mdRNA-Cequent, and the RNAi Therapeutics Consolidation Wave Keeps On Rolling

Only 3 months after the Silence-Intradigm merger, synthetic siRNA Therapeutics company mdRNA just announced that they would combine their RNAi Therapeutics assets with that of trans-kingdom RNAi company Cequent Pharmaceuticals. Unlike the Silence-Intradigm merger, however, this merger is less about synergy, more about complementing each others’ strengths, and by this make it successfully through a biotech climate that is only now starting to thaw for platform technologies like RNAi Therapeutics.

Technically an acquisition by mdRNA of Cequent, the transaction benefits mdRNA in that the access to Cequent's cash enable it to finance operations until the end of the year, possibly long enough to convince one or two of their early-stage Big Pharma collaborators to pay $10-20M in upfront payments each for a platform license. Equally important, the transaction transforms mdRNA into a clinical-stage company, with one trial start imminent and possibly 3 additional INDs by the middle of next year (an inflammatory bowel disease program by Cequent and two cancer programs by mdRNA) that should be considerably helped by Cequent’s proven expertise in moving innovative drug candidates into the clinic. This profile, with a stretch-goal of being ready to commercial in 2014 CEQ-508, Cequent’s clinical candidate for the prevention and treatment of colon cancer in familial adenomatous polyposis, or FAP, an orphan disease (reviewed here). This more mature profile may allow the combined company to reach new types of investors.

On the other hand, similar to Intradigm, this transaction provides Cequent’s VC investors with what in the current biotech climate can be considered a successful exit by valuing Cequent at $44M at the time of the announcement, although the present value should be somewhat less following huge volume trades earlier this week. This is also the result of the feat of being able to grow a healthy pipeline of drug candidates in just 4 years, one that is based on a rather unorthodox technology that uses bacteria as delivery agents for the RNAi trigger to sites such as the GI tract (the current focus), genitourinary tract, and skin.

The technology diversification provided by tkRNAi gives the New mdRNA a wider choice of development options. It would be good, however, to keep nourishing the molecular biology of tkRNAi as I believe that within a short period of time, through the wonders of bacterial genetics, significant technology improvements could be achieved. With up to 9 employees contributed by Cequent and about 50 by mdRNA, it remains to be seen to which degree this can be realized in the new company.

I believe both sides and their investors are well served by the outcome and it should be a case where the whole is greater than the sum of its parts. About 60 employees is also about the critical size to be attractive as a partner for Big Pharma with sufficient depth in the various disciplines (RNAi trigger, delivery, regulatory etc), but not too big for it to become too big a cash-burn burden. But this is no time for mdRNA to celebrate for too long. We’ll have to see what Michael French and the new team have up their sleeves next. Meanwhile, there is more potential for consolidation in RNA(i) Therapeutics and mdRNA-Cequent should not be the end of the story during this phase of the global and industry-specific economic cycle.

Disclosure: I have been an advisor for Cequent Pharmaceutical and will only discuss publicly available information. My views on mdRNA’s technologies and tkRNAi can be found by searching this blog with keywords like ‘mdRNA’; ‘Nastech’; ‘Cequent’; and ‘tkRNAi’.

Cequent Pharmaceuticals to Enter Clinic with First Oral RNAi Therapeutics

Cequent Pharmaceuticals is somewhat of an oddity in the RNAi Therapeutics space. Neither does it use synthetic RNAi triggers, nor does it fit properly into the DNA-directed RNAi paradigm. Instead, it is based on the so called trans-kingdom RNAi (tkRNAi) technology where genetically engineered bacteria are utilized to both generate and deliver the RNAi trigger, particularly to areas where commensal bacteria occur naturally. This includes the epithelia of the gastrointestinal tract, skin, and urogenital areas. This differentiation then allowed it to become the first RNAi Therapeutics company to test an orally administered RNAi Therapeutic in the clinic. The candidate drug, CEQ508, aims to prevent the formation and malignant progression of polyps in Familial Adenomatous Polyposis (FAP).

FAP is a rare ('orphan') inherited disease in which mutation of the tumor suppressor APC gene initiates events that cause the growth of countless polyps that ultimately progress to become malignant by the age of 40-50. CEQ508 contains an shRNA that is targeted against beta-catenin which is the major mediator of APC-regulated signaling, and the knockdown of which should therefore delay polyp proliferation and development of malignancies. In the trial, 18 adult FAP patients will be given capsules containing lyophilized tkRNAi bacteria daily for 28 days. Of course, safety is the primary objective of this phase I trial, but beta-catenin levels will also be measured as an early biomarker for drug efficacy. A cute video from Cequent's website explains the technological approach of this trial much better than I could ever do here:

Let me say a few general words about tkRNAi. When I saw the seminal paper initially, years before my direct interactions with the company (disclosure: I have been consulting for the company), I was somewhat skeptical of the approach. One of the reasons was that bacteria are very complex systems compared to other RNAi delivery systems, which means that there should be an increased likelihood for causing off-target phenotypes. The other concern was that maximal knockdown levels in vitro appeared to be less than typically achieved with siRNAs and shRNAs. Since then, however, I have learned a little bit more about tkRNAi convinced myself that it indeed does knock down genes, and that at this stage a carefully chosen target could allow for clinical success at ~50-60% knockdown levels as observed in the CEQ508 non-human primate studies. As to the off-target effects, the tkRNAi products have been shown to be well tolerated in a number of animal models. In addition, I learned that Cequent was not the first to harness bacteria as therapeutic agents for the transfer of genetic material so that additional safety and mechanistic information is available already.

Because of the awesome powers of bacterial genetics I would expect that the speed and creativity with which specificity (e.g. engineering of targeting ligands; reduction of key components responsible for off-targeting; increase of the ratio of shRNA to bacterial RNA and DNA following release into cytoplasm etc) and potency (e.g. shRNA designs; co-expression of factors affecting shRNA maturation etc) can be increased should be quite considerable. On the other hand, with the recent fund raising, it will be the immediate focus of the company to conduct the phase I trial where it will gain first clinical experience with the system in the gastrointestinal tract, lessons from which should also be also applicable towards follow-up gastrointestinal applications such as the inflammatory bowel disease program it co-develops with Novartis.