The waves started by the ENHANCE tsunami have finally come to engulf ISIS Pharmaceutical’s stock this Friday as the FDA indicated that it wants to see costly and more time-consuming outcome studies for all but the most at-risk cardiovascular patient population in the approval of ISIS’ lead product mipomersen, an antisense compound directed against ApoB-100 in the liver. As I had discussed earlier in the wake of two high-profile studies that failed to correlate the responses of some of the most trusted biomarkers for diabetes and cardiovascular disease with disease outcome, most notably Merck/Schering-Plough’s ENHANCE study, this was almost to be expected.
The 29% drop in the stock that day was caused by a discussion between ISIS and their partners at Genzyme with the FDA on the approval path for mipomersen. Instead of being able to gain accelerated approval by merely showing LDL-cholesterol lowering as a surrogate biomarker for a broader patient population, this will only be accepted for the small homozygous familial hypercholesterolemia (ho FH) population, and it was not clear from the conference call whether this would be a full or an accelerated approval. For all other indications, mipomersen now has to show tangible benefits with regards to cardiovascular events, which, although it would eventually increase the market value of the drug considerably, means longer and more expensive outcome trials before the real commercial value of mipomersen can be realized (in addition, ho FH will be delayed by at least one year, because the FDA requires 2 rodent carcinogenic studies, instead of the one they had planned for).
What can the RNAi Therapeutics space learn from this experience? One lesson is that it is very important to be clear early on with what the almighty FDA wants to see in approving a drug, something particularly relevant for novel technologies and novel drug targets such as will be the case with RNAi. It is probably not a coincidence that clarity has come now that Genzyme has joined the mipomersen effort, as it is probably THE company experienced with gaining regulatory approval for unique, high-margin drugs with small, but very well-defined patient populations, a category that a number of RNAi Therapeutics will fall into as part of the personalized medicine revolution.
Another lesson is that the fortunes of an entire technology platform may be subject to the woes of a single dominant development program. While the cardiovascular disease market is enormous and the potential rewards substantial, this is not without a reason and substantial investments have to be made before gaining approval. A number of RNAi Therapeutics companies such as Alnylam, Tekmira/Protiva, RXi, Mirus Bio, and Merck have all indicated an interest in targeting very promising liver targets for hypercholesterolemia by RNAi, and although it may limit the ultimate financial reward, a company like Alnylam that carries much of the hope for realizing the therapeutic promise of RNAi, may have to think twice about to what degree it wants to make itself dependent on a single development program such as ALN-PCS01.
Companies targeting ApoB by RNAi (probably including Tekmira/Protiva, RXi, and Merck) should benefit considerably by learning from ISIS’ pioneering ApoB experience, and actually should have a chance at gaining accelerated approval should ISIS be able to show that lowering LDL-cholesterol by targeting ApoB is associated with cardiovascular benefits. For companies like Alnylam though interested in other, previously untested targets, the decision may only confirm that, yes, outcome studies will be required.
I welcome the trend towards evidence-based medicine and addressing some of the problems associated with direct-to-consumerism, but again, the FDA and politicians should not blindly destroy the drug development industry by forgetting that at the same time there need to be clear rewards for innovative (patent protection!) and efficacious (reimbursement!) drugs. This way the pie could stay around the same size, and yet everybody including patients, payers, and the industry would be winners.
Also this week: In a catastrophic financing, Nastech raised just shy of $8M in a registered direct offering at a probably historically low $1.73 a share, and may raise another $3M at $2.17 a share. One has to wonder why this relatively small fund-raising round was done at all at these so unfavorable conditions- unfavorable at least for the present shareholders. In any case, this may be the best time to cut their losses and fully commit to developing RNAi Therapeutics while monetizing what is left over from TJT nasal delivery. Their experience in drug delivery and peptide technology in particular may position them to be a respectable player in peptide-facilitated RNAi delivery (direct conjugation of RNAi trigger to membrane-penetrating peptides and/or using peptides as ligands for targeted delivery). But there is one advice that I would give them: please do not waste any more of your shareholder money and your own credibility on senseless and blatant patent workaround efforts such as three-stranded siRNAs. As the 36% drop on Friday illustrates, investors are sophisticated enough to see through this and rather than claiming to own everything under the RNAi sun, or universe, it is more credible to specialize in an area of your expertise and be good at it. Develop clinically relevant delivery for example, and the market will more than generously reward you for it.
Showing posts with label Nastech. Show all posts
Showing posts with label Nastech. Show all posts
Monday, April 28, 2008
Tuesday, April 1, 2008
RNAi Therapeutics Investment Tracker Update
Following today’s announcement by Protiva and Tekmira, I was finally able to face the reality of the plunging stock market, and updated the investment tracker. Due to the spin-out of RXi out of CytRx, I have liquidated as of today the CytRx part of the deal and reinvested the proceeds into RXi so that there are now 40.85 shares in the portfolio purchased at an adjusted share price of $12.24. Other positions were left unchanged, although progress was noted for Nastech and Rosetta Genomics.
Nastech has successfully appointed a scientific advisory board for mdRNA, collecting Nobel laureates as if they were stamps and suited for their RNAi delivery efforts. It is now critical to build on this with a successful fund-raising round and hopefully a financial separation between the nasal delivery and RNAi Therapeutics businesses. I do understand that there are overlaps, but experience has shown that exposing RNAi Therapeutics to the risk of an unrelated technology has hurt RNAi Therapeutics development efforts rather than helped it. Also, the meroduplex poster at the Keystone meeting did not make much sense to me as the whole idea is based on the premise of circumventing Alnylam’s IP no matter whether it makes sense scientifically or not. I’d rather see a company focus on delivery and license the target rights accordingly, than a company trying to re-invent the wheel and consequently making drug development for themselves even more difficult than it already is.
Rosetta Genomics has impressed me at the Keystone conference by their presence and breadth of science. The RNAi/microRNA world is watching them as they prepare the launch of their first microRNA diagnostics this year.
Nastech has successfully appointed a scientific advisory board for mdRNA, collecting Nobel laureates as if they were stamps and suited for their RNAi delivery efforts. It is now critical to build on this with a successful fund-raising round and hopefully a financial separation between the nasal delivery and RNAi Therapeutics businesses. I do understand that there are overlaps, but experience has shown that exposing RNAi Therapeutics to the risk of an unrelated technology has hurt RNAi Therapeutics development efforts rather than helped it. Also, the meroduplex poster at the Keystone meeting did not make much sense to me as the whole idea is based on the premise of circumventing Alnylam’s IP no matter whether it makes sense scientifically or not. I’d rather see a company focus on delivery and license the target rights accordingly, than a company trying to re-invent the wheel and consequently making drug development for themselves even more difficult than it already is.
Rosetta Genomics has impressed me at the Keystone conference by their presence and breadth of science. The RNAi/microRNA world is watching them as they prepare the launch of their first microRNA diagnostics this year.
Wednesday, January 23, 2008
Will Market Turmoil Accelerate Consolidation of Core RNAi Therapeutics Companies?
I know that I am vulnerable to accusations that I take a very pro-Alnylam view. But you have to admit that history thus far has supported this view and that I have been pointing out some of the dangers Alnylam faces as well. With that out of the way, another shameless pro-Alnylam posting:
One striking observation from the recent volatile trading is that while the bellwether of RNAi Therapeutics, Alnylam, almost seemed oblivious to the economic troubles around it, smaller second-tier players such as Silence Therapeutics, CytRx, and Nastech were being severely punished by the markets. Part of this may be explained by the solid financial position of Alnylam which may not have to return to the capital markets for years, while the likelihood increases that Nastech and CytRx have no choice but to exercise their shelves and dilute shareholder equity at a time when share prices are sinking ever more.
Shareholders of Nastech and CytRx may have both hoped that a successful spin-out of their RNAi units MDRNA and RXi, respectively, would avoid a secondary offering at the most inopportune times. But as the spin-outs take time to materialize and bad partnering and clinical news keep coming in, this appears less likely by the day. The latest developments (today):
- Nastech “announced” in an SEC filing that Novo Nordisk would be joining Merck and P&G in walking away from a co-development program relating to Nastech’s nasal delivery program. This was followed by a $50M shelf registration, quite sizeable for a company with a $72M market cap.
- CytRx suffered a clinical halt by the FDA for their lead small molecule phase II ALS program.
In both cases, the problem for RNAi Therapeutics investors has been their exposure to the non-RNAi parts of the parent companies which, unlike Sirna Therapeutics’ financially successful total makeover before, chose to nurture RNAi divisions within a non pure-play environment. Additionally, both developments were preceded by re-shuffling of their financial management structures and significant share price declines.
The situation at Silence Therapeutics, where share prices have fallen by more than half in a matter of two month, is slightly different, but also emphasizes that second-tier companies have a hard time attracting interest as their IP position is under scrutiny. In this case, progress in the US patent application for their AtuRNAi design or a validating Big Pharma partnership is needed.
I would not be surprised that Alnylam’s strong IP position plays a critical role in all these delays as it should make any potential partner or investor think twice about investing. It will now be interesting whether current market conditions accelerate the consolidation of the core RNAi Therapeutics space. My real concern, however, is how will a recession affect funding of scientific research, particularly for RNAi delivery and safety.
Alnylam should also be careful that their cash pile is not melted away by hyperinflation, as policy makers have come to the conclusion that the best way to save the economy is to print more money and please the Big Banks on Wall Street by slashing interest rates. Never mind that it was overspending encouraged by low interest rates that got us into the mess in the first place.
One striking observation from the recent volatile trading is that while the bellwether of RNAi Therapeutics, Alnylam, almost seemed oblivious to the economic troubles around it, smaller second-tier players such as Silence Therapeutics, CytRx, and Nastech were being severely punished by the markets. Part of this may be explained by the solid financial position of Alnylam which may not have to return to the capital markets for years, while the likelihood increases that Nastech and CytRx have no choice but to exercise their shelves and dilute shareholder equity at a time when share prices are sinking ever more.
Shareholders of Nastech and CytRx may have both hoped that a successful spin-out of their RNAi units MDRNA and RXi, respectively, would avoid a secondary offering at the most inopportune times. But as the spin-outs take time to materialize and bad partnering and clinical news keep coming in, this appears less likely by the day. The latest developments (today):
- Nastech “announced” in an SEC filing that Novo Nordisk would be joining Merck and P&G in walking away from a co-development program relating to Nastech’s nasal delivery program. This was followed by a $50M shelf registration, quite sizeable for a company with a $72M market cap.
- CytRx suffered a clinical halt by the FDA for their lead small molecule phase II ALS program.
In both cases, the problem for RNAi Therapeutics investors has been their exposure to the non-RNAi parts of the parent companies which, unlike Sirna Therapeutics’ financially successful total makeover before, chose to nurture RNAi divisions within a non pure-play environment. Additionally, both developments were preceded by re-shuffling of their financial management structures and significant share price declines.
The situation at Silence Therapeutics, where share prices have fallen by more than half in a matter of two month, is slightly different, but also emphasizes that second-tier companies have a hard time attracting interest as their IP position is under scrutiny. In this case, progress in the US patent application for their AtuRNAi design or a validating Big Pharma partnership is needed.
I would not be surprised that Alnylam’s strong IP position plays a critical role in all these delays as it should make any potential partner or investor think twice about investing. It will now be interesting whether current market conditions accelerate the consolidation of the core RNAi Therapeutics space. My real concern, however, is how will a recession affect funding of scientific research, particularly for RNAi delivery and safety.
Alnylam should also be careful that their cash pile is not melted away by hyperinflation, as policy makers have come to the conclusion that the best way to save the economy is to print more money and please the Big Banks on Wall Street by slashing interest rates. Never mind that it was overspending encouraged by low interest rates that got us into the mess in the first place.
Monday, January 14, 2008
Portfolio Review: RNA Therapeutics Deals Help Sector amid Recession Fears
It seems the markets decided to wait for the New Year for the cracks from the credit crunch to finally start spreading throughout the economy. Not surprisingly, stocks have taken a plunge amid eye-popping write-offs by the major investment and commercial banks. Fortunately, however, the RNAi Therapeutics sector was largely unharmed, partly supported by a strong pharma sector considered a safe harbor in economically difficult times, but largely because of the two remarkable deals involving RNA-based drugs.
One was for ISIS’ mipomersen for the treatment of hypercholesterolemia, which although an antisense and not an RNAi compound further highlighted interest in RNA-based therapeutics in general; the other was for Tacere’s AAV-shRNA TT-033 gene therapy for HCV and represented the first licensing of an DNA-directed RNAi Therapeutics program by Big Pharma (Pfizer). This happened the same week that I attended a presentation by a VP responsible for RNA therapeutic drug development for a major pharmaceutical company, who admitted that the pharmaceutical industry was a failing business model which may only be saved by technologies such as RNAi (stressing especially the potential cost and time savings). Clearly, RNAi Therapeutics is and will continue to be a hot commodity in 2008 and beyond.
Interestingly, while earlier RNA therapeutics deals tended to lift the entire sector, two companies that particularly live on partnering hopes failed to participate in the rally: Silence Therapeutics (-11.4%) and Nastech Pharmaceuticals (-4.5%). It seems that the lift in Alnylam’s share price (+8.8%) indicates that investors are starting to focus on the proven players with solid balance sheets at a time when biotechs may find it difficult to raise funds in the capital markets.
Portfolio Transactions:
Sells:
Benitec: I will take profits from Benitec by selling 1/3 after it exploded on the Tacere deal (Benitec retains significant stakes in TT-033 after it spun out Tacere). This will also avoid Benitec becoming too large a position. Moreover, the exclusive license award to the fundamental Fire-Mello patents to Oxford Biomedica this week for lentivirally-delivered expressed RNAi further may be interpreted as a negative development for Benitec’s IP position on DNA-directed RNAi, including its phase I program for HIV which makes use lentiviral RNAi technology. Still, Pfizer has now repeatedly shown interest in Benitec’s RNAi technology, and one has to wonder whether more deals are in store.
Nastech: The company announced this week, without giving an explanation, that Philip Ranker resigned as CFO. My motivation for including Nastech in the portfolio was based on hopes for a successful spin-out of RNAi Therapeutics subsidiary MDRNA. A delay in the mdRNA spin-out, however, may force Nastech to seek the capital markets for a secondary, thereby risking massive dilution at current price levels. Seeing the CFO go at this juncture forces me to reduce my position from 8.8% to 5% of my portfolio.
Buys:
Oxford Biomedica: Four years ago, Oxford Biomedica first piqued my interest when they presented impressive data on targeting SOD1 for the treatment of a form of amyotrophic lateral sclerosis (ALS; subsequently published in Nature Medicine in 2005: Ralph et al. Nature Medicine 11:429). Finishing up my D.Phil. in Oxford I even enquired whether they were looking for scientists working on RNAi gene therapy, but was told that they were pursuing this more as a tool, not a therapy. Clearly, with the new license, the Alnylam of lentiviral gene therapy technology is now officially part of the RNAi Therapeutics community. A broad clinical pipeline, a solid financial position following a high-profile deal last year with Sanofi-Aventis for the phase II/III cancer immunotherapy Trovax, their track record of scientific accomplishments and an unparalleled IP estate in lentivirus technology are worth 6% of my model portfolio.
ISIS Pharmaceuticals: The remaining cash from the sales of Nastech and Benitec will be invested in ISIS since I believe that the markets have not fairly valued the Genzyme transaction. In the long-run, it will not only help validate ISIS’ antisense chemistry in investors’ eyes, but also finally gives ISIS the financial strength to realize the full potential of their technology.
One was for ISIS’ mipomersen for the treatment of hypercholesterolemia, which although an antisense and not an RNAi compound further highlighted interest in RNA-based therapeutics in general; the other was for Tacere’s AAV-shRNA TT-033 gene therapy for HCV and represented the first licensing of an DNA-directed RNAi Therapeutics program by Big Pharma (Pfizer). This happened the same week that I attended a presentation by a VP responsible for RNA therapeutic drug development for a major pharmaceutical company, who admitted that the pharmaceutical industry was a failing business model which may only be saved by technologies such as RNAi (stressing especially the potential cost and time savings). Clearly, RNAi Therapeutics is and will continue to be a hot commodity in 2008 and beyond.
Interestingly, while earlier RNA therapeutics deals tended to lift the entire sector, two companies that particularly live on partnering hopes failed to participate in the rally: Silence Therapeutics (-11.4%) and Nastech Pharmaceuticals (-4.5%). It seems that the lift in Alnylam’s share price (+8.8%) indicates that investors are starting to focus on the proven players with solid balance sheets at a time when biotechs may find it difficult to raise funds in the capital markets.
Portfolio Transactions:
Sells:
Benitec: I will take profits from Benitec by selling 1/3 after it exploded on the Tacere deal (Benitec retains significant stakes in TT-033 after it spun out Tacere). This will also avoid Benitec becoming too large a position. Moreover, the exclusive license award to the fundamental Fire-Mello patents to Oxford Biomedica this week for lentivirally-delivered expressed RNAi further may be interpreted as a negative development for Benitec’s IP position on DNA-directed RNAi, including its phase I program for HIV which makes use lentiviral RNAi technology. Still, Pfizer has now repeatedly shown interest in Benitec’s RNAi technology, and one has to wonder whether more deals are in store.
Nastech: The company announced this week, without giving an explanation, that Philip Ranker resigned as CFO. My motivation for including Nastech in the portfolio was based on hopes for a successful spin-out of RNAi Therapeutics subsidiary MDRNA. A delay in the mdRNA spin-out, however, may force Nastech to seek the capital markets for a secondary, thereby risking massive dilution at current price levels. Seeing the CFO go at this juncture forces me to reduce my position from 8.8% to 5% of my portfolio.
Buys:
Oxford Biomedica: Four years ago, Oxford Biomedica first piqued my interest when they presented impressive data on targeting SOD1 for the treatment of a form of amyotrophic lateral sclerosis (ALS; subsequently published in Nature Medicine in 2005: Ralph et al. Nature Medicine 11:429). Finishing up my D.Phil. in Oxford I even enquired whether they were looking for scientists working on RNAi gene therapy, but was told that they were pursuing this more as a tool, not a therapy. Clearly, with the new license, the Alnylam of lentiviral gene therapy technology is now officially part of the RNAi Therapeutics community. A broad clinical pipeline, a solid financial position following a high-profile deal last year with Sanofi-Aventis for the phase II/III cancer immunotherapy Trovax, their track record of scientific accomplishments and an unparalleled IP estate in lentivirus technology are worth 6% of my model portfolio.
ISIS Pharmaceuticals: The remaining cash from the sales of Nastech and Benitec will be invested in ISIS since I believe that the markets have not fairly valued the Genzyme transaction. In the long-run, it will not only help validate ISIS’ antisense chemistry in investors’ eyes, but also finally gives ISIS the financial strength to realize the full potential of their technology.
Wednesday, November 14, 2007
Nastech’s RNAi Ambitions Hit by P&G Break-Up
Since Nastech announced that Proctor & Gamble would drop their collaboration on a intranasal spray of parathyroid hormone (IN-PTH) for the treatment of osteoporosis last Wednesday, the stock has been falling ever since and lost about 2/3 of its value in less than a week. This is not surprising as it shatters investor confidence in the nasal peptide delivery technology that the company was founded on one and a half year after Merck cancelled a similar agreement with Nastech for the intranasal delivery of an anti-obesity peptide.
Nastech’s experience highlights the risk of investing in biotech companies that are centered on a single, as yet unproven technology. It is therefore worth keeping in mind that RNAi Therapeutics is only one clinical trial or adverse event away from being shaken by similar woes.
With the benefit of hindsight, Nastech always wanted to be everything to everybody and doomed to fail. It does not take a degree in Economics to see that too many clinical programs, including some based on not very well validated peptides, and Blue-Sky Science Projects (like projecting that it would take another 10-15 years to develop an RNAi Therapeutics) were a recipe for financial disaster. While it is good to take pride in your science, the odds are stacked against you in trying to develop technologies all on your own, even in RNAi, an area where so much of the innovation will come out of academic laboratories and you may be better off licensing those while focusing your resources on drug development.
No matter how impressive you think it may sound that your RNAi (Dicer substrate) is so potent that it works at homeopathic doses, that you have found the Holy Grail to off-targeting (Ribo-T), and “solved” the delivery problem (peptide-conjugation), to those in the Art it sounds too good to be true, particularly when data in investor presentations lack critical controls and in the absence of appropriate peer-reviewed publications to support these claims. The burden is now, as they aim to spin out their RNAi unit (mdRNA) for money and visibility, on Nastech to prove to the investing public that there really is some value hidden in their RNAi. Otherwise, it will sound more like yet another pipe dream rather than reality of a company that would like to think that it alone can achieve what the rest of the scientific world is struggling with.
Nastech employees may represent a further RNAi-related value not reflected in the current ~$120M market cap (with ~$58M in cash). After Sirna Therapeutics was bought by Merck, there was an exodus of experienced oligonucleotide scientists that ended up working for Nastech in Bothell, WA. Although I doubt that Nastech’s RNAi IP will be valued very highly at this juncture, their know-how acquired in the process may be viewed as an asset by a larger company looking to jump-start their own RNAi Therapeutics work, similar to the acquisition of Alnylam’s Kulmbach, Germany, operations by Roche in July. Of course, employees may prove to be a fickle asset at a time when money is tight and Alnylam is relocating their European operations back to Cambridge, Mass. The coming days and weeks will be critical for the future of Nastech and their RNAi ambitions.
Nastech’s experience highlights the risk of investing in biotech companies that are centered on a single, as yet unproven technology. It is therefore worth keeping in mind that RNAi Therapeutics is only one clinical trial or adverse event away from being shaken by similar woes.
With the benefit of hindsight, Nastech always wanted to be everything to everybody and doomed to fail. It does not take a degree in Economics to see that too many clinical programs, including some based on not very well validated peptides, and Blue-Sky Science Projects (like projecting that it would take another 10-15 years to develop an RNAi Therapeutics) were a recipe for financial disaster. While it is good to take pride in your science, the odds are stacked against you in trying to develop technologies all on your own, even in RNAi, an area where so much of the innovation will come out of academic laboratories and you may be better off licensing those while focusing your resources on drug development.
No matter how impressive you think it may sound that your RNAi (Dicer substrate) is so potent that it works at homeopathic doses, that you have found the Holy Grail to off-targeting (Ribo-T), and “solved” the delivery problem (peptide-conjugation), to those in the Art it sounds too good to be true, particularly when data in investor presentations lack critical controls and in the absence of appropriate peer-reviewed publications to support these claims. The burden is now, as they aim to spin out their RNAi unit (mdRNA) for money and visibility, on Nastech to prove to the investing public that there really is some value hidden in their RNAi. Otherwise, it will sound more like yet another pipe dream rather than reality of a company that would like to think that it alone can achieve what the rest of the scientific world is struggling with.
Nastech employees may represent a further RNAi-related value not reflected in the current ~$120M market cap (with ~$58M in cash). After Sirna Therapeutics was bought by Merck, there was an exodus of experienced oligonucleotide scientists that ended up working for Nastech in Bothell, WA. Although I doubt that Nastech’s RNAi IP will be valued very highly at this juncture, their know-how acquired in the process may be viewed as an asset by a larger company looking to jump-start their own RNAi Therapeutics work, similar to the acquisition of Alnylam’s Kulmbach, Germany, operations by Roche in July. Of course, employees may prove to be a fickle asset at a time when money is tight and Alnylam is relocating their European operations back to Cambridge, Mass. The coming days and weeks will be critical for the future of Nastech and their RNAi ambitions.
Saturday, August 11, 2007
A Tumultuous Week for RNAi Therapeutics Companies
Credit worries, earnings calls, a new significant biodefense contract, and flu RNAi news all combined to produce a highly volatile week for RNAi Therapeutics companies, both financially and scientifically.
It all started with Nastech’s announcement on Monday morning of a Friday webinar to discuss their flu RNAi development strategy. Coupled with hedge fund troubles, margin calls and short covering, this created the perfect scenario for an impressive run-up of more than 35% run-up in Nastech’s share price at the close on Thursday. In my last blog, I cautioned, however, that the press release accompanying Nastech’s earnings call on Wednesday contained a mere reference to positive in vitro data on flu RNAi, something that had already been demonstrated by various groups before.
Flu RNAi then received some more attention on Thursday when Alnylam announced that their flu RNAi program, in collaboration with Novartis, would be delayed due to in vivo efficacy and safety issues. An IND that had been scheduled to be filed by the end of this year will now be postponed until at least 2008. Apparently, Alnylam’s own data and data from the literature suggest difficulties in obtaining sequence-specific viral knockdown with current flu animal models. This does not come totally unexpected since there has been discussion in the field on the merits of purposefully combining the innate immune responses elicited by some, particularly liposomally formulated unmodified siRNAs with the sequence-specific inhibition of viruses such as HCV, RSV, and flu.
While I fully agree with Alnylam’s decision to ensure the highest quality and safety of their pipeline at an early stage, it would be interesting to know the exact nature of the siRNAs in question (modified or unmodified), delivery methods used (formulated or naked), and the types of animal models that were used. This is particularly relevant given that the company’s most advanced clinical program for RSV targets another virus of the respiratory tract. It should be kept in mind, however, that safe and potent pre-clinical RNAi efficacy has been demonstrated for RSV. Moreover, we should not be surprised to see such differences since although both viruses infect similar tissues, the exact biological distribution and viral kinetics may significantly differ between any two viruses.
The in vivo efficacy/safety issues were compounded by the reduced support from the US government for novel treatments in preparation of a pandemic avian flu. While federal support for RNAi addressing public health threats continues to benefit the development of the RNAi Therapeutics platform in general, this demonstrates once again that due to changing political climates, the government cannot be relied upon for direct commercial benefit. However, political interest in preparing for a possible avian flu pandemic is particularly strong in some of the emerging economies in Asia, particularly China, and only yesterday a study by a Chinese group was published in an advance online article of the journal “Antiviral Research” on the in vitro and in vivo efficacy of RNAi for H5N1 (Zhou et al.: “Effective small interfering RNAs targeting matrix and nucleocapsid protein gene inhibit influenza A virus replication in cells and mice.”)
Ironically, on the same day that the delay was announced, Alnylam reported that it had been awarded another significant US government contract of $38.6M over 33 months for the development of RNAi antivirals for the treatment of hemorrhagic fever viruses. Currently, there is no effective treatment for these viruses which are perceived as a threat to national security. RNAi meanwhile has proven to be the most promising treatment in animal models so far.
This announcement on Thursday seemed to have further stoked the fantasies in Nastech shares and the whole sector which recorded significant gains in the face of a big drop in the major indexes. However, expectations were somewhat disappointed by the Nastech webinar on Friday morning which failed to uncover major breakthroughs in flu RNAi. Also, an analyst question related to sequence-specific in vivo knockdown was not directly addressed. While I certainly appreciate the educational aspect of this webinar, it left me, and probably others, scratching my head why this company went out of its way to present these data at 5am Pacific Time as if market-sensitive data were about to be disclosed. Nastech shares gave up almost 8% that day.
Here are some more interesting bits and pieces from this busy week:
1) ISIS stated that no fatty liver (steatosis) was observed in pre-clinical animal models with their apoB100 antisense compound. This should be reassuring news for ISIS’ lead compound given the concern raised by other reports of fatty liver in mice following apoB100 knockdown.
2) Alnylam’s phase II RSV studies for naturally infected patients was postponed to the first half of 2008 after phase II experimental infection data are available. These are expected by the end of this year. This certainly makes a lot of scientific sense and illustrates Alnylam’s scientific data-driven flexible pipeline management approach.
3) On the patent front, Alnylam announced the issuance of Kreutzer-Limmer I in Canada, and Tuschl I in Australia. Given the complexity in the ownership of this particular patent, especially with regard to CytRx and the University of Massachusetts, I wonder why the Press Release failed to mention UMass as a licensor for Tuschl I to Alnylam while acknowledging Max Planck Innovation Gmbh, the MIT, and the Whitehead Institute for Biomedical Research.
4) Alnylam management states continued interest by Big Pharma and biotech for a piece of the RNAi platform. More significant deals are possible, if not certain. Also, Novartis is more likely than not to exercise its adoption license for Alnylam’s IP. Such deals should strengthen the company’s balance sheet beyond their guidance of over $435M in cash at the end of this year.
What a week!
It all started with Nastech’s announcement on Monday morning of a Friday webinar to discuss their flu RNAi development strategy. Coupled with hedge fund troubles, margin calls and short covering, this created the perfect scenario for an impressive run-up of more than 35% run-up in Nastech’s share price at the close on Thursday. In my last blog, I cautioned, however, that the press release accompanying Nastech’s earnings call on Wednesday contained a mere reference to positive in vitro data on flu RNAi, something that had already been demonstrated by various groups before.
Flu RNAi then received some more attention on Thursday when Alnylam announced that their flu RNAi program, in collaboration with Novartis, would be delayed due to in vivo efficacy and safety issues. An IND that had been scheduled to be filed by the end of this year will now be postponed until at least 2008. Apparently, Alnylam’s own data and data from the literature suggest difficulties in obtaining sequence-specific viral knockdown with current flu animal models. This does not come totally unexpected since there has been discussion in the field on the merits of purposefully combining the innate immune responses elicited by some, particularly liposomally formulated unmodified siRNAs with the sequence-specific inhibition of viruses such as HCV, RSV, and flu.
While I fully agree with Alnylam’s decision to ensure the highest quality and safety of their pipeline at an early stage, it would be interesting to know the exact nature of the siRNAs in question (modified or unmodified), delivery methods used (formulated or naked), and the types of animal models that were used. This is particularly relevant given that the company’s most advanced clinical program for RSV targets another virus of the respiratory tract. It should be kept in mind, however, that safe and potent pre-clinical RNAi efficacy has been demonstrated for RSV. Moreover, we should not be surprised to see such differences since although both viruses infect similar tissues, the exact biological distribution and viral kinetics may significantly differ between any two viruses.
The in vivo efficacy/safety issues were compounded by the reduced support from the US government for novel treatments in preparation of a pandemic avian flu. While federal support for RNAi addressing public health threats continues to benefit the development of the RNAi Therapeutics platform in general, this demonstrates once again that due to changing political climates, the government cannot be relied upon for direct commercial benefit. However, political interest in preparing for a possible avian flu pandemic is particularly strong in some of the emerging economies in Asia, particularly China, and only yesterday a study by a Chinese group was published in an advance online article of the journal “Antiviral Research” on the in vitro and in vivo efficacy of RNAi for H5N1 (Zhou et al.: “Effective small interfering RNAs targeting matrix and nucleocapsid protein gene inhibit influenza A virus replication in cells and mice.”)
Ironically, on the same day that the delay was announced, Alnylam reported that it had been awarded another significant US government contract of $38.6M over 33 months for the development of RNAi antivirals for the treatment of hemorrhagic fever viruses. Currently, there is no effective treatment for these viruses which are perceived as a threat to national security. RNAi meanwhile has proven to be the most promising treatment in animal models so far.
This announcement on Thursday seemed to have further stoked the fantasies in Nastech shares and the whole sector which recorded significant gains in the face of a big drop in the major indexes. However, expectations were somewhat disappointed by the Nastech webinar on Friday morning which failed to uncover major breakthroughs in flu RNAi. Also, an analyst question related to sequence-specific in vivo knockdown was not directly addressed. While I certainly appreciate the educational aspect of this webinar, it left me, and probably others, scratching my head why this company went out of its way to present these data at 5am Pacific Time as if market-sensitive data were about to be disclosed. Nastech shares gave up almost 8% that day.
Here are some more interesting bits and pieces from this busy week:
1) ISIS stated that no fatty liver (steatosis) was observed in pre-clinical animal models with their apoB100 antisense compound. This should be reassuring news for ISIS’ lead compound given the concern raised by other reports of fatty liver in mice following apoB100 knockdown.
2) Alnylam’s phase II RSV studies for naturally infected patients was postponed to the first half of 2008 after phase II experimental infection data are available. These are expected by the end of this year. This certainly makes a lot of scientific sense and illustrates Alnylam’s scientific data-driven flexible pipeline management approach.
3) On the patent front, Alnylam announced the issuance of Kreutzer-Limmer I in Canada, and Tuschl I in Australia. Given the complexity in the ownership of this particular patent, especially with regard to CytRx and the University of Massachusetts, I wonder why the Press Release failed to mention UMass as a licensor for Tuschl I to Alnylam while acknowledging Max Planck Innovation Gmbh, the MIT, and the Whitehead Institute for Biomedical Research.
4) Alnylam management states continued interest by Big Pharma and biotech for a piece of the RNAi platform. More significant deals are possible, if not certain. Also, Novartis is more likely than not to exercise its adoption license for Alnylam’s IP. Such deals should strengthen the company’s balance sheet beyond their guidance of over $435M in cash at the end of this year.
What a week!
Tuesday, May 1, 2007
RNAi Therapeutics Companies
There are a few dozen companies now, small and large alike, that have started developing drugs based on RNAi. While most of them are in the pre-clinical stages, in 2004 Acuity Pharmaceuticals (soon to be known as Opko) was the first to start phase I trials for age-related macular degeneration (AMD). Since then 5 more programs have entered the clinic: 2 additional ones for AMD (Sirna Therapeutics, acquired by Merck in 2006 for the handsome sum of $1.1 billion; and Quark Biotech), and one each in RSV (Alnylam Pharmaceuticals), diabetic macular edema (Acuity), and acute kidney injury (Quark Biotech).
Due to reasons discussed in the previous post, almost all of these programs are Direct RNAi programs, i.e. the siRNA is administered close to the diseased site. All except for Acuity's program are also with siRNAs that have been chemically modified (to enhance stability etc), and it remains to be seen whether Acuity's strategy to plunge into the clinic first was a wise one. Sirna Therapeutics soon followed suit, but I think took the right decision to invest time to carefully think about how to position their potential product in the more and more crowded AMD market. Sirna Therapeutics was also the first public company based on RNAi. Formerly known as Ribozyme Pharmaceuticals, they leveraged their experience with RNAs to build an operation that had all the tools to to build a decent IP portfolio and quickly enter the clinic. This IP portfolio is mostly based on chemistry and targeting many genes one by one such that it could claim exclusivity for targeting those genes with RNAi. It remains to be seen, however, how this brute force approach will hold up in the patent courts. Also, ISIS pharmaceuticals may contest some of their chemistry claims. However, the strategy has paid off extremely well at least for those that engineered it with Merck's takeover of the company last year for about 50x the price it had been valued before it committed to RNAi. SR Pharma, known as of today as "Silence Therapeutics", of the UK, looks as if it was seting itself up for a similar sale with an almost 8-fold price appreciation since last year.
The brightest star in the sky of RNAi Therapeutics by far, however, is Alnylam Pharmaceuticals. This is the company whose scientific founders were seminal in the development of RNAi and microRNAs, particularly in humans. Consequently, the company sits on an unparalled exclusive IP portfolio that gives them freedom to operate and pursue highly lucrative deals with Big Pharma and Biotech. These deals should help it through the development phase and have brought in already well over $100M. All this is managed by a seasoned team, led by CEO John Maraganore, that has considerable experience in developing succesful biotech companies (many of them hail from Biogen). It is also the company mentioned by the Karolinska Institute in their explanation for the 2006 Nobel Prize Award to Fire and Mello, as having demonstrated the therapeutic potential of RNAi through ground-breaking studies. These studies represent important de-risking events that continue to attract academic and indrustrial collaborators and important investments, including the RNAi Therapeutics field as a whole.
Other notable companies involved in RNAi Therapeutics include Benitec, a pure-play Australian company that uses DNA-based RNAi vectors to tackle a range of viral diseases, Nastech Pharmaceuticals (not a pure-play; focuses on siRNA delivery and Dicer-substrate technology), and large pharmaceuticals such as Merck, Novartis, GSK, and Pfizer, and probably many more knocking on the doors of Alnylam and co.
Due to reasons discussed in the previous post, almost all of these programs are Direct RNAi programs, i.e. the siRNA is administered close to the diseased site. All except for Acuity's program are also with siRNAs that have been chemically modified (to enhance stability etc), and it remains to be seen whether Acuity's strategy to plunge into the clinic first was a wise one. Sirna Therapeutics soon followed suit, but I think took the right decision to invest time to carefully think about how to position their potential product in the more and more crowded AMD market. Sirna Therapeutics was also the first public company based on RNAi. Formerly known as Ribozyme Pharmaceuticals, they leveraged their experience with RNAs to build an operation that had all the tools to to build a decent IP portfolio and quickly enter the clinic. This IP portfolio is mostly based on chemistry and targeting many genes one by one such that it could claim exclusivity for targeting those genes with RNAi. It remains to be seen, however, how this brute force approach will hold up in the patent courts. Also, ISIS pharmaceuticals may contest some of their chemistry claims. However, the strategy has paid off extremely well at least for those that engineered it with Merck's takeover of the company last year for about 50x the price it had been valued before it committed to RNAi. SR Pharma, known as of today as "Silence Therapeutics", of the UK, looks as if it was seting itself up for a similar sale with an almost 8-fold price appreciation since last year.
The brightest star in the sky of RNAi Therapeutics by far, however, is Alnylam Pharmaceuticals. This is the company whose scientific founders were seminal in the development of RNAi and microRNAs, particularly in humans. Consequently, the company sits on an unparalled exclusive IP portfolio that gives them freedom to operate and pursue highly lucrative deals with Big Pharma and Biotech. These deals should help it through the development phase and have brought in already well over $100M. All this is managed by a seasoned team, led by CEO John Maraganore, that has considerable experience in developing succesful biotech companies (many of them hail from Biogen). It is also the company mentioned by the Karolinska Institute in their explanation for the 2006 Nobel Prize Award to Fire and Mello, as having demonstrated the therapeutic potential of RNAi through ground-breaking studies. These studies represent important de-risking events that continue to attract academic and indrustrial collaborators and important investments, including the RNAi Therapeutics field as a whole.
Other notable companies involved in RNAi Therapeutics include Benitec, a pure-play Australian company that uses DNA-based RNAi vectors to tackle a range of viral diseases, Nastech Pharmaceuticals (not a pure-play; focuses on siRNA delivery and Dicer-substrate technology), and large pharmaceuticals such as Merck, Novartis, GSK, and Pfizer, and probably many more knocking on the doors of Alnylam and co.
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