GSK Partners with Wave Life Sciences for Access to RNA Editing

This week, we have seen further confirmation of the increasingly recognized value within the pharmaceutical industry of Oligonucleotide Therapeutics in general, and RNA Editing in particular.

In a landmark deal, GSK obtained an exclusive license from Wave Life Sciences to the RNA Editing industry’s lead, albeit still preclinical WVE-006 development candidate for the treatment of alpha-1-antitrypsin disease.  In addition, GSK has the right to evaluate Wave’s oligonucleotide platform (editing, splice modulation, and RNAi/ASO silencing modalities) to then advance up to 8 programs into development.

In return, Wave will receive $120M in upfront cash, another $50M in an equity investment, and the potential to earn up to $3.3B in development and commercial milestones in addition to royalties on drug sales.  Because of its more advanced stage in development, WVE-006 stands to earn relatively more in milestones ($525M) and royalties (tiered double-digit, up to the high teens).

While I view Wave doing this deal largely to feed its voracious appetite for cash to feed what I consider to be less exciting clinical work in Huntington’s (ASO knockdown) and Duchenne muscular dystrophy (exon skipping), GSK will bring its genetics-based target insights to the collaboration table so that Wave could advance up to 3 related programs that it would wholly own.

Seeing the AATD program go to GSK was a disappointment to me at first.  Ultimately, I thought that this program would end up shouldering the weight of Wave’s market cap as the company’s lead program once the current clinical pipeline will meet its expected fate.  However, during the discussion of the deal the company’s CEO Paul Bolno made it clear that not only is GSK much better suited to advance ‘006 especially with regards to its lung-related endpoints, it is RNA Editing and gene upregulation that Wave considers the most valuable elements of its PRISM oligonucleotide platform and that it wants to maintain control over.

Gene upregulation can be achieved by either masking destabilizing sequences in an (m)RNA by antisense oligonucleotide, or by using RNA Editing to disrupt those or slightly change the protein to make it more stable.

After the 2021 deals between Shape Therapeutics andRoche (neuroscience, DNA-directed RNA Editing) and ProQR and Eli Lilly, this marks the third such Big Pharma deal in the ADAR sector.  It is reminiscent of the 2004-5 phase when Big Pharma started to take note of RNAi through a few measured investments.  

Expect the noise and excitement to grow over 2023 as RNA Editing approaches the clinic.  But unlike RNAi, a lot of delivery work has already been undertaken so that the trajectory of RNA Editing should be smoother from a technology point of view.  Only yesterday, Avidity Biosciences reported on the  expansion of the targetable tissue universe to the muscle and Arrowhead Pharmaceuticals is about to report important data on targeting RNAi to the lung.

Big Pharma Investments in RNA Editing

When it comes to new platform technologies, investors generally like to see their belief validated by large pharmaceutical companies.  In addition to confirming the soundness of the scientific approach, in times when access to capital is constrained, such partnerships also provide an important financing source.

In RNA Editing, Venture Capital certainly has taken the charge (and risk) by investing close to $600M in Series As and Bs spread between Korro Bio, Shape Therapeutics, EdiGene and ADARx (the last two are not pure-plays) largely in 2020-1.  There have, however, been two notable Big Pharma deals that materialized in the second half of 2021.

 

Shape Therapeutics-Roche

In August 2021, Shape Therapeutics announced its first Big Pharma partnership.  Shape apparently has been working on the DNA-directed expression of editing RNAs harnessing endogenous ADARs, especially in the CNS.  Their favourite delivery vehicle is AAV viral delivery.

It is an interesting approach, since despite of going through the trouble of gene therapy-type delivery, they choose not to bring exogenous ADARs along for the ride.  This makes sense since overexpression of ADARs is linked to widespread off-targeting and the molecular size of ADAR may be a vector capacity issue, too.  As it would have involved essentially naturally occurring ADARs (plus/minus a few optimizing mutations), the cost in terms of immunogenicity though may have been tolerable.  This is in stark contrast to genome editing technologies like CRISPR where, because of delivery in the CNS, you would likely have to deal with the extended expression of entirely foreign proteins.

Shape and Roche will tackle a number of neuronal diseases together, likely Alzheimer’s, Parkinson’s and more rare indications like Rett Syndrome.  Of note, Roche has suffered a major setback in oligonucleotide-based neurodegenerative drug development when efficacy and tox issues derailed a late-stage Huntington’s disease drug candidate based on the intrathecal administration of phosphorothioate antisense molecules.  So for them opting for AAV-based expression of targeting RNAs is worth taking note of.

Rett Syndrome is a truly intriguing indication highlighting a few of the unique advantages of RNA Editing.  Rett Syndrome affects ~1 in 10-15k female births.  It is a severe, early onset neurodevelopmental disorder caused by too little MeCP2 expression due to mostly spontaneous (as opposed to inherited) mutations.  Nevertheless, persons suffering from this X-linked gene condition can still live into their 40s and 50s- with severe disabilities. There are no drugs approved specifically addressing Rett Syndrome. 

Rett Syndrome would seem like an ideal candidate for the development of gene therapy.  What makes, however, gene therapy particularly challenging in this setting is that while too little of the master epigenetic regulator that MeCP2 is gives you Rett Syndrome, too much of it is neurotoxic.  Add X chromosome inactivation mosaicism into the mix and the therapeutic window of MeCP2 expression narrows dramatically:

for each (neuronal) cell just enough to give you MeCP2 function, but not more, certainly not >2x normal MeCP2 expression.

As a technology that does not change the rate of gene transcription, RNA Editing is ideally suited for Rett Syndrome and it is estimated that 40-50% of cases can be addressed by the technology.  The downside is that in order to address all of those mutations, similar to Duchenne’s and exon skipping, a number of RNA editing molecules would have to be developed.

 

ProQR-Eli Lilly

A month following the Shape deal, ProQR announced a partnership with Eli Lilly for up to 5 targets in the liver and CNS. This was accompanied by a $20M upfront consideration and a $30M equity investment.

Unlike Shape, ProQR (pronounced ‘Procure’) is pursuing a more traditional approach to drug development in the form of synthetic oligonucleotides for A-to-I editing.  Eli Lilly has shown great commitment to RNA Therapeutics for a while now with for example two RNAi compounds licensed from Dicerna (now part of Novo Nordisk) in clinical development for two cardiometabolic indications and a recent whopping $700M investment into a Genetic Medicine research site for RNA- and DNA-based drug development.  In the CNS, Eli Lilly will be interested in applying the new platform to the usual suspects including Alzheimer’s and pain.

 

As RNA Editing is moving into the clinic (Wave Life Sciences, alpha-1-antitrypsin) and more people hear about the platform and come up with great ideas of where to apply it, but also as oligonucleotide therapeutics more and more becomes part of the mainstream pharma mindset, I expect additional Big Pharma deals to materialize soon.

Big Pharma Panic over Nucleic Acid Therapeutics

News this week of Roche licensing antisense technology from Santaris 3 years after having written down a related $500M+ investment in RNAi Therapeutics, is symptomatic for the apparent panic and resulting schizophrenic behavior that grips Big Pharma when it comes to Nucleic Acid Therapeutics (NATs).  Can NATs help rekindle their flagging discovery efforts or will NAT companies leave them in the dust as they advance to the top of the Pharma food chain?   

Meanwhile, Big Biotech in the form of BiogenIdec has also recognized that NATs are critical for their growth in the form of a partnership with Zinc Finger Nuclease specialist Sangamo Biosciences for the treatment of red blood cell disorders (sickle cell and beta-thalassemia).  This follows significant (~$150-200M) recent investments in ISIS’ antisense technology for diseases of the CNS and a deal with microRNA Rx company Regulus Therapeutics.

If you sit back and consider the clinical and preclinical developments in the space (look out for the upcoming RNAi Therapeutics Investment Guide 2014), there can be no doubt that nucleic acid therapeutics (including oligonucleotide therapeutics) are about to materialize as the 3^rd major chemical class of drugs following small molecules and recombinant proteins.  In fact, their mechanistic versatility (gene up- and down-regulation, modulation of RNA processing etc) means that in a few decades, there will be many more NAT-based new molecular entities than small molecules and recombinant proteins combined, in many cases for genetically defined patient populations.  

Interestingly, in 2013, only 2 monoclonal antibody new molecular entities (NMEs) received marketing authorization by the FDA (see here).

Investors do not have to take such a very long view as a number of commercially attractive Oligonucleotide Therapeutics are gearing up to enter the market, including for TTR amyloidosis, Hepatitis B infection, spinal muscular atrophy, and hypertriglyceridemia.

For those interested in the more particular relevance of yesterday’s deals to RNAi Therapeutics stocks, the Roche-Santaris deal ($10M in upfront plus the usual biobucks and royalties) represents another blow to ISIS’ claim that it owns the IP in the space, especially in light of the ongoing litigations and patent battles between the companies and the fact that not long ago, Roche partnered with ISIS on Huntington’s Disease.  This should provide further comfort to those, including myself, speculating that Marina Biotech’s CRN chemistry is a valid equivalent, if not superior alternative to the ISIS and Santaris antisense chemistries.  Regarding the deal between Sangamo and BiogenIdec ($20M upfront plus the usual biobucks and royalties), it is a validation of the attractiveness of the hemoglobinopathy market that forms an important part of Alnylam’s pipeline options.

In additional RNAi Therapeutics developments...

Bad news for Benitec

In a recent paper by Lisowski et al. from Stanford (Kay lab) which appeared in Nature, very strong evidence was presented that the AAV8 serotype is far from ideal when it comes to transducing human hepatocytes.  This is in contrast to preclinical results mainly in mice that have shown highly efficient, almost 100% transduction of hepatocytes, the transduction level probably needed to achieve an RNAi cure of HepC.

Based on the preclinical work, the AAV8 serotype was readily embraced by gene therapists and adopted for various liver-related clinical studies. Surprisingly, however, the data so far in hemophilia did not support a significant advantage of AAV8 over the old AAV2 workhorse.

The study by Lisowski et al. shows that this is very likely the result of poor AAV8 transduction of human hepatocytes.  Among the multiple striking results, in mice with chimeric human/mouse livers, basically only the murine hepatocytes could be transduced whereas the adjacent human hepatocytes were not.

This is an unfortunate development that Benitec cannot be held responsible for.  It could be a double-whammy though for the company as in addition to the commercial concerns about the HepC indication for TT-034, results from the ongoing phase I study may not even support the delivery technology for other liver applications.  There is, however, light at the end of the tunnel as there are plenty new AAV serotype that appear to be as good in transducing human hepatocytes as AAV8 is in transducing murine hepatocytes.

A Sign That Big Pharma Could Recognize the Low-Hanging RNAi Therapeutics Fruits

It was with much amusement and head-shaking disbelief that I read the Li et al. paper oncancer RNAi Therapeutics  development from Abbott.   The amusement stemmed from the fact that in the paper, the authors had come to the obvious conclusion: current technologies should allow you to develop real-world therapeutics based on the RNAi platform if only you judiciously combine the delivery platform with the right target and indication.  Duh…

As such, Abbott is representative of the various Big Pharma companies that guttered in-house RNAi Therapeutics development as they chose to only see the challenges instead of realizing the obvious opportunities.  Even those still in the game like Merck have long liked to go around and teach everyone how super-diligent, but super-slow their RNAi Therapeutics game strategy was. 

As RNAi Therapeutics have created market values at lightning speed (Alnylam now at a market cap of $3.5 billion), not based on just hype, but based on paths well-trodden by orphan drug companies, I expect more and more Big Pharmas to re-think their strategies.  Maybe even listen to this blogger who has always advocated a pipeline strategy that is based on where your delivery technologies can go to, instead of the traditional cart-before-the-ox-I-want-the-next-blockbuster-pill wishful thinking by people who may have risen to the corporate tops in companies like Coca Cola.
  

C’mon scientists from Merck, Novartis, and Takeda.  Inside yourself is an innovator that finally wants to see how your technology performs in humans.  Instead of just focusing on what could go wrong, don’t you also have an obligation to address diseases of high unmet medical need? And if not you, then who is going to transform your organization into a dynamic science-driven one that you can identify with as a scientist?  On a more practical level, I cannot see how many of you will be with your present employer in 2-3 years if you don’t have the goods to show.  Look at what happened to your peers from AstraZeneca whose last job it was to look for partnership in the more innovative pure-play RNA Therapeutics space before they were given the boot. 

Bullish on RNAi Therapeutics

Attending the Oligonucleotide Therapeutics Society meeting last week in Boston, I could sense a new bullishness around RNAi Therapeutics like I haven’t in a long time.   

Big Pharma: Tipping the Scales in Favor of RNAi Therapeutics

Over the last year, we have been witness to the clinical successes of Tekmira’s SNALP delivery that literally saved the sector.  After nightmarish years, these results had investors enjoy the doubling and tripling of the share prices of companies like Alnylam, Tekmira, and even non-SNALP players such as Silence Therapeutics.

For the next leg of expanding investments in RNAi Therapeutics, a renewed, publicly visible commitment by Big Pharma would be important.  With Genzyme taking a license to Alnylam’s transthyretin amyloidosis program, a first step in that direction has been just made.  On the platform side, it is worth noting that the two most significant Big Pharma players in RNAi Therapeutics, Merck and Novartis, were also represented at the conference.  One can only hope that the current RNAi Therapeutics clinical and scientific tailwind will give their internal champions the ammunition to push the technology into the clinic in the next 2-3 years and therefore escape the Sword of Damocles that surely must have been felt dangling above them.

Unfortunately, if these two companies, like so many others it seems, big and small, insist on using ‘their’ own delivery technologies, chances for that will be much reduced.  With all due respect, but the presentation on RNAi delivery by Merck was just a review of the most advanced systemic delivery technologies, SNALP (Tekmira), DPCs (Arrowhead Research), and GalNAcs (Alnylam) exemplified by Merck’s homebrew versions.  Somebody needs to show me the math behind it- I just don’t get it.  The only explanation for me is pride and the resistance against collaborating after having invested internally so much.

A re-commitment towards RNAi Therapeutics should also be at the expense of ‘naked’ RNaseH antisense.  Although in his keynote speech, Alnylam’s CEO made a point of congratulating ISIS CEO Stan Crooke (sitting in the first row) on the recent mipomersen Advisory Panel, there was considerable talk during the conference about antisense-related toxicity, also as regards the high-affinity versions.   And even Stan Crooke could not help but admit that the RNAi Therapeutics results have ‘exceeded [his] expectations’.  However, since ISIS claims ownership over RNAi Therapeutics, as it does indeed over most of oligonucleotide therapeutics anyway, his pain should be limited if indeed he believes what he is saying [note: Dr. Crooke in discussing the safety of mipomersen went as far as saying that there has been no imbalance in its safety profile compared to placebo, and when there was an imbalance, it was in favor of mipomersen...for a starkly different view, see here].

A Breath of Fresh Air in Delivery

A conference highlight were the new results from Arrowhead Research on their new DPC delivery, a conjugate approach.  Potent gene knockdowns in the liver with an apparently reassuring safety profile in non-human primates using subcutaneous delivery is certainly deserving of some serious attention.  Having had systemic delivery of synthetic RNAi triggers almost for themselves for the last few years, Tekmira seems to be finally getting some company- although in terms of validation, SNALP is still years ahead and more de-risked.  Such increased diversity of approaches should also be good for attracting general interest to the sector as it would be viewed as more vibrant and with more disease opportunities.

5 Reasons to be Bullish on RNAi Therapeutics

1)      Clinical results show that RNAi Therapeutics in Man can be made to work (Tekmira’s SNALP delivery);

2)      RNAi Therapeutics ideally suited to address orphan disease, the hottest category in drug development;

3)      RNAi Therapeutics has taken the lead over RNaseH antisense for gene knockdown;

4)      Big Pharma coming back to RNAi Therapeutics;

      5)      Vibrancy of sector increasing (e.g. recent results on Arrowhead’s DPC technology). 

A Side Note on the Conference

To some degree reflecting the increasing maturity of Oligonucleotide Therapeutics, the 4-day program did not include important programs in the field.  Not only was Tekmira notably missing, but also efforts such as Dynavax’ important HepB vaccine candidate that could soon allow oligonucleotide ‘therapeutics’ to touch many lives.  Moreover, the industry-academia balance was tilted in favor of industry like I have not seen before.   

Big Pharma Support for RNAi Therapeutics Growing

In case you have not noticed: “Big Pharma” is slowly coming back to RNAi Therapeutics. This marks a fourth phase in the delicate relationship of the small pure-play RNAi Therapeutics companies with their larger counterparts.

The relationship in the first phase (2002-5) may be characterized as one of benign neglect and certain curiosity. Sure, RNAi was a hot emerging scientific area, but Big Pharma preferred to let the small companies kick the tires and take the risk while continuing to do what they were most comfortable with: small molecules along with some monoclonal antibody work. The patent cliff still seemed like a management generation away.

In the second phase (2005-8), some pharmaceutical companies like Novartis and Merck started to see the light. It became apparent to them that as small molecules alone won’t cut it any more that a technology like RNAi Therapeutics may ideally fit into the personalized medicine paradigm of the future. Following their initial investments in the space, other companies like Roche, Pfizer, and Takeda began to worry about being left behind and looked to catch up, in some cases frantically so. The Nobel Prize added fuel to the fire and a small bubble developed where investments were often not made based on the best science. Big Pharma companies wanted to be seen as being at the fore-front of this technology and were happy to advertise their association with the technology in public.

The US real estate-triggered global financial meltdown marked the beginning of the 3^rd phase (2008-2011). If that and subsequent widespread healthcare rationing did not inflict enough pain on the pharmaceutical industry, major blockbusters were falling off the patent cliff. Investors in Big Pharma demanded much reduced R&D spending and instead share buy-backs and dividends. Ironically based on the productivity with small molecules, it was often believed that R&D per se is a money-losing proposition. It’s therefore somewhat understandable that companies like Merck and Novartis that continued to put considerable resources into RNAi Therapeutics preferred to keep this quiet. In addition to pacifying shareholders, another objective for their secretiveness was, of course, to cool down market prices for the technology. The interview with Alan Sachs in Xconomy early last year about Merck’s view of RNAi technology as a target validation technology initially was a good example of this policy.

RNAi Therapeutics did not fare well in this climate. As larger companies realized that they made some bad investments in the technologies, some probably feeling that they have been deceived by some of the pure-play companies. I believe that the blame is to be shared between Big Pharma companies too lazy to undertake not only proper IP, but also scientific due diligence, and the bad actors in the RNAi Therapeutics industry of which there were without doubt quite a few (but definitely decreasing in numbers now).

It was then especially those Big Pharma companies that got into the game relatively late and consequently with often less conviction in the technology that were the first to curtail their RNAi Therapeutics spending. The most dramatic example of this is Roche spending north of half a billion US dollars and then calling it off already after only 3 years. It may also be that even if the scientific progress was considered acceptable, having agreed to paying hundreds of millions in milestones for RNAi triggers at the pre-clinical stage made RNAi drug development not economical considering that RNAi triggers are only one part of the equation.

Unfortunately, the backlash hit the entire industry hard, including those few companies that have done the real work underlying many of the promising drug candidates that have recently started to enter the clinic.

There are, however, increasingly signs that companies like Takeda, BMS, and Genentech are willing to show support for the technology (phase 4). It must have occurred to these companies that RNAi Therapeutics has been making some progress over the last couple of years in addressing issues such as delivery, immune stimulation, and building clinical experience, all the while prices for the technology were plummeting to what I consider highly attractive price points.

It has also become clear that in terms of RNAi trigger structure and IP, Alnylam is not the only game in town any more.

From a Big Pharma perspective, this is probably the best time to invest. Pipeline productivity problems remain the same. Many of Big Pharma’s current blockbusters based on small molecules turn out to bring little or no benefit to patients and if they are honest to themselves, the future of healthcare won’t support, i.e. reimburse, me-too drugs with only little if any incremental benefit even if you can take them only once a day in pill form. I believe this will be borne out in the multiple sclerosis field where oral pills are all the rage at the moment and some analysts believe this to be the end of the incumbent treatments that are administered parenterally. In the end, medicines that stall and reverse severe diseases will win out, and for scientific reasons, targeted technologies like RNAi Therapeutics should have an edge. There had been similar concerns about technologies like monoclonal antibodies, and now cell-based therapeutic cancer vaccines, but in the end social acceptance is greatly driven by how much the industry establishment and thought leaders endorse a technology.

It is therefore critical for Big Pharma to support pure-play RNAi Therapeutics companies. All the important innovations in the field have come from the smaller companies, and if those that have developed them disappear, everybody will be worse off. While I expect Big Pharma investment to increase from now onwards, especially in light of the clinical progress that should become particularly apparent over the next couple of months, this time should be different from the 2005-8 scramble to buy a piece of RNAi Therapeutics. The focus will be more than ever on quality, and companies that have shown hands-on ability to overcome the challenges in developing viable RNAi drug candidates should be well rewarded for their contributions to the space.

Alnylam and Big Pharma: Tekmira Caught in a Tangled Web of Interests

(Notice: The following account is a largely hypothetical explanation of what is underlying Alnylam's current troubles)

The last time Alnylam expressed surprise and regret was in September 2010 when Novartis declined to exercise an option for wide, non-exclusive rights to Alnylam’s RNAi Therapeutics IP estate ('Adoption License'). Since then Alnylam has been hit with a string of other partnership setbacks and other not-so-positive news pieces. The official party line, of course, is that these are all isolated events and Big Pharma does what it does because it has to cut down on R&D that won’t generate significant revenues in the next 3-5 years. Meanwhile, the popular story line is that Big Pharma has given up on RNAi Therapeutics because of the delivery challenge.

I believe that neither of these views are correct, and instead like to propose that while it is true that delivery is a challenge, there are technologies that show great potential, and it is the fight for ownership over and access to these technologies that is at the root of the recent developments. As you’ve heard me preach over the last 3 years or so, Tekmira’s SNALP delivery technology is at the forefront of systemic delivery and has consequently become the major bone of contention as Alnylam, its partners, and Merck struggle to protect their investments in RNAi Therapeutics.

Novartis Poses Target Threat to Alnylam and Partners, but needs SNALP

In retrospect it is clear why Novartis has acted the way it did. Initially, I had thought that Novartis' target selection strategy might be uncoupled from delivery considerations and instead would focus on the industry’s hottest GPCRs and kinases. Instead, Novartis appears to have done the scientifically sensible (Big Pharma and scientifically sensible in the same sentence...must be a first in this blog) and held off with their decisions until there was more clarity which targets and indications could be addressed based on the most advanced delivery technologies. As such, I believe that Novartis has mainly picked a bunch of targets in the liver, solid cancers, and maybe a few ocular and CNS indications, too.

In the Novartis post-mortem conference call, I was surprised to learn that as part of selecting their targets, Novartis and Alnylam had conducted quite a few pre-clinical in vivo studies in anticipation of IND filings, meaning that SNALP delivery was most likely employed, and that along with the targets came rights to some of Alnylam's current, and future (!) delivery capabilities!!! This to me was a bombshell because I had believed that delivery was Alnylam’s biggest negotiating advantage in making sure that Novartis will pay the $100M exercise fee. Well, the reason for my belief was that since Alnylam liked to emphasize that the Adoption License excluded delivery, similar restrictions applied to Novartis target picks.

Note that Novartis, which only recently appears to have ramped up their RNAi-related staff to around 100 (not really what you consider a sign of their losing interest in RNAi Therapeutics), was named in the Complaint by Tekmira as a company that Alnylam might have improperly shared SNALP delivery with. It may also be of interest that the first author of a high-profile Nature Biotech paper in 2005, David Morrissey, describing the use of SNALP delivery in a mouse model of hepatitis B is now heading RNAi Therapeutics efforts at Novartis.

31 targets, exclusive, heavily focused on the liver and solid cancers…what does that leave for Alnylam and its other Big Pharma partners? Is ‘5x15’, Alnylam’s strategy launched in January, i.e. after Novartis, a reflection of Novartis having picked higher-profile targets such as hepatitis C?

So 2 months after Novartis, Roche announces that it does not view RNAi Therapeutics a sufficiently broad commercial opportunity to justify the significant operations they had going. Since Roche, like Alnylam and Novartis, were likely to have focused their efforts on liver and cancer targets as they were looking at the same delivery technologies, this comment can also be interpreted as ‘After Novartis has taken many of the targets that we were interested in, what we are left with isn't attractive enough to make our large-scale effort worthwhile. Moreover, we are contrite that Novartis got so much paying so little'. And when they licensed the liver, metabolic, and cancer fields from Alnylam for $50M each, they must have done so in view of SNALP delivery.

Soon after, or even a little bit before the 2007 alliance, Roche together with Alnylam already got underway with validating targets and moving them into clinical development. But then another snag hit: Despite of what Alnylam might have promised Roche, Tekmira’s SNALP turned out to be more difficult to replicate than they thought. This is very apparent from Roche’s Factor VII patent application which started out with lipidoids up to the mouse stage, but then adopted Tekmira’s SNALPs for the non-human primate studies. If you are from Big Pharma and reading this, it is a lesson not to be blinded by company brands, but closely look at who actually has the know-how and partner with them instead.

These frustrations first came to the fore in comments by Alnylam’s David Bumcrot in the summer of 2007 in which he proclaimed that the MIT lipidoids that Alnylam helped fund are much superior to Tekmira’s SNALP technology and will be used for their upcoming clinical programs. To boot, he added that Tekmira’s ApoB was a terrible target. But, of course, despite of Alnylam’s efforts already in 2007 to marginalize Protiva/Tekmira, both Roche and Alnylam had to admit defeat and come back to Tekmira which allowed Alnylam to file their IND for liver cancer.

All this made it clear to Roche that it needed alternative delivery options. Roche went out to look for alternative delivery technologies and in 2008 bought Mirus Bio for the Dynamic Polyconjugates (DPCs) for $125M (almost 4x Tekmira’s current market cap). This number just illustrates the value of delivery in any of Alnylam’s deals, and if you consider that Alnylam most likely passed on DPCs and is betting the house on SNALP instead, the $1B figure that Tekmira demands is very well anchored in what actual money has changed hands.

In addition to Novartis crossing Roche’s RNAi plans, another reason for Roche unhappiness could therefore be that Alnylam over-promised them in terms of what Alnylam had to offer in delivery. As Roche interacted with Tekmira, it may also have noticed that Tekmira’s views on what SNALP know-how and IP access could be gotten from Alnylam and what Roche had to come to Tekmira for strongly differed with what Alnylam might have told them. As a result, on top of the ~$300M upfront they had given to Alnylam, they now had to close a separate deal with Tekmira to actually be able to do something with that RNAi trigger IP.

Obviously, as SNALP delivery solidified its position as the industry's leading systemic delivery technology with not that many other advanced options (maybe Silence's lipoplex comes closest, but for endothelial indications), it turned out to be a bad deal for Roche.

Coming back to Novartis and SNALP delivery. In early 2009, Novartis surprisingly bailed out Marina Biotech, under the name of mdRNA then, by giving them $7.25M for kicking the tires on their ‘DiLa2’ liposomal delivery technology. This came a bit surprising to me, because I had considered Tekmira to be leading in systemic liposomal delivery. This to me indicated that Alnylam indeed is trying to keep Novartis’ RNAi ambitions in check by restricting access to delivery and this is why Novartis, knowing of the potential of liposomal delivery, took a chance with Marina.

You can easily see what pressures Alnylam might be facing from its current and former partners. It has taken over half a billion in license fees, a lot of that presumably driven by Alnylam’s claims about the maturity of and, importantly, control over SNALP delivery. The question is: Do the partners want their money back or are they insisting on their promised access to SNALP delivery?

One of these partners not mentioned so far in this story is Takeda. In 2008, Takeda paid Alnylam $100M for non-exclusive access to the metabolic and cancer fields, plus $50M in technology transfer payments, the latter of which has apparently been completed just in the nick of time to meet the guidance provided by Alnylam. In other words, Takeda paid Alnylam $150M for SNALP technology. In previous conference calls, Tekmira noted that it was working together with Takeda to sort out SNALP delivery (as Takeda and Alnylam were working on the ‘tech transfer’). Despite of Takeda’s complementary comments in yesterday’s press release, I would not be surprised if Takeda, like Roche, is quite frustrated by now over the uncertainties over SNALP access and the Novartis exclusive target picks, and you’ve got to wonder what role Takeda will play in Tekmira’s case against Alnylam.

Merck

And lest we forget, there is, of course, Merck. Once spurned by Alnylam and having invested probably over $1.5B in RNAi Therapeutics development already with hundreds working on the technology, Merck has every reason to turn the table on Alnylam. Merck's publication record also makes it clear that they harbor strong ambitions in SNALP delivery. While the details of the Tuschl II settlement under which Merck gained access to Tuschl II IP are unknown to the public, it is quite possible that Merck is satisfied with that outcome and is now focusing their attention on gaining control over the most advanced systemic delivery technology. Should it view the Tekmira litigation against Alnylam an opportunity to gain leverage over Alnylam, I would bet that they will indeed grasp at it.

Considering this tangled web of interest and the central importance of Tekmira’s technology, it is no wonder that Alnylam is scrambling to stand on its own SNALP feet. Alnylam- setting aside personal issues for a moment, the decision can’t be that hard, can it? In fact, I don’t think there is even a choice.

Big Pharma Interest in RNAi Therapeutics Often Poor Indicator of the Science

The current perception is that large pharmaceutical companies have become quite a bit more conservative in their approach towards RNAi Therapeutics. This stands in stark contrast with only 3 years ago when some of the same companies topped each other in their efforts to securing a piece of the RNAi Therapeutics action. Clearly, given that the development of any new class of drugs is a gradual process and facts do not change as fast, Big Pharma must have been very wrong not too long ago, or it is now. So today I try to put Big Pharma’s mood swings into the perspective of the big picture progress in the underlying science.

In brief, while some players in the RNAi Therapeutics sector are partly responsible for the current Big Pharma RNAi conservatism, a lot can be explained by the herd mentality prevalent in Big Pharma where the actions of a fellow company rather than the primary scientific data guide the decision making, since standing up for your beliefs and out from the crowd has rarely proven to be good for climbing the corporate ladder. At the moment, the overpowering mantra in Big Pharma from which RNAi suffers from as being considered too early to know is that, with the exception of diagnostics, investments in R&D and especially innovative technologies generate deficits. This is not helped by the fact that the healthcare sector does face a few economic uncertainties leading to a state of paralysis where RNAi clinical development is put on hold and investments in RNAi technology development are reduced to rather mundane pharmacological assay development projects instead of real enabling technology development.

The 2006-2008 gold rush

About 4 years ago, Merck set on a collision course with Alnylam and bought rival Sirna Therapeutics for more than a billion US dollars. Now, RNAi Therapeutics was firmly on the radar of Big Pharma with Roche firing the next volley through a $300M+ platform deal with Alnylam the following July, the same month that Silence entered into a relatively broad RNAi development deal with AstraZeneca. Heightening the excitement was the Nobel Prize to Fire and Mello later that year for having discovered, only a decade earlier, that it is double-stranded, not single-stranded antisense RNA that triggers highly potent homology-dependent, post-transcriptional gene silencing.

Consequently, and despite the cracks in the economy that were starting to surface then, Takeda spent $150M for limited access to Alnylam’s IP estate, to at least secure an RNAi leadership position among its fellow Japanese pharma companies. All this left Pfizer scrambling not to be left behind in RNAi. Pfizer made the unorthodox decision to acquire Coley Pharma, which was working on TLR therapeutics and with which Pfizer had a collaboration, and use their oligonucleotide therapeutics expertise to form the basis for Pfizer’s RNAi platform effort. In addition, Pfizer also licensed a ddRNAi Therapeutics candidate for HepC from Tacere. The price tag: $164M for Coley alone. Despite all these investments, Pfizer has not formulated an outwardly cogent RNAi Therapeutics strategy, with no significant access to leading delivery technologies (this after having lost Mirus to Roche in 2008) and RNAi trigger IP.

Now, do I believe that Big Pharma overpaid for RNAi Therapeutics in that period? If you consider how RNAi has already revolutionized biomedical research and feel, as I do, that it also has the potential to do the same as a therapeutic platform, then the multi-million dollar deals should not come unexpected. I do believe, however, that some of these investments certainly did not find the right targets, the Sirna Therapeutics acquisition probably being the most egregious example. In addition, when it came to delivery, Big Pharma largely behaved penny-wise, pound-foolish, treating it almost the necessary evil of RNAi Therapeutics, or worse, ignoring it altogether. Why for example would anybody want to spend over a billion dollars for essentially RNAi triggers only, when delivery had only just reached the non-human primate stage (Alnylam-Tekmira 2006 Nature SNALP/LNP paper)? And even for LNP delivery then, scale-up, immune stimulation and the ability to repeat administer were still very much in doubt. Like building an aircraft and forgetting that you need fuel to fly it.

So RNAi Therapeutics investments at that time had still to be regarded visionary investments that could pay off hugely, driven by the belief that humanity would not fail to exploit such an elegant natural gene-regulatory pathway for therapeutic purposes, and I am convinced that Roche and Merck conducted some careful analysis of whether the attributes of RNAi Therapeutics would fit into the pharmaceutical business model of the future (‘personalized medicines’). Nevertheless, the actual trigger for the nature and timing of these investments in many cases must have been some mild panic of maybe missing the RNAi Therapeutics train about to leave the station, a technology that may have come around just in time to help the industry through the worst of the patent cliff that it was just starting to face. And if Merck invests $1.1B in the technology, maybe they know something we don’t know?

The Ripple Effects of the Dark Days of 2008-9 Still Being Felt Today

The worst financial crisis in decades was made worse still for the industry as it became clear that some of the early results that may have led Merck to believe that RNAi was quite close to reality, particularly in the antiviral, wet AMD, and cancer areas, were indeed too good to be true. Innate immune stimulation reared its ugly head, and soon every in vivo efficacy result was assumed to be an immunostimulatory artefact. Could innate immune stimulation be the fatal fundamental flaw of RNAi Therapeutics?

Here, the industry proved resilient and some high-quality studies came out that showed that in vivo efficacy can be achieved in the absence of immune stimulation and rules how to avoid them emerged. I would like to highlight here the efforts by Tekmira which in many ways have proven to be the forward-looking savior of the industry a) by developing the most advanced systemic delivery technology, and b) for having addressed immune stimulation almost as soon as they entered the field. In early 2009, Silence Therapeutics also provided high-quality pre-clinical proof-of-concept for non-immunostimulatory RNAi for cancer in various animal models. This was nice also because this validation occurred outside the Alnylam-Tekmira space.

Still, Big Pharma interest in RNAi Therapeutics as a platform hit a low. Merck-Sirna Therapeutics strangely made it their PR policy to question the platform, Roche after their merger with Genentech became noticeably more cautious about RNAi Therapeutics (also probably due to a change in personnel), and Pfizer just last week said that maybe, although we still have to test it, antisense is great after all? Contrary possibly to Pfizer, I had always believed in investing in drugs for diseases where treatment decisions are not influenced by whether having to go for a half-hour infusion every 2-4 weeks is sufficiently convenient to patients. With all due respect, I don’t understand a number of comments that were published in an interview on Pfizer’s RNAi efforts last week.

Considering the publications and conference abstracts from Big Pharma, one may speculate that Big Pharma’s PR strategy for RNAi Therapeutics may be considerably informed by lack of access not only to IP, but especially enabling delivery technologies. Lack of access not because such IP and technologies don’t exist, but because they cost something. Moreover, RNAi champions within these organizations are likely frustrated by being held on a short corporate leash due to the general economic uncertainties of the pharmaceutical industry and the fundamental loss of Big Pharma’s confidence in the power of innovation. This means that Big Pharma’s internal efforts in RNAi Therapeutics are largely limited to more mundane pharmacologic assay development, which albeit certainly useful, cannot substitute for investments in delivery technologies with essentially all the innovative, ground-breaking work happening outside their walls.

This situation is not helped by the fact that the high-ranking decision-makers are typically too busy to read the scientific literature to properly inform their own opinion and instead rely on the conventional wisdom which at the moment says that RNAi has disappointed as a therapeutic modality and now it needs to prove that it is more than just a useful laboratory tool. And it does not matter whether the current scientific literature has well moved past this existential angst phase.

I know that this is a rather scathing critique of Big Pharma’s RNAi Therapeutics philosophy, one driven by herd instinct and PR rather than an open-minded assessment of the latest primary data. There must be many scientists in Big Pharma, too, that are frustrated by the constraints and lack of scientific leadership in those companies. In a way, I sometimes feel sorry for the criticism that Merck gets for its $1.1B purchase of Sirna Therapeutics. Others are now well aware of the consequences of sticking out from the crowd as RNAi visionaries.

It is now up to the industry to carefully manage its way through this funding desert and, over the next 12 months provide a series of human proof-of-concept data with Alnylam’s ALN-TTR01 and ALN-VSP02 coming up first, then followed by Silence Therapeutics’ Atu-027 phase I results in H2 2011. In addition, there should much to be gained for the negotiating position of pure-play RNAi Therapeutics companies by aligning some of the fundamental IP and pushing back efforts by Big Pharma to talk down the price of RNAi.

Tekmira Trading Halt: Time for Some Wild Speculations

As many of you will be aware by now, trading of Tekmira shares has been abruptly halted just 15 minutes before market close on Wednesday July 14, 2010. Certainly, this strongly indicates that an unexpected event has occurred, but will it be good or bad news?

As a biotech investor, I am prepared for more negative than positive surprises. Adverse events from clinical trials can be a source of unexpected bad news. What is encouraging though is that Tekmira is currently not actively dosing in the clinic, and there is no sign that any trials by partner Alnylam involving SNALP-RNAi formulations based on Tekmira’s technology have been put on clinical hold according to clinicaltrials.gov website. In the same vein, after-hours trading in ALNY has not been halted either. As an aside, it is surprising though that there were hardly any trades in ALNY after-hours since major news involving Tekmira should also move ALNY, but then again recent market activity suggests that important news does not affect valuations of RNAi Therapeutics companies anyway.

If there was any logic to biotech investing, my bet would be on a takeover bid by Big Pharma. As I have detailed here many times, Tekmira’s strategic value in RNAi Therapeutics cannot be underestimated. In fact, I am very relatively that we have not heard yet of for example Novartis or Pfizer. Pfizer though engaged in a prelimary collaboration with Tekmira 4 months ago, about enough time for Pfizer to test some SNALP formulations in-house. Moreover, the impressive Ebola data published in The Lancet may have gone a long way in speeding up the decision to secure access to SNALP siRNA delivery. If indeed it turns out to be a takeover bid, it may only be the start of a bidding contest.

So while Tekmira is probably better equipped than most to go it alone, the value of SNALP to Big Pharma is considerably higher than it is to Tekmira alone. Because of Tekmira’s ownership structure, I would consider $3/share to be the bare minimum for negotiations to start, and this would not even start to reflect the value of SNALP and Tekmira’s RNAi know-how to most in Big Pharma.

The acquisition of a pure-play RNAi Therapeutics company by Big Pharma should also benefit the entire sector. While only three years ago, I more often than not liked to criticize some of the wild claims made by a few companies in the space, the pendulum has swung fully into the opposite extreme, to a point where there are now a number of companies with attractive valuations.

Alnylam as the bellwether of the industry would naturally benefit from additional evidence that RNAi Therapeutics is important to Big Pharma more than ever. The mid-term downside risk should be quite limited and I would look out for any attractive entry points should the Tekmira news be initially interpreted as being hostile to Alnylam. One way or another, investments in RNAi Therapeutics will end up benefiting Alnylam. For the more speculatively inclined and depending on the Tekmira financials, mdRNA and especially Silence Therapeutics could be attractive here.

While Tekmira’s technology is considerably more de-risked, Silence Therapeutics now has decent IP, science, and a not insignificant clinical footprint all for the price of a little more than $20M and with probably about 12-18 months of cash runway (depending a bit on the AZ milestones and cost savings from the recent restructuring). For the bullish and nimble, Silence Therapeutics may also represent an opportunity to buy some shares of by-stander companies on the UK AIM stock exchange before Tekmira will break any news.

mdRNA has a management that seems to understand how to get a foot in the door of Big Pharma, and merger-partner Cequent’s technology being so differentiated (mechanism and sites of action plus attractive cost of goods) from the mainstream and already a candidate in the clinic that Big Pharma may be tempted to place a limited bet on trans-kingdom RNAi. Personally, I would prefer to first get more clarity on that company's strategy going forward.

But back to Tekmira. Keeping in mind that Tekmira may just as well announce bad news such that a fire has destroyed their brand-new SNALP manufacturing suite or that the CEO has broken his leg and will be incapacitated for the next critical 2-3 months, a takeover would only be the fruits of the hard labor and dedication its employees have put in, without much attendant hype (much of the SNALP hype you will find here), and without which I would not want to contemplate the current state of RNAi Therapeutics. I would also hope that the R&D activities in Vancouver would be maintained such that SNALP medicines can get to patients as fast as possible.

Pfizer, Novartis, Merck, Roche, GSK, or even Alnylam (with Novartis in tow)….could it be one of them?

PS: None of the above is to be taken as investment advice. Instead, consider it a Gedankenexperiment. Early-stage biotech takeovers by Big Pharma are actually quite rare events and most investors are convinced that it must be their company that’s next. See also disclaimer at the bottom of this page.

RNAi Therapeutics and Big Pharma: To Collaborate or to Integrate?

John Maraganore, the CEO of Alnylam, argued in a recent essay in the Xconomy that investing in innovation is a no-brainer now more than ever. However, with a few notable exceptions, judging from the actions of Big Pharma over the last two years in drug development in general, and in RNAi Therapeutics in particular, one would think that this must be an illusion. If anything, the mega-mergers and cutting of R&D indicates that Big Pharma apparently believes that the cure for its current ailments is to first of all slash innovation and focus instead on the marketing and distribution of ready-to-market products.

A related worrisome trend is that Big Pharma is shying away from acquiring small biotech companies building cutting-edge drug discovery platforms such as RNAi Therapeutics. Instead, a look-and-see, risk-sharing partnership structure is preferred, adversely affecting both the speed and quality of developing these technologies, ultimately to the detriment of all stakeholders, including Big Pharma.

My thesis is that this model cannot be sustainable. In a normal marketplace, the high margins in the drug business will eventually have to shift to coincide with where the highest technical barriers and value-adds are, and this is clearly in the discovery and initial development of viable drug candidates and the platform technologies on which they are built. In the age of the internet and the free flow of information and goods, I just cannot believe that distribution and very late-stage development can continue to command the premiums they still do.

When this happens, Big Pharma will find itself with nothing much left, and the business dynamics will change as it has completely lost its capacity to innovate from inside. This could be even further exacerbated in an improved economic environment where small biotech is no longer dependent on the typical late-stage deals with unfavorable terms of trade when there is again reasonable access to the capital markets.

One argument often cited for slashing innovation is that for some reason in-house R&D is not productive, and it is cheaper to buy it in. Flawed logic, of course, because prices should eventually go up to reflect the value biotech brings to Big Pharma. Some go even a step further and argue that innovation has just become too costly, full-stop. If that were the case, then Rome is about to become a village again and we are about to enter the Dark Ages II and investing in any part of drug development and also broader economy would be futile anyway.

Certainly, after living through the millennium bubble, one has to admit that small biotech has contributed considerably to the notion that drug discovery and investment in new technologies is wasteful. But then again, as funding has dried up, many of the get-rich-quick schemes have disappeared and biotech has become much more disciplined as a whole.

How then should Big Pharma become involved in RNAi Therapeutics? I agree here that early-stage collaborations are an important part of the process, as the predictability of discovering and developing new breakthrough and enabling technologies is simply too low and will have to typically first come out of academic laboratories and then be dynamically refined in a small biotech environment to a stage where the technology has very reasonable clinical and commercial potential. At this point it becomes important for Big Pharma to have the capability of evaluating what is real and what not, and laboratories within Big Pharma with a good working knowledge of RNAi Therapeutics should be able to accommodate this, as many of them already do. These can also come in the shape of an acquisition of one of the smaller and struggling pure-play RNAi Therapeutics companies.

After promising technologies have been identified, however, it makes sense to integrate them. This is because even if you can bring drug candidates based on these technologies into the clinic through licensing relationships, clinical development is still a dynamic process requiring quick thinking by those intimately familiar with the technology as the results come in. A case in point from the related gene silencing field of antisense is ISIS Pharmaceuticals’ obvious frustration with the speed and quality of some of its licensees so that it has decided to buy back the rights to a number of antisense drug candidates. The ISIS-GSK deal also partly reflects the realization that at least the early stages of development are better left in the hands of those familiar with the core technology.

SNALP technology is another example. There have been quite a few that claimed a few years ago that almost anybody can make liposomal delivery work. At the moment, however, it is only Tekmira Pharmaceuticals that can claim that. Even if you copy what is published in the scientific and patent literature, mass-spec the SNALP composition etc, you may erroneously believe to have caught up with the 10 year head-start that Tekmira had, but as soon as some minor unexpected problem arises, it immediately requires the deep know-how of those innovators intimately familiar with it to solve it. There is definitely more value to be gained from a platform if you understand and own it, especially early in the life of an emerging technology where the clinical learning curve can still be relatively steep. Once a technology is relatively well understood in humans, sure, more hands-off licensing becomes increasingly appropriate and is certainly an option for those in Big Pharma that are satisfied with accessing individual products instead of enjoying the full benefits from having in-house access to prolific new platform technologies for long-term growth.

It is, of course, important that, once acquired, the innovative culture of the target is not suffocated by the bureaucracy of large organizations. Roche Kulmbach appears to be a good example of the Big Pharma model whereby, instead of slashing R&D, innovation is transferred to semi-independent Centers of Excellence where failure and risk-taking is tolerated and encouraged. In my opinion, the reason why Sirna Therapeutics/Merck has not been successful is because they are their own biggest enemy by having soon adopted a Big Pharma mindset, being afraid to take risks with new technologies and instead hide behind inflexible rules (not guidelines) for what characteristics a technology has to fulfill before even being looked at by the company.

Within the next 4 months, possibly set in motion by the upcoming $100M Novartis decision, we should get some revealing insights into the current thinking of Big Pharma on RNAi Therapeutics. My hope, of course, is that the above was an overly pessimistic assessment of the Big Pharma mindset and that they also differentiate between certain areas in drug development that may well be outsourced and others, innovative platform technologies with reasonable clinical visibility, for which outsourcing and even partnerships alone are not optimal.

The Wall Street Journal Reports that ‘Big Pharma Faces a Grim Prognosis’- In what Form will it take its RNAi Pill?

As I am procrastinating about what to write in a review about the ‘Business of RNAi’, I have tried to get more into the heads of Big Pharma rather than seeing the world from the RNAi company’s point of view as I used to. In a nice front-page article of the Wall Street Journal this week (http://online.wsj.com/article/SB119689933952615133.html?mod=googlenews_wsj), Barbara Martinez and Jacob Goldstein vividly painted a dark portrait about looming patent expirations and generic competition, declining drug approval rates, and a research enterprise that has just gotten too bureaucratic to respond to the new pressures.

To go biotech, which is now producing many of the most innovative and high-margin drugs and which has so far largely avoided similar pressures and proven quite profitable if you invested in the right platforms such as monoclonal antibodies and recombinant proteins, appears to be one of the last options left for Big Pharma to survive. As the likes of Merck, Pfizer, and AstraZeneca jostle to become the leading biotech company of the future, RNAi as one of the few broad technology platforms with a unique mechanism of action has to be up very high on their priority list. So how will Big Pharma get into the game?

There are the early adopters such as Merck, Novartis, and Pfizer which have been quite public about their RNAi efforts. Merck initially played the nice guy that wanted to help companies like Alnylam translate the science of RNAi into drugs. However, with the acquisition of Sirna Therapeutics and later difficulties with Alnylam, it is clear that Merck had grander ambitions than just being a humble licensee. Pfizer on the other hand has been trying this and that as if they first wanted to confirm the clinical viability of RNAi and then make their move. Eventually, unless of course RNAi fails (which I tend not to believe), they will all have to, because even though you are now allowed to use patented technologies with the intent of developing commercial drugs, the moment you hit the market, you have to pay in one form or another, and it is common practice that the earlier you license the less it will cost you.

As I’ve been trying (in vain) to find out which Prior Art was cited in the EPO decision as a reason to restrict the scope of Kreutzer-Limmer to 15-21 base-pair double-strand RNA in 2006 (if somebody can help me here, please contact me), I have come across a webpage on the EPO site where some of the opposition history of K-L is documented. I found it quite interesting that initially, the opposition included the likes of ISIS Pharmaceuticals, now Alnylam’s modification partner for RNAi Therapeutics, and Novartis, the second Big Pharma after Merck to take a broad license from Alnylam. Both of them dropped their opposition and instead joined Alnylam. On the other side there are the likes of Sanofi-Aventis, AstraZeneca, and Atugen (now Silence Therapeutics), and we know that AstraZeneca eventually took a license from Silence, probably the cheaper option.

It therefore appears that in the not-so-distant future we will see Big Pharma split into two camps- those with Alnylam, and those against Alnylam. The rationale for the latter either being the belief that they can find a way around Alnylam’s IP estate, or at least avoid some of the royalties by trying blunt-end dsRNA of longer than 21 base-pairs should K-L’s scope not stand. Of course, the higher the going rate for the license fees, the more the temptation to go that route, and maybe Alnylam bravely does not even mind it that way too much, since a sense of exclusivity probably makes the terms of the licenses more attractive for them. Nevertheless, for somebody with the balance sheet of many in Big Pharma, this would not only appear to be scientifically quite risky, but also penny-wise and pound-foolish. As the WSJ documented so well, the times have probably come to realize that a lot of the innovation has happened outside their research labs and no matter the correlation between wallet size and ego, being humble at the right time may help you survive the next 10 years. The same EPO website also says that Janssen Pharmaceutica, a subsidiary of Johnson and Johnson, has dropped their opposition- what do you conclude?