last year’s American Liver meeting (AASLD) showed that 9% treated with the combination for 1 year lost HBsAg in the year following combination therapy compared to just 2.8% receiving interferon alone.

Note that currently only interferons are thought to give you a chance of functionally curing HBV by medication and that HBsAg seroconversion attributed to interferon treatment may occur in the years after cessation of interferon therapy.  It will therefore be important to see whether this increase in seroconversion with combination treatment continues to hold up in subsequent years. The nukes are ‘only’ thought to protect the liver from the ongoing damage from HBV replication and may have to be given indefinitely.

I am not sure whether the new insight comes from a fresh clinical study or are the result of a more detailed subgroup analysis of the previous study.  Regardless, it hammers home a message that can be heard again and again, even more so in Vienna this year than at the London meeting last year: it is all about HBsAg lowering.

Implications for HBV RNAi

The implications of the new analysis for RNAi approaches for the treatment of HBV is obvious: use RNAi to get HBsAg below the threshold. In other words, it may be less about getting a magical 1log knockdown, but more about getting patients below 500IU/ml. 

For this, Dr. Petersen recommended using 2 nukes so that the tiny and very slow HBsAg declines observed on nukes continue ( < 0.1 log per year). With RNAi agents, you would likely achieve this goal for a patient with an HBsAg at baseline of 1000IU/ml within a month, even with a single 2mg/kg dose of ARC520 from Arrowhead Research as reported last year. 

The absolute knockdown potency of an RNAi agent would determine which fraction of the HBV population fall within this sweet spot. With a 1log knockdown e.g. you could start RNAi with patients with as much as 5000IU/ml.

For the clinical development of RNAi agents for HBV, the first step will be to determine the HBsAg decline on a background of nukes (just what Arrowhead is doing right now).  For pivotal trials, an immunostimulatory agent such as an interferon should be added to the nukeà RNAi/nuke treatment regimen to finish off the virus.

Stay tuned to learn about the fold benefit of HBV cures in patients falling below the 500IU/ml threshold, and the 3-4mg/kg single-dose results for ARC520 from Arrowhead Research to be reported later this quarter (note to Arrowhead PR department: next Monday may be a good time to do so).

The Tide May Have Turned for ARWR

Arrowhead Research emerged as a major RNAi Therapeutics player due to its- at least publicly- single-minded focus on HBV.  During this time (early 2013-early 2014) it saw a meteoric rise in its stock by more than 10-fold.

Management got so caught up by their own campaign of pushing Arrowhead Research as an HBV stock that they set themselves up for failure by setting overly ambitious goals for that program. 

As a result, the stock plummeted almost as rapidly as it had risen first by the Fed-induced biotech sell-off in spring 2014, and especially after first clinical results (see here and here) of ARC520 in HBV-infected patients did not live up to the hyped-up expectations.  90% HBsAg knockdowns had been the stated goal for a single-dose 2mg/kg.  This was despite preclinical studies which suggested that more than 2mg/kg of the endosomolytic DPC component was needed to achieve such robust knockdowns.

While my jaws certainly dropped in disbelief when I heard this, in my mind this has to be chalked up to a lack of full understanding of their company's own technology rather than gross misconduct.

…but for me it has always been subQ, subQ, subQ, extrahepatic

While I very much liked the fact that Arrowhead Research was at the very cutting edge of the ‘HBV-The-Next-HCV'  wave, what originally got me all fired up about Arrowhead Research was an OTS presentation in late 2012 where they presented impressive (robust and long-lasting) knockdown in non-human primates with a subcutaneous, most likely single-molecule version of their DPC delivery technology.  Knockdown that was more potent than anything out there (Alnylam GalNAc-STC at the time) combined with the convenience of subcutaneous instead of intravenous administration.  The latter is practiced with their more advanced two-molecule DPC version underlying ARC520 and ARC-AAT in the clinic already.

Single-molecule DPCs should also be the foundation for reaching tissues beyond the liver, making the transition back to single-molecule DPC all the more valuable.  Given that the liver has been solved for oligonucleotide therapeutics with Alnylam’s and ISIS’ GalNAcs, opening up new tissues to RNAi is obviously all the more attractive.

It is unclear what held the company back from taking the non-human primate achievements almost 3 years ago into the clinic.  Scale-up manufacturing issues rank highest on my list of possibilities.

Company guides for 2015 IND for either subQ liver or extrahepatic i.v. candidate  

During this week’s Q4 earnings conference call, the company indicated that they have finally achieved long-awaited technological breakthroughs so that we can now expect them to file an IND for either a liver target using for the first time a subcutaneous DPC formulation or an IND for an extra-hepatic target. 

Correction/clarification (2 Feb 2015): The company contacted me to clarify that what they said was that they will file an IND in 2015, and in addition to that, nominate a new development candidate that will either be extrahepatic or a subQ liver candidate.

Interestingly, if the extrahepatic program should make it to the finish line first, it would still be administered intravenously, which leads me to believe that it is a target in the kidney which I consider the only other obvious target tissue amenable to 2-molecule DPC.  If the target cell is not the proximal tubule cell, it would suggest that Arrowhead has identified a GalNAc-ASGPR-type ligand-receptor pair for the kidney.

ARWR 2015 playbook

Be it as it may, the prospect of both a highly competitive delivery technology for the liver and the availability of a new target tissue makes this a highly attractive re-entry point into ARWR.  At $6+ down from the mid $20s not even a year ago and with almost half of its valuation in cash, I do not see much downside from the 3-4mg/kg results of ARC520 to be reported in Q2 2015. 

Personally, I expect an 80-90% knockdown at 4mg/kg, but since I have no idea how the market would react to an 80% knockdown, the results are a coin toss to me, but with a somewhat larger upside (up to $14) than downside (down to $5) from here.

If the stock trades down, but somewhat dependent on the safety data, it may be an opportunity to snap up ARWR for the ARC-AAT phase I results coming up by the end of the year.  I consider ARC-AAT a very robust program with increased knockdown potency compared to ARC520 and much less ambiguity around what an X% knockdown means.

 

Right now, Arrowhead Research is an ARC520-only story and that should change once ARC-AAT becomes recognized as a medically and commercially very attractive product candidate (e.g. an orphan indication with an estimated 100.000 patient population in the US alone).  And I am convinced that I'm not the only investor to recognize subQ and extra-hepatic as the ultimate value drivers for ARWR all of which could propel the stock back to its 2014 highs over the next year.

Tekmira Presents Solid Pre-clinical Package for Upcoming HBV Clinical Candidate

Yesterday, Tekmira Pharmaceuticals presented the long-anticipated RNAi candidate for the treatment of HBV infection at the Annual Oligonucleotide Therapeutics Society conference (click here for the corresponding slide deck).  Accordingly, it was shown that TKM-HBV mediated solid knockdown of all HBV viral RNAs and proteins.  This included data in the challenging (and costly) mouse model carrying humanized livers (comprised of a mixture of mouse and human liver cells) competent of supporting the full HBV viral life-cycle.

In these mouse models, repeat doses of 0.3mg/kg resulted in ~90% reductions of both the critical HBV surface antigen (HBsAg) and viral DNA.  This may be an underestimate of the true potency of TKM-HBV as suggested by data targeting the human apoB gene in this model.  These suggested (although not proved) that it is much more difficult to achieve potent knockdowns of genes expressed in the human liver cells as compared to genes expressed in the neighbouring mouse cells of the same liver: around 10x the amount of RNAi trigger was required to achieve comparable knockdowns for the human ApoB gene relative to the mouse ApoB gene.

Based on these results, I expect an approx. ~85% knockdown of HBsAg in single-dose studies at doses that I conservatively expect to be very well tolerated (~0.2mg/kg).  As indicated by the recent clinical results with ALN-TTR02 and chimpanzee studies by Alnylam/Merck, both of which involved Tekmira's SNALP LNP delivery technology, these knockdown numbers are likely to improve with more prolonged repeat administration.

In case that Tekmira is able to safely dose escalate to higher dosages, say 0.5mg/kg, significantly more potent knockdowns can be expected.  One ought to, however, keep in mind that such higher doses are not necessarily supported by the clinical history of SNALP LNP which indicates that innate immune stimulations could become an issue around 0.3mg/kg. On the other hand, the otherwise conservative Tekmira management has been surprisingly optimistic as to 3rd gen SNALP LNP-enabled TKM-HBV being devoid of innate immunostimulatory activity.

Comparison with Arrowhead's ARC520

The results support the notion that Tekmira's HBV candidate will be more potent than Arrowhead's competing HBV candidate, ARC520.  However, there are many uncertainties in making such a prediction, most importantly the dose levels found to be safe and well tolerated in the clinical studies.  To wit, ARC520 is still dose-escalating and so far has exhibited a very good safety profile meaning that 90% (1log)-type knockdowns are well within reach, especially with repeat dosing.

Beyond potency, it should be noted that TKM-HBV comprises of 3 different RNAi triggers, both to cover the vast majority of viral sequence variation and to minimize the potential of breeding drug resistance.  To my surprise, such resistance mutations were observed in a woodchuck model that Tekmira conducted together with HBV powerhouse Bristol Myers Squibbs.

Oh, BMS? You can bet that should RNAi Therapeutics be able to meaningfully increase HBV cure rates from the low bar set by current standard of care (~15% with ill-tolerated immune stimulants), not only will BMS, but also the likes of Gilead be very interested to swoop in to pick up one or both of these compounds and/or companies.

An IND filing for TKM-HBV is on track for year-end 2014 with first drug administrations in early 2015.

Disclosure: I am long both TKMR and ARWR.

Arrowhead’s HBV Candidate Requires Further Dose Escalation

Today, we learned about some hard HBsAg knockdown numbers from the phase IIa Hong Kong study of ARC520 in chronically infected HBV patients.  The data relate to the first 2 cohorts in this ongoing dose escalation trial.  Accordingly, the mean HBsAg knockdown at nadir for the starting dose of 1mg/kg was 39% within a range of 22-57% (n=6) while it was 51% within a range of 46-59% for the 2mg/kg cohort (n=6).

ARC520 was given as a single dose to patients already stably on polymerase inhibitor entecavir.

It should be noted while numerically the improvement in knockdown from 1mg/kg to 2mg/kg was only 12%, this is likely the result of the apparent high variability at the lower dose level with the increased tightness of the knockdown range at 2mg/kg indicating that the RNAi mechanism is starting to be solidly engaged with the expectation of a steepening dose response going forward.

While clearly missing the company’s own guidance of a 1 log reduction at 2mg/kg, the good safety profile-no SAEs at all in the study with all AEs rated to be unrelated to ARC520- in addition to the steepening dose-response curve following 2mg/kg means that ARC520 is far from being out of the HBV knockdown race.  Still, the stock market over-reacted, punishing ARWR stock with a percent decrease that matched the reported knockdowns.

Although even I ended up willing myself into believing that a 70-80% knockdown was possible following a single ARC520 dose of 2mg/kg, revisiting the chimp study which involved 2 doses of ARC520 (first one at 2mg/kg then one at 3mg/kg), it should be noted that at the time the 3mg/kg dose was administered, the HBsAg levels had only declined by 50%...about the same as achieved in the phase IIa study.  It is thus possible that Arrowhead gave the 2^nd dose just as HBsAg levels were about to go up again, consistent with the already rebounding levels of HBV DNA and HBeAg in that study.

As a result, my expectations for the single 3mg/kg dose are now 70-75% based on the ~75-80% peak HBsAg knockdown in the chimp study following the 2mg/kg and 3mg/kg doses.  This also means that in order to reach that 1log knockdown goal the company had set for itself, 4mg/kg will most likely be needed.  Importantly, in the concurrent phase I dose-escalating study in healthy volunteers, this quite large amount of drug seemed to be well tolerated and the company is awaiting approval to adopt this dose in the Hong Kong study.

This projection is not much off the 90% knockdown achieved in the ARC-AAT program at 3mg/kg in non-human primates.  The improvement of this 2^nd DPC-based candidate about to enter the clinic is possibly explained by progress in the potency of 2-molecule DPC delivery technology.  I add this as today many were confused about what the interim phase IIa results meant for the platform and the value of the company.

Overall, as long as 4mg/kg is an acceptable dose from a tox point-of-view, ARC520 is still in the game to be first-in-class in HBV knockdown.  It would have been much worse if say a 70% knockdown had been reported, but worrisome safety signals emerged.  On the other hand, the continued need for a dose escalation would seem to delay Arrowhead’s broad-based phase IIb study plans, meaning that the competition, in particular Tekmira's TKM-HBV is coming closer.

At a market cap of ~$400M, the market has almost fully discounted the potential of ARC520 given the $150M+ in cash as well as the IND-ready, first-in-class ARC-AAT for which we can expect solid knockdowns in the clinic.  Interestingly, data for this candidate were selected for an oral presentation at AASLD while the ARC520 data will be in less prestigious poster form. Finally, should the single-molecule DPC which got me excited about the Arrowhead RNAi platform in the first place finally reach the clinic, it would necessitate an upward revision of the value of the company.

Disclosure: Long ARWR.  I sold most of my holdings at $11 and change given the underwhelming results and increasingly negative market reaction, but got back in below $6 when I considered the sell-off to be a gross over-reaction and imminent 3mg/kg data having the potential to surprise the market to the upside from now much lowered expectations.  Add to this ARC-AAT, the platform...

Dose of ARC520 HBV Drug Candidate to be Increased to 3mg/kg

Today, Arrowhead Research reported preliminary phase IIa safety and efficacy results of ARC520 in patients infected with HBV.  The goal of this study is to determine the level of viral knockdown, especially HBsAg, following a single dose of ARC520.

Efficacy in-line with animal studies

The results for the 1mg/kg and 2mg/kg cohorts indicate that knockdowns are in-line with what has been seen with 2 molecule DPC-enabled RNAi in non-human primates, including the HBV-infected chimpanzee.  The company could not be more specific about numbers since it is still a blinded study and the knockdown curves apparently haven’t stabilized yet after 8 weeks in the 2mg/kg cohort suggesting remarkably prolonged pharmacology.

In the chimp study, HBV load in serum was reduced by 1log at 2mg/kg, but determination of the HBsAg knockdown following a single administration was complicated by the fact that Arrowhead gave a second dose of ARC520 of 3mg/kg before the HBsAg knockdown at 2mg/kg had leveled off.  With 2 doses of 2mg/kg and 3mg/kg 2 weeks spaced apart, the final knockdown was ~80%.  This level of knockdown was likely an underestimate of the true efficacy of ARC520 since one of the two siRNAs was a mismatch and the chimp had very high viremia to start with.  For the non-human primate study with ARC-AAT, Arrowhead’s new development candidate for alpha-1 antitrypsin, the knockdown with a single dose of 1.5mg/kg was ~75%.

Taken together, I expect that the knockdown at 2mg/kg to be somewhere around 70-75%.

Arrowhead extending to higher doses

While this level of HBsAg knockdown in such a short period of time, would be superior to anything before in the HBV space, for comfort and competitive reasons, it is not all that exciting.  What is more exciting is that Arrowhead is doing what I’ve always said they should be doing, namely testing higher doses than 2mg/kg.

This is because for 2-molecule DPC-RNAi, it is the amount of the endosomolytic peptide that is rate-limiting for knockdown efficacy. As shown in animal model after animal model (e.g. Wooddell et al. 2013), the efficacy achieved with 2mg/kg was well below maximal knockdown efficacy.  However, when slightly extending the dose to 3mg/kg or 4mg/kg, the depth of knockdown increases tremendously. 

In the case of ARC-AAT for example, a 75% knockdown at 1.5mg/kg became a knockdown of 90% at 3mg/kg, which was the same knockdown as with 6mg/kg indicating that a plateau had been reached.  In the case of HBV, the plateau, based on 6mg/kg endosomolytic peptide was a virtual elimination of HBsAg in the serum.

Despite the various genes and doses, the picture is that the dose-response becomes very steep soon after 2mg/kg.  Whether it is 3mg/kg or 4mg/kg is another question.  Arrowhead is currently gearing up for these doses following phase I extension studies in healthy volunteers,   

The most important news today therefore is that 3mg/kg in healthy volunteers was as well tolerated as 1mg/kg and 2mg/kg before (4mg/kg in the works).  Indeed, it was even better tolerated since the skin reactions disappeared with the transient use of an oral anti-histamine. 

Results from the 3mg/kg cohort in this dose-finding study should be presented at or around AASLD in November. Stay tuned.

Alnylam Pulls Chair from Underneath Arrowhead Research

Machiavelli would have blushed. Feeling the heat from both RNAi and antisense competition for targets in the liver, Alnylam has made it clear in its recent McSwiggen patent-related press releases that it is determined to wipe out at least the RNAi competition through patent and contract strategy (see here and here).  

Whereas before it used to call out Tekmira/Marina/Arcturus by claiming that unlocked nucleic acid would fall under their patent estate, today it added Arrowhead Research to the club of companies that entered an RNAi trigger licensing contract with Alnylam, but then find that those contracts were not worth the paper written on: Merck, Tekmira, Arrowhead Research, and others.

In brief, the McSwiggen patents that Alnylam bought from Merck claims RNAi triggers that satisfy the following conditions:

1)      RNAi trigger with strands that have a length that fall within the classical range for siRNAs;

2)      At least 10 or more bases (often pyrimidines) of either or both strands have to be one of the following modifications: deoxy, 2’F, or 2’0-methyl.

Depending on the patents there are slight variations as to the strand lengths covered, additional requirements for phosphorothioate linkages etc.

Given the above limitations, it is strange that coincident with the acquisition of the McSwiggen patent estate, Alnylam repeatedly adds in the related press releases that it owns RNAi triggers, including those modified with acyclic nucleotide analogues (--> usiRNAs).  By contrast, it would appear that replacing any of those modifications with the very unlocked nucleic acid analogue would be a simple way of circumventing McSwiggen without any destabilizing effect on the RNAi trigger. 

Isn’t that odd?  A company in a position of strength would not do that.  But we all knew that Alnylam still wishes Tekmira to disappear from the face of the earth, so that’s not really new.

The real shocker may be to investors of Arrowhead Research (from Alnylam’s press release):

‘we intend to maximize the value of this newly issued IP solely through the advancement of ALN-HBV - our GalNAc-conjugated siRNA targeting the HBV genome for the treatment of HBV infection’

In other words, Alnylam says that the HBV target-specific license it gave to Arrowhead just 2 years ago does not include rights to the newly acquired McSwiggen patent estate.  And indeed, ARC520 by Arrowhead infringes the newly issued patent subject of today’s press release (US 8,618,277).  I will just use si-74 (one of the 2 siRNAs in ARC520) to illustrate why.

chol-siHBV-74 sense: chol-uAuCfuGfuAfgGfcAfuAfaAfuUfgGfuAf(invdT) 23 bases,

chol-siHBV-74 antisense: dTAfcCfaAfuUfuAfuGfcCfuAfcAfgdTsdT 21 bases.

I’ve highlighted the pyrimidine bases in red.  ‘f’ after a symbol stands for 2’-fluoro, small case is 2’-o-methyl, dT is deoxy-T.

1.       ‘277 claims an HBV-targeted RNAi trigger which meets the following requirements:

a)      Each strand 18-24 bases (applies to si-74);

b)      the sense strand comprises 10or more 2'-deoxy, 2'-0-methyl, 2'-deoxy-2'-fluoro, or universal base modified nucleotides (applies to si-74 where 21 nucleotides are accordingly modified in si-74 sense);

c)       the antisense strand comprises 10or more 2'-deoxy, 2'-0-methyl, 2'-deoxy-2'-fluoro, or universal base modified nucleotides (applies to si-74 where 21 nucleotides are accordingly modified in si-74 antisen);

d)      10 or more pyrimidines (i.e. U or C) of either strand modified by 2'-deoxy, 2'-0-methyl, 2'-deoxy-2'-fluoro nucleotides (applies to si-74 as each strand has at least 10 of those modifications).

Genius, by acquiring the Merck patents in January, Alnylam not only gave the withering Kreutzer-Limmer patents a new life given that Merck was in some cases the only party fighting it.  No, Alnylam thereby also pulled the chair from underneath Arrowhead given the reliance of that company on ARC520 for its valuation.  Of course, a crumbling valuation of Arrowhead could really help Alnylam as it tries to catch up and develop its own version of DPCs based on what Merck has been able to copy from Arrowhead.  Given that ‘277 will only expire in 2022/3, just waiting it out may not be an option for Arrowhead.

Sorry, Arrowhead, just because Alnylam really, really ‘dislike’ Tekmira and is calling you ‘a friend’ does not mean that you can trust them any more than Tekmira or that you are any more savvy in your drafting contracts.

Game-Changing Potency Improvement for 2-Molecule DPC by Arrowhead

At the TIDES meeting last month, Arrowhead Research presented advancements with its intravenous 2-molecule DPC delivery approach for gene silencing in the liver. By adding a protease-sensitive hydrophilic extension to the endosomolytic peptide (MLP), the company has improved both the safety of the delivery approach, and even more importantly so, the potency of 2-molecule DPC. 

The new formulation can be expected to mediate deep knockdown at the 2mg/kg endosomolytic peptide dosage at which Arrowhead Research stopped their dose-escalation for the HBV product candidate ARC520 which is based on the original 2-molecule DPC chemistry.  The reason why I have come to be on the fence regarding the future of ARC520, especially in a competitive environment, is that I consider 2mg/kg insufficient to mediate the multi-log HbsAg knockdowns that might be desirable.  If they had increased the dose to 3mg/kg, or better 4mg/kg, I would have a much more positive outlook on ARC520 (maybe this is still in the cards pending the outcome of the phase IIa result in Q3).

It is important to keep in mind that with DPC, it is the amount of endosomolytic escape agent that is rate-limiting for knockdown potency and dose-limiting for safety. The amount of (otherwise very safe) RNAi trigger by contrast is in vast excess, just to make sure that no potency is wasted. With first-generation DPC 2.0 (2-molecule), it was from around 2mg/kg for both Factor VII and HBV mRNAs that target knockdown started to take off. The fact that the same can be observed for various target genes supports the notion that as long as you have a fairly potent RNAi trigger, it is the amount of endosomolytic escape agent that determines that depth of the knockdown.

There was no reason for Arrowhead Research not to explore higher doses if they had no trepidations about the safety profile. Somewhat contrary to this notion, the company had claimed seeing no preclinical tox at up to 10mg/kg.

Nevertheless, the thought process behind the improved 2-molecule DPC version leads me to believe that safety has been a concern. This is because the reason for adding the hydrophilic extension to the endosomolytic backbone was to limit non-specific, potentially toxic interactions with membranes outside the endosomes. This minimization of non-specific membrane interactions was confirmed in a test tube membrane interaction assay.

In a second step, Arrowhead scientists sought to get rid of the hydrophilic extension in the endosome so that it would not inhibit membrane disruption there. For this, the hydrophilic extension was rendered susceptible to cleavage by proteases that are found only in endosomes. With this trick, they regained the potency of the original DPC 2.0 version, but with the improved safety feature.

Going one step further and truly making lemonade out of lemons, they replaced PEG as the hydrophilic extension with more of GalNAc targeting ligand: whereas DPC 2.0 exhibited 40% and >90% gene silencing at 1 and 3mg/kg endosomolytic agent, respectively, the improved version DPC 2.1 achieved a >90% silencing at 1mg/kg already.

Given the increase in potency, even if the safety profile was not enhanced with DPC2.1, a conservative assumption, a 2mg/kg dose should now facilitate very potent gene silencing in the liver. This bodes particularly well for the 2^nd development program that Arrowhead will disclose this month. As a follow-up to ARC520 in HBV...?  I believe the company would be better advised to wait for a single molecule, subcutaneous version, the ultimate future of DPC.

Question of the day: why does adding more GalNAc to an already GalNAc-targeted molecule enhance gene silencing?  Could it be that they added a trivalent GalNAc (like Alnylam), and not more monovalent GalNAc as on the endosomolytic backbone?

Further Possibilities for Arrowhead Phase I Dose Extension

Last night’s speculations on the reason for the phase I dose extension of the HBV RNAi phase I trial by Arrowhead Research was actually positive: they are tackling the potency issue presented by the 2mg/kg dose. 

In addition to further increase dose, it could also involve prolonging drug infusion times which we know, based on Alnylam’s GalNAc data, could optimize hepatocyte uptake by the GalNAc-targeted DPCs.

Regardless, you have got to question why extending beyond 2mg/kg had not been part of the original plan and why the study extension has not been publicly discussed, e.g. in the latest conference call.   

Extending the study to further potency is the most rose-colored scenario that one can draw.  The other scenario would have to do with safety concerns, possibly raised by regulators.  As I had discussed before, for DPC, especially the 2 molecule version, the tox-limiting element is the melittin-like peptide.  Melittin is derived from bee venom and although the MLP is not the identical sequence as melittin, there are theoretical concerns around allergic reactions.  In general, having peptides involved raises a new set of immune issues, especially when you require 2mg/kg of them.

Of note, one of the exclusion criteria for the phase IIa HongKong trial is excluding those with a history of allergy to bee venom, indicating that this has been an issue with regulators:

·         Has a history of allergy to bee venom or history of hypersensitivity reaction requiring an emergency visit to a physician or hospital and/or requirement for treatment with steroids and/or epinephrine.

So how about adding transient immune suppressant to the mix- e.g. an anti-histamine?  Nothing spectacular, a safety precaution, but once again highlighting the benefit of Arrowhead Research making advances with the single-molecule version, also for applications outside the liver (see today’s positive news around Endocyte and folate targeting for cancer as just one example of where such research could be directed at).

Potency matters, and wouldn’t it be ironic that as Tekmira is weaning itself off immune suppression (à dose-intensive TKM-EBOLA trial), on the back of developing more potent formulations, Arrowhead Research, not known as a public supporter of liposomal RNAi delivery, is adopting such?  

Potency Concerns and Tekmira Could Be Spurring Extension of Arrowhead HBV Study

As

As picked up by sooner_or_later55 on the InvestorVillage mssage board on Arrowhead Research, there have been changes to the clinicaltrials.gov entry for the phase I study of ARC520.  These indicate that the study has not been concluded as I and probably most others had assumed following the release of top-line data in October 2013 and the more detailed results presented at HepDART 2013 last December.

At that point, 36 subjects had been treated in the single-dose dose-escalating study up to 2mg/kg.  In this healthy volunteer dose-finding safety study, the most significant event possibly related to ARC520 was a case of urticarial rash of moderate intensity.  In general, the safety profile was quite encouraging for the first test of DPC delivery technology in humans.

According to the clinicaltrials.gov entry, the target enrollment was upped to 48 subjects in February 2014.  The company has more or less confirmed the renewed activity in this email to an investor ('Linda').

So why is there still activity in a trial we thought had been wrapped up?  

After all, the 2mg/kg upper dose informed the dose selection for the single-dose study in HBV-infected patients in Hong Kong which is about to commence dosing any day.

My favorite hypothesis is that it has to do with concerns around efficacy.

 

As I had discussed in my companion HBV blog before, 2mg/kg may not be enough for the type of 1log+ knockdown activity that may be necessary for the Hepatitis B surface antigen (HBsAg) knockdown-immune reactivation hypothesis to really kick in.   3, 4, and especially 6mg/kg could make a big difference according to the preclinical studies by Arrowhead Research in achieving much greater HBsAg knockdowns (it is important to focus on the dose of the melittin-like peptide when reading these papers). 

And for this indication, the deeper and the more rapid the knockdown, the more patients to benefit from such a treatment.  Say with an 80% HBsAg knockdown (my prediction for the outcome of the single-dose Hong Kong study for 2mg/kg which is the approved top dose in the study), an HBV RNAi therapeutic can achieve a cure rate of 10%.  Similar to the interferons, the best we have right now for curing HBV, but with presumably much improved tolerability.  However, with 90% knockdown (half the HBsAg left to immune suppress compared to 80%), this could jump to 30% cure rates, with 95% knockdowns to 50% etc etc.

I already hear you cringe that all this is speculation.  To this, I respond that not only all of life and particularly drug development and the stock markets are a speculation, but that it is informed by biological intuition.  You either sufficiently lift your foot off the (immune) brake or not (--> threshold).  Throw in the fact that the set point where the brakes have been released will vary due to the variability in how much individuals’ immune systems have been repressed and damaged by HBsAg, you probably end up with a sigmoidal knockdown-response curve. 

Tekmira competition

As we consider the importance of knockdown efficacy in absolute terms, it will also not have been lost on Arrowhead Research that other companies, most notably Tekmira, has been gearing up with their own HBV RNAi and antisense knockdown drug candidates.

 

I call out Tekmira because I not only own the stock, but because of the value of knockdown potency in this indication and the fact that SNALP LNP delivery is and will remain the most potent gene knockdown technology for the foreseeable future.  SNALP LNP potency has been validated in humans with over 90% target gene knockdowns in the ALN-TTR02 study using 2^nd generation technology and it is reasonable to expect that Tekmira’s most recent 3^rd generation formulations will exceed that.

Although genes vary by the ease of knocking them down, I expect HBV to be an easier target than TTR given that its genes are expressed from an episomal template, i.e. not from copies integrated into the genome.   

Add to this potency advantage the decade-long experience of Tekmira working on HBV and other viral applications (e.g. HCV, Ebola, Marburg) of SNALP RNAi (see Nature Biotech publication from 2005 using 1st generation technology), which includes the design of escape-resistant and pan-genotypic RNAi triggers and should also manifest in a more thoughtful/thorough trial design, it is not a stretch to imagine that it was partly the Tekmira competition that is spurring Arrowhead Research to presumably be testing the feasibility of higher doses now.  

Moreover, the first-mover advantage of Arrowhead may not be as big as widely assumed since Tekmira could be moving directly into single-/multi-dose ascending studies in HBV infected patients in early 2015, just months behind, if at all, the Arrowhead multi-dose phase IIb study.  

The prospect of higher cure rates will not only inform the RNAi drugs a patient will be taking in the future, it may also divert investments today in an area that is rapidly gaining in investor and pharmaceutical interest.  After all, even just 10 million of the ~300 million HBV patients that would require treatment for medical reasons and could afford it would make for a ~10 million*$20k = $200B market, and that could well be an underestimate...  

ARC520 for Chronic HepB: The Immune System…It’s Reactivating!

Usually, immune stimulation which manifest itself as flu-like symptoms and the like is something that you do not want to see with an RNAi Therapeutic.  Having said that, there are settings in which you want to see immune stimulations.  This is also the case for the treatment of chronic HBV with a HBsAg knockdown approach. 

ARC520 is the lead candidate in this effort and yesterday the sponsor, Arrowhead Research, presented very exciting data in a chronically infected chimpanzee that had been treated with the RNAi agent.  The data are not only exciting because they presumably represent the fastest reduction of the HBsAg antigen ever seen in a real infection (note: only the chimpanzee is thought to reflect human HBV infection), no, what is even more exciting is that the data are consistent with a HBsAg-specific T-cell immune response.  

As the success of an HBsAg knockdown approach for the treatment of chronic HBV hinges on the hypothesis that by knocking down HBsAg it might be possible for the body to re-activate an adaptive immune response against the virus, the data in my mind are the biggest de-risking event in the development of ARC520.

The data

At the 2013 Liver Meeting of the AASLD in Washington DC, Arrowhead Research presented more detailed data on the chimpanzee that had been treated with ARC520.  Before that we had known that two doses of ARC520 (one of 2.0mg/kg and one of 3.0mg/kg) spaced 14 days apart was able to knock down HBsAg by ~80%, HBeAg by over 90%, and serum HBV DNA by 1-2logs.  The important knockdown here is that of HBsAg, an otherwise ‘undruggable’ target.  Reverse transcriptase inhibitors such as entecavir are not able to meaningfully reduce HBsAg.

The discrepancy of the degrees of HBsAg and HBeAg/HBV DNA knockdowns is likely explained by the prolonged half-life of HBsAg.  Repeat dosing for an extended period of time should lead to even further reductions in HBsAg.  Moreover, the treated chimpanzee was an unusually tough challenge, because old (HBV for over 35 years alone), heavy and with extremely high viremia (>10exp10 genomes per ml). 

Importantly, as predicted by the HBsAg knockdown-immune reactivation hypothesis, there was an apparent T cell-mediated anti-HBsAg immune response shortly after peak HBsAg knockdown levels were reached.  The peak HBsAG knockdown occurred somewhere between ~days 25 and 38 and there was a flare-up in liver enzymes around day 43.   

 

A liver-enzyme flare-up would be expected when anti-HBsAg cytotoxic T-cells start to attack HBV-infected hepatocytes.  Consistent with it being due to a T-cell response, markers of T cell activation, most notably interferon gamma, were also up-regulated around the time of the flare-up.  Interestingly, liver enzyme levels did not fully revert back to normal, but remained somewhat elevated compared to base-line suggesting that the RNAi knockdown kicked into gear a more persistent immune response.

Such delayed dynamics are consistent with what is seen following successful treatment with interferons.  In the ~5-10% of cases where interferons are able to achieve the gold standard HBsAg elimination (in the presence or absence of HBsAg seroconversion), the elimination usually occurs after the ~52 week course of interferon, in many cases years afterwards.

Of course, the present chimpanzee data do not show an elimination of HBsAg.  While I do not exclude the possibility that Arrowhead Research will come back in another 3 months or so to report that the immune system has finally overcome HBsAg, I prefer to keep expectations for such an event low and instead consider the present data as a nice starting point that indeed ARC520 is able rekindle the desired immune response after only two doses over 14 days.

Why it is unlikely to be a non-specific immune response

It is very important here to emphasize that what we are seeing here was not due to a non-specific innate immune response triggered by an immunostimulatory RNAi agent.  Similarly, some RNAi delivery strategies run the risk of causing direct damage to hepatocytes which would also manifest itself by increases in liver enzymes.

The most convincing argument to me is in the timing of the flare-up and cytokine elevations.  While non-specific responses usually occur in the hours and days immediately following RNAi administration, in this case, they occurred 3-5 weeks after the second dose.

Consistent with a ‘clean’ safety profile of ARC520, no such liver enzyme and cytokine elevations were seen in the phase I volunteer study for which Arrowhead reported initial safety data a month ago (2mg/kg highest dose in that study).  Nevertheless, as those data only focused on the safety in the first few days following drug administration for the above reasons and the 30-day follow-up still remains to be reported, one formally cannot exclude the possibility that the unique DPC chemistry is associated with liver damage and the like only weeks after drug administration.  I consider this quite unlikely though.

Going along with this theme, I expect the phase IIa study which will involve infected patients in Hong Kong and is scheduled to initiate enrollment in early 2014 to be ARC520 on top of an RT inhibitor such as entecavir.  As RT inhibitors stabilize the liver of HepB patients and in light of the phase I data, any flare-ups that would be seen in that single-dose study would presumably be the result of HBsAg-specific immune reactivation.  

Lots of exciting catalysts ahead over the next 6 months and who knows, due to intrapatient variability, maybe there will be a cure or two in the phase IIa study already.  

PS: For more background on RNAi knockdown for HBV and ARC520, please visit my cureHBV companion blog. 

ISIS/GSK and Tekmira Come Out with HBV Knockdown Plans

If you did not appreciate the value the pharmaceutical industry has come to place on the HBsAg knockdown concept for achieving a functional cure for chronic Hepatitis B (HBV) infection, the last two days will have woken you up. 

Yesterday, ISIS Pharmaceuticals reported that it had received a $7M milestone payment related to the development of an antiviral RNaseH development candidate (ISIS-GSK3Rx, aka ISIS-HBVRx) which, although undisclosed for competitive reasons, hasgot to be for HBV.  And today, Tekmira publicly announced that they will file an IND for an HBV-RNAi candidate in 2014 while hinting at the partnering potential of such a treatment candidate.

Arrowhead Research is thus not alone in their efforts any more.  Coincidentally, Arrowhead reported today the completion of their enrollment of the phase I single-dose, healthy volunteer study with ARC520, their DPC-delivered candidate for chronic HBV.  Accordingly, the dose escalation was able to run through all the pre-planned 6 dose cohorts up to the top dose of 2.0mg/kg. 

Apparently, there were no signs of significant dose-related toxicities.  The only finding of concern among the 36 volunteers, 24 of which received drug, was 2 cases of lightheadedness of uncertain clinical relevance.  As these occurred at the highest dose, it seems that the company suspects that it could have been drug-related although the study remains blinded for follow-up.

A dose of 2mg/kg without any serious adverse events or dose-limiting toxicities is a great start for DPC delivery technology.  This is especially the case when one considers that the single-molecule subQ version of DPC that I hope will form the basis for the upcoming pipeline candidates, except for the next one perhaps, will be much more potent than the two-molecule version of intravenously delivered ARC520 based on the non-human primate data presented at last year's OTS meeting.

With 2mg/kg of ARC520, I further believe that HBsAg knockdowns of over 90% are likely.  The biggest challenge going forward with this program will be setting a knockdown goal and getting the dose and dose frequency right.

For more about increasingly lively HBsAg knockdown for the treatment of chronic HBV, please follow my HBV Knockdown Blog.

Also today: Tekmira and Arrowhead Research Rapidly Filling Pipeline

In addition to chronic HBV, Tekmira further disclosed development plans for candidates addressing Marburg infection, alcoholism, hypertriglyceridemia and severe orphan glycogen disorders.  The presentation made clear that the company has not sat on its hands since the settlement with Alnylam and is close to having at least 4 drug candidates in active clinical development by early 2015 (TKM-PLK1, TKM-EBOLA, TKM-ALDH2, TKM-HBV).

Meanwhile, previously $200M market cap Arrowhead Research has succeeded with a $60M private placement without having had to offer a discount.  In my opinion, this reflects the broadened investor interest in the space and makes Arrowhead an even better investment as it can now, freed from financial constraints, immediately pursue some of the attractive liver targets with best-in-class solutions and beyond.

Wondering whether we are in an RNA Therapeutics bubble?  Then I suggest you get my OTS 2013 meeting report.  Dare I say that oligonucleotide therapeutics is a more capable and exciting technology than monoclonal antibodies already?  At least if you believe orphan diseases are the way to go in today's pharmaceutical drug development, there is no doubt about it coming out of the meeting. 

Alnylam’s GalNAcs As Cholesterol-siRNA 2.0

That Alnylam bets its future on GalNAc-siRNAs is remarkable and indicates that the company feels the technology is clinically viable.  Accordingly, the preclinical animal data leaves open the possibility that the required volume of an effective dose of ALN-TTRsc, the first GalNAc-based clinical candidate, can be administered in a volume of 1ml or less, the stated goal of the company (results to be presented at HFSA, Sep22-25).  

While I view ALN-TTRsc as a cliffhanger in terms of commercial viability, not just because of the volume issue but also in light of the likely more effective SNALP option in the form of ALN-TTR02, the potency of GalNAc-based ALN-AT3 for hemophilia looks quite adequate.

Alnylam’s claim that a simple ligand-siRNA conjugate was able to mediate gene silencing in vivo required a rethinking of RNAi delivery by many since similar efforts involving especially aptamer-siRNA conjugates have been ‘viewed with skepticism’ to put it nicely.

Did Alnylam mislead the competition?

If you are a student and your funding body just spent $3000 to send you to a conference to learn about your subject, you might be forgiven if you came away with the notion that simple siRNA-conjuates such as Alnylam’s GalNAc-siRNAs can be effective (see e.g. slide 16 of the presentation by John Maraganore at the OTS last year).  The trick apparently is that with a magic ligand-receptor pair such as GalNAc-ASGPR all you need is to conjugate an RNAi trigger chemically modified for stability.  

Of course, the imaginary student here is only collateral damage as the real target audience of a presentation by Alnylam is its investors, potential partners, and competition.

As such, it may not surprise that according to patent application US2012/0136042A1, a simple GalNAc-siRNA conjugate has no activity on its own.  

Instead, silencing activity critically depends on the molecule also having a cholesterol (=lipophilic group) attached to it.  Since Alnylam had worked on such cholesterol-siRNA conjugates before (Soutschek et al. 2004), what now appears to be the actual GalNAc-siRNA structure can be viewed as an evolution of the cholesterol-siRNA which showed knockdown activity only at doses of 50mg/kg and higher.

DPCs by Arrowhead Research Take another Step

The 10-20 fold gains in potency with the addition of the GalNAc ligand shows how comparatively inefficient ApoE/LDL-based uptake systems are for liver-directed RNAi delivery.  The reason why SNALP is still more effective than GalNAc-siRNA is because cholesterol-siRNAs do an even poorer job when it comes to the next rate-limiting step in delivery: endosomal release.

With Arrowhead’s Dynamic Polyconjugates (DPCs) for liver-directed knockdown, you combine the best of both worlds: effective attachment to hepatocytes via multivalent GalNAc-ASGPR interactions and effective endosomal release through endosomolytic polymers/peptides.  

In fact, because of the potent chemistries used for the latter step, the endosomolytic agent has to be masked which initially made me a bit wary about the safety of DPCs (note: clinical safety data for ARC520 are about to be released, probably in October, and the preclinical safety performance looks good so far). 

According to Arrowhead’s research, this combination allows for more than 500-fold potency gains compared to cholesterol-siRNAs (Wong et al. 2012).  

Because the ratio of siRNA to endosomal-release peptide has to be held constant in the clinical studies of ARC520 which is based on the 2-molecule DPC version, you will not see these improvements in potency translated into clinical practice.  This is not all that critical anyway since ARC520 is administered intravenously and cholesterol-siRNAs should not be toxic even at elevated dosages.  Still, while I’m excited about ARC520 for all the stated reasons (see the HBV Knockdown Blog), for the sake of Arrowhead’s platform, I really would like to see the elegant single-molecule DPCs enter development.  This should not take much longer given the advanced data presented at OTS 2012.

But hey, maybe they have already advanced into development, but they are just being referred to as 'GalNAc-siRNA'.

Arrowhead Research: The Next Two Years

Over the last year, Arrowhead Research has undergone a corporate transformation putting it into a position to develop important drugs and create sustained shareholder value.   After what must be a decade of chasing after the latest and hottest in nanotechnology, the company finally appears to have realized that it is in possession of a platform technology that can deliver not just dreams, but actual life-changing products: Dynamic Polyconjugates.

In the following, I will describe how I see the company go about creating value over the next 2 years.

ARC520, ARC520, ARC520

The current corporate messaging is clear: it’s all about the company’s potential cure for chronic hepatitis B, ARC520 (for review, follow this blog and Arrowhead's investor day).  ARC520, of course, is enabled by DPC delivery.  However, as its own experience and that of fellow Tekmira, Silence Therapeutics, and others have shown, the financial markets do not care much about valuing the key enabling delivery technologies in RNAi Therapeutics.  As a result, the company is focusing public attention on its lead product candidate which by now probably has commenced dosing in the first clinical study.

ARC520 has the makings of the start of an enormous franchise (note: I expect ARC520 to be followed by other versions should initial clinical results bear out the immune reactivation hypothesis).  Chronic HepB, a disease affecting over 300 million globally, has to be considered an incurable infection and there has not been an experimental medicine that can knock down the key surface antigen (HBsAg) as rapidly and potently as ARC520.  By knocking down HBsAg, it is hoped that the immune system can be reawakened to seroconvert against HBsAg which would be considered a functional cure.

We should find out whether the hypothesis is correct with the results from the first multi-dose phase IIb study which I expect to come in by the end of 2014/early 2015.  There is a slight possibility, however, that first functional cures may be observed in the single-dose phase IIa Hong Kong study with results in less than a year.

Beefing up the DPC-enabled pipeline

While ARC520 has enormous potential for which spelling out the market size would yield ridiculously high numbers, there are two main risks that need to be overcome. 

The first one is the safety of a DPC-enabled RNAi Therapeutics.  DPC has never been tested in Man before, so you always cross your fingers as it enters the clinic.  Nevertheless, the company has repeatedly reported in the peer-reviewed literature and otherwise that the safety profile, from rodents to a chimpanzee, is looking clean.  This gives me confidence that safety might actually be a strong point of the liver-targeted, short-circulating DPCs.

The second one is about the validity of the HBsAg immune reactivation hypothesis.  Key opinion leaders in the chronic HepB field support it, but as long as the direct link has not been demonstrated, it remains a risk.

As a result, the company would not do justice to DPC technology or itself by making ARC520 multi-dose results a binary event.  Instead, Arrowhead Research should add one or two additional DPC candidates to the pipeline by the end of 2014 when critical results for ARC520 are to be expected.

The first one is expected to be announced in 2013.  This should be another liver-targeted, two-molecule, intravenously infused DPC RNAi Therapeutics.  As Alnylam’s efforts show, there are numerous attractive, often orphan indications that involve gene expression in the liver.

In 2014, I would hope that a liver-targeted candidate based on their newly developedsubcutaneous DPC technology will be added to the pipeline.  Arrowhead presented first such subQ data in late 2012 so that with a few CMC refinements and gene specific development work, they might have a candidate in 2014.

Adding a subcutaneously administered DPC candidate to the pipeline would not only be progress in that this route of administration opens up new therapeutic opportunities, it would also mean that Arrowhead succeeded at where it historically has struggled with: making a single-molecule DPC at high enough yield and which can be properly analyzed.  Remember, Merck at the 2012 OTS meeting more or less announced single-molecule DPCs to be their RNAi delivery dream.  This means that Big Pharma will be and probably are already queuing up for the technology.  Big Pharma loves single-molecule solutions.

Going after the TTR cake: a proven path of value creation

Going by the analyst reports, more than half of Alnylam’s market capitalization ($2.4B) rests on their TTR amyloidosis pipeline: intravenous SNALP-based ALN-TTR02 in mid-stage phase II, and GalNAc subcutaneously delivered ALN-TTRsc in early phase I.  I believe that Arrowhead can create a candidate that is superior to both of them and thus claim a good part of that ~$1.5B in a relatively short period of time (~1.5 years from first IND to generate ALN-TTR02-type data).  Compared to ALN-TTR02, the subcutaneous mode, but equal potency could make it the preferred RNAi Therapeutic.  On safety, we have to wait, but this could be another differentiator.  Compared to ALN-TTRsc, improved efficacy and less frequent administration with lower injection volumes would make an ARC-TTRsc the winner in the market place.  Compared to phosphorothioate antisense-based ISIS-TTRsc, the winning differentiators would be potency and safety.

Arrowhead is a $70M market cap company.  It would seem like a no-brainer to go after the $1.5B market cap attributed to early-stage TTR amyloidosis data for their first subQ IND.  With a superior product and quite different molecular composition (delivery chemistry, possibly Dicer-substrate RNAi trigger) and superior clinical performance, no orphan drug designation by Alnylam or ISIS could hold it back.

Price Target: $30

In summary, by H2 2015, the time current funding is expected to last, Arrowhead Research could have demonstration of functional cure for chronic HepB (I won’t even start trying to value that), two additional product development candidates in the clinic one of which likely with a value between $1-2B, and a potent single-molecule delivery platform that will attract much attention in the industry. 

The achievements of these goals do not assume heroic operational feats.  Even in a worse-case scenario, namely that the immune reactivation hypothesis fails to live up to its expectations, ARC520 should add to the evidence of DPCs being a strong delivery platform thereby also de-risking the other two pipeline candidates.

Anybody laughing at a price target that is 15x that of its current price, by somebody who has put most of his stock market investment in that company at that, should perform an apples-to-apples comparison of clinical programs (ARC520 vs ALN-TTR) and delivery technologies (DPC vs GalNAc) with $2.4B market cap Alnylam.  Could it be that Wall Street has it all wrong?  Of course, Arrowhead Research is not the chosen one in RNAi Therapeutics on Wall Street, but I believe that clinical data on chronic HepB could lower Arrowhead’s cost of capital such that by mid-2015, a financing or business development deal would be on much improved terms.