Data from Nucleonics HepB DNA-directed RNAi Therapeutics Study Published

Following major IP battles with Benitec and tensions high within the company, DNA-directed RNAi Therapeutics company Nucleonics became the first major RNAi Therapeutics company to go out of business in 2008. During the liquidation process, Alnylam surprised observers by scooping up Nucleonics’ IP assets. Adding to the confusion, Nucleonics had just initiated dosing in a phase I study of NucB1000, a candidate for the treatment of Hepatitis B Viral infection. The fate of this trial has been a mystery.

Now, after three years, scientists and clinicians involved in the study broke their silence and reported data from the study in the journal Antiviral Therapy (Gish et al., 2011). The results from the prematurely terminated study that had enrolled only three patients in the first dose cohort were largely in line with (at least my) expectations. More surprising, however, were some disclosures related to Alnylam’s apparent interest in NucB1000 and DNA-directed RNAi Therapeutics.

NucB1000 Background

The active ingredient of NucB1000 is a plasmid DNA that encodes for 4 shRNAi triggers targeting various regions of hepatitis B virus. The ability to easily accommodate a number of RNAi trigger sequences in one clinical candidate is one of the advantages of ddRNAi Therapeutics and particularly useful for antiviral applications as it should minimize viral escape. Using ddRNAi as opposed to a synthetic siRNA for HepB infection is also reasonable given the chronic nature of the disease.

This, however, is about it in terms of the positive attributes of NucB1000. The reason why I never thought this candidate had even a remote chance of clinical success is the fact that it uses a cationic lipid formulation to deliver the DNA to affected hepatocytes. Unlike the efficient liposomal delivery of small, synthetic siRNAs to the cytoplasm of hepatocytes, the field of gene therapy is still far away from using non-viral means to efficiently deliver large plasmid DNA- about 100-200x the molecular weight of siRNAs- to the nuclei of hepatocytes where the DNA can serve as the template for shRNAi trigger transcription. It is not just the size that complicates the cellular uptake and release of the nucleic acid, but the requirement for getting the DNA from the cytoplasm to the nucleus is the major rate-limiting step differentiating it from synthetic siRNA delivery.

The authors addressed this deficiency by stating that even if uptake efficiency was limited per given plasmid infusion, the long-lived expression from the plasmids means that it may be possible to achieve ddRNAi activity in sufficient numbers of hepatocytes simultaneously by multiple administrations. While I can follow the logic, in the absence of convincing pre-clinical data of this concept, it remains just that, a concept.

Of equal concern is that cationic lipid-formulated large plasmid DNA carries a high risk of triggering innate immune stimulations following intravenous administration. This has already been a challenge for lipid-formulated small siRNAi triggers, but it is less of a fundamental challenge there because of the limited sequence information in a given siRNA. This means that any inherent innate immune stimulatory potential can be relatively easily controlled by chemistry. The much larger plasmid DNA, which typically is of bacterial origin, does not allow for such control.

I should mention that in light of these concerns the authors state that no apparent immune stimulations were observed in the mouse and dog studies at much higher dosages than were anticipated for the trial.

Nevertheless, it is surprising to me that the FDA allowed this trial to go ahead based on pre-clinical co-transfection efficacy results that appeared to me to be glorified in vitro, and not in vivo models of HepB infections. It may be for this reason that the study authors made the point that they saw antiviral efficacy in a model that did not involve co-transfection:

‘Preliminary data showed that 1% of mouse hepatocytes were transfected. Subsequent experiments in which spike recovery was performed demonstrated that nearly 10% of cells were transfected; actual rates varied between 6% and 9% (Nucleonics, Inc. and Alnylam, unpublished data). A number of explanations for the discrepancy between this rate and the 20% knockdown of HBsAg have been postulated.’

‘A 20% knockdown of HBsAg’ to me does not sound like a robust pre-clinical efficacy result in support of clinical studies. I doubt that the FDA would have let the IND application pass solely based on this animal efficacy model.

I know, a non-viral ddRNAi approach sounds great on paper, and would you believe it, not just the VC investors and Nucleonics management were fooled, but also a company like J&J was about to contribute a fair amount to a planned $25M round C capital raise.

NucB1000 phase I results

Altogether only 3 of the planned 15 patients received NucB1000 in the phase I study. This was the first dose cohort which involved 5mg of plasmid DNA, ~0.06mg/kg. As expected, immune stimulation was observed in all 3 patients: a transient fever, accompanied by cytokine elevations, which quickly resolved following antipyretic treatment. This was described by the authors as a mild event and not a reason why patients would have dropped out of the trial- definitely not ‘life-threatening’.

Needless to say, given the nature of NucB1000 and the size of the trial, no signs of antiviral efficacy was seen.

To this day, it is not clear to me why exactly the trial was terminated. Did Nucleonics and their investors attempt a Hail Mary with the first dose cohort before cutting their loss on an increasingly improbable investment, or did they suddenly get cold feet as allegations of scientific misconduct relating to the pre-clinical data were raised? Given that money and lawsuits were involved, I favor the former with the latter serving as justification.

Curious publication

Overall, the Gish et al. paper is a most unusual one. The introduction already states:

'The proprietary nature of these data imposes limitations; however, the authors felt the results merited presentation and discussion as they involve a first-in-human study with potentially important clinical implications.'

I agree that the data was valuable, if not somewhat predictable, and am glad the authors had the courage to publish them. At the same time, the publication can also be read as a justification for why the trial went ahead.

It is also a curious publication because it suggests that Alnylam did not just acquire the Nucleonics IP estate to bolster its synthetic RNAi IP, as Barry Greene stated at the time, but that it was quite a bit more interested in DNA-directed RNAi Therapeutics in general, and NucB1000 in particular than one would have thought. While it cannot be determined conclusively how much NucB1000-related work was actually performed on Alnylam’s dime, the following passages suggest that it was not insignificant:

‘Exhaustive cell culture studies have demonstrated specific down-regulation of all HBV RNAs, including pregenomic RNA as compared with mismatch controls (Nucleonics, Inc.; Alnylam Pharmaceuticals; CS and CP, unpublished data; Recombinant DNA Advisory Committee).’

‘Additionally, significant inhibition of HBV antigen expression and viral replication is also observed, and is consistent with mRNA knockdown (Nucleonics Inc. and Alnylam Pharmaceuticals; CS and CP, unpublished data).’

'When administered intravenously, the nanoparticle been shown in preclinical models to transfect hepatocytes and delivers the eiRNA plasmid to hepatocytes and to the cells of some other tissues, such as the skin (Nucleonics, Inc. and Alnylam Pharmaceuticals, unpublished data).’

Etc, etc, I think you get the idea. But before Benitec supporters get excited about this, I would caution that Alnylam’s situation 3 years ago was much different from what it is today. With a dwindling cash reserve and after Tuschl, Tekmira, and Bass, Alnylam’s appetite for confrontation and lawsuits should have cooled considerably.

This story is yet another example of how concern about appearances (virus = scary) and short-term profit thinking (questionable model systems and lack of scientific rigor) in RNAi Therapeutics caused precious capital to flow into undeserving projects and lawsuits.

Marina Biotech Continues to Drive Sector Consolidation, Acquires Novosom’s Liposomal Delivery IP

Marina Biotech, formerly known as mdRNA, continues to snap up assets in the oligonucleotide therapeutics and diagnostics space, this time acquiring the liposomal delivery IP from Novosom, a privately held drug delivery company based in Germany. This comes only a week after shareholders approved mdRNA’s merger with tkRNAi company Cequent Pharmaceuticals to form Marina Biotech. It will be curious to see whether Marina’s strategy of challenging Alnylam's industry-leading position by taking advantage of the depressed market for oligonucleotide therapeutics will succeed in luring Big Pharma and pay off for shareholders. The investment this time: $5M in newly issued stock.

Similar to Silence Therapeutics, Marina acts on the premise that in order to capture those lucrative partnerships, being able to provide a choice of delivery technologies, plus some claims in RNAi triggers, too, is key. This, of course, is in contrast to Tekmira’s so far quite successful strategy of doing one thing very well, meaning clinically maturing and expanding the applicability of its industry-leading SNALP delivery technology and avoid some of the deal frenzy and dilution of effort.

By the looks of it, Novosom has to be considered one of the more bona fide delivery companies. Similar to Tekmira’s SNALP, Novosom’s SMARTICLES can change their surface electrical charge and therefore reconcile (serum and storage) stability with endosomal release functionality. Unlike SNALPs, however, these liposomes also contain anionic lipids, in addition to cationic and neutral lipids, and do not employ PEG stabilizers. This stability can be attributed to the negative charge of SMARTICLES at phyisiologic pH which ought to avoid various interactions with host factors and resulting toxicities often associated with positively charged lipids. However, as the pH acidifies upon endosomal uptake of these particles, they become positively charged and competent for membrane disruption and cytoplasmic release. For similar reasons, ionizable SNALPs as practiced by Tekmira not only employ PEGylation, but are also essentially uncharged at physiologic pH.

In terms of IP, from the looks of it, Novosom has assembled a respectable IP estate with various fairly broad patents granted also in the important US market. This should provide Marina with considerable options to leverage its other liposomal assets, trp-cage targeting technology and amino acid-derived lipids, that I have felt lacked robust patent protection when used in liposomal formulations similar in composition to Tekmira’s SNALPs.

Theory and IP, of course, are only part of the equation. In terms of actual data, the literature bears out the tolerability of these liposomes. In terms of in vivo knockdown efficacy, I haven’t really seen much for liposomal delivery of siRNA in the peer-reviewed literature. There was, however, a paper on the liposomal delivery of a CD40 antisense oligo (under license from ISIS) in a rodent inflammatory disease model and that supported specific CD40 knockdown and disease amelioration while the unformulated antisense oligo appeared to be inactive. In general, based on the literature and also Novosom’s website, their technology seems to be in the late rodent stage and yet to be validated in larger mammals including non-human primates and Man.

There should, however, be an open IND for the delivery of a DNAi compound (no mis-spelling) by PRONAI which makes use of Novosom’s technology. However, it appears that PRONAI’s funding situation may have delayed actual dosing.

Novosom also entered into at least 2 collaborations with RNAi companies. One with (now defunct) DNA-directed RNAi company Nucleonics for treating hepatitis viral infections, and one with Boehringer-Ingelheim for the validation of drug targets in the liver and lung. Again, because Novosom is a private company I can only speculate whether the lipids used by Nucleonics in their soon aborted phase I study stemmed from the Novosom collaboration. Similarly, the status of the Boehringer-Ingelheim collaboration is unclear to me. Who knows, but maybe Boehringer-Ingelheim is actively looking for (liposomal) delivery and triggers for the development of RNAi Therapeutics, which raises another point: although the press release did not specify this, but selling what looks like the entire IP estate would appear to be tantamount to selling the entire company, existing partnerships and programs included.

But back to the fundamental question: Consolidating into a one-stop-shop, almost an ‘anti-Alnylam’, a la Marina and Silence versus technological deep-dive a la Tekmira- which strategy will create more shareholder value? The next 3 months should provide for some of the answers.

Please let your voice be heard and vote on the right.

HBV Collaboration between Benitec and Biomics Indicates Shift in DNA-directed RNAi Therapeutics towards Asia

My four years as a post-doc here in Stanford, during which my advisor Mark Kay served a term as the President of the American Society for Gene Therapy, taught me that drug development is as much about politics and perceptions as it is about the science.

This is particularly true when it comes to gene therapy and it is no surprise that despite pre-clinical data that, taken together, often surpassed that obtained with synthetic siRNAs, DNA-directed RNAi (ddRNAi) Therapeutics is struggling for funding in the corporate world. Targeted Genetics is a prominent example of a gene therapy company that despite much scientific (AAV-delivered RNAi data for Huntington’s Disease) and clinical progress (saving patients from blindness) is now facing bankruptcy. The reason? The regrettable death of a patient in a Targeted Genetics-sponsored clinical trial that has now been linked by experts to a immuno-suppressive monoclonal antibody the trial participant had been taking. The case was taken to the level of an NIH RAC (recombinant advisory committee) hearing, and synthetic oligonucleotide therapeutics companies are quite right in being scared that they, too, may be subject to RAC review in the future. I wonder what the outcome was from a recent meeting to discuss just this matter.

I am aware that gene therapy carries risks. Western society, however, needlessly deprives itself of potentially life-saving treatments when it chooses to suppress the entire field following isolated, albeit very unfortunate cases of adverse events linked to gene therapy. Then there are the so called ethical concerns of changing the human genome by introducing DNA into our cells as if sick patients had the luxury of worrying about this. By contrast, news of drug-related deaths in clinical trials of small molecules, many of which unlike the commonly used viral vectors have never been introduced into the human body, hardly ever reaches the wider public.

This week’s memorandum of understanding between Australia’s Benitec and China’s Biomics to collaborate on a DNA-directed RNAi therapeutic for chronic hepatitis B virus (HBV) infection may be a sign that the near to mid-term future for ddRNAi may instead lie in the economically vibrant parts of Asia. Here, practicality and an eagerness to adopt innovation means that gene therapies fall on much more fertile ground, including funding. Just last year, Benitec spin-off Tacere signed a similar deal with Japan’s Oncolys for the development of an ddRNAi Therapeutics for another viral disease of the liver, hepatitis C virus (HCV) infection.

Funding and access to R&D may have been financially struggling Benitec’s main motivation to reach out to Biomics. Also, Biomics provides Benitec with a foothold in a country that faces end-stage liver failures and hepatocellular carcinoma caused by chronic HBV that are of epidemic proportions. On the other hand, while Biomics, a biotech company with locations also in the US and that, with the help from some former Nastech employees, strives to transform itself from a mainly RNAi research-reagent company into an RNAi Therapeutics developer, certainly appears to enjoy better economic health and brings with it RNAi know-how, ideally it would have complemented Benitec ddRNAi patent estate and insights into shRNA design by providing an advanced delivery technology, maybe AAV. Although it is possible that they have such a technology, this is not apparent from the company's website which describes a range of delivery modalities that they are apparently working on.

For RNAi Therapeutics in general, Asia not only provides a growing market, but also an enormous R&D opportunity with many highly trained, detail-oriented chemists and increasingly also biologists to draw from. I am often surprised for example how many chemistry- and gene therapy-based publications on RNAi delivery come out of a country like Korea which is relatively minor in terms of biomedical research budgets, yet is little capitalized on due to lack of risk capital there. As for the IP situation in a country like China, I believe that once it becomes relevant, that is in maybe 7-15 years, China should be more aligned in this regard with the rest of the world and it would be a mistake not to make an effort of protecting your RNAi Therapeutics IP there, too.

HBV played a prominent role in the history of RNAi Therapeutics. Both synthetic (SNALP RNAi) and DNA-directed approaches proved successful in repressing HBV replication in mouse models. Since suppression of viral replication is a well-accepted measure for predicting HBV treatment success, RNAi Therapeutics should very well be able to complement current interferon-alpha and nucleoside analogue-based standard of care that result in unsatisfactory treatment success rates of only 20-30%. Due to the nature of the disease, however, it is unclear to me whether synthetic siRNAi or ddRNAi would be preferable. However, since treatment success by nucleoside replication inhibitors requires long-term treatment, probably due to the persistence of viral DNA in hepatocytes, a gene therapy approach has certainly theoretical justifications.

And finally, following Nucleonic’s fall and the situation around Targeted Genetics and Benitec, it is time for the entire RNAi Therapeutics field to think about creating a strong ddRNAi Therapeutic company before much of the IP is squandered. Consolidation of these efforts into a re-capitalized Benitec (disclosure: no current investments) may be one, although not the only option.

The Potential for AAV-mediated RNAi Therapeutics

There is good reason to believe that synthetic siRNA-mediated RNAi Therapeutics should emerge as the most commonly used form of RNAi Therapeutics. Nevertheless, DNA-directed RNAi Therapeutics also has a number of potential uses where it should not only be competitive with, but even superior to synthetic RNAi. Unfortunately, the commercial development of DNA-directed RNAi Therapeutics has been somewhat hampered due to litigation and other management issues as well as funding problems that all things “gene therapies” face. In an effort to dispel some of the myths surrounding DNA-directed RNAi Therapeutics and since I’m somewhat familiar with particularly AAV-mediated DNA-directed RNAi, I would like to take the opportunity here to briefly highlight some of the potential applications for this particular technology.

DNA-directed RNAi can either by delivered by non-viral or viral means. For the most part, current systemic non-viral delivery technologies for DNA vectors that need to get into the nucleus for functional activity may not be adequate as a result of their inability to transfect sufficient cell numbers as well as support long-term expression. By contrast, viral vectors, particularly AAV and lentivirus, are capable of very efficiently and stably transducing many cell types. In fact, in vivo potencies are often greater than with most current synthetic RNAi methods with essentially knock-out phenotypes in the liver and eye observed for months and years using self-complementary AAV8 vectors in work reported by the laboratory I work in and collaborators to name just one example.

Before focusing more on AAV with which I am most familiar with (learning by osmosis), lentivirally delivered RNAi has much potential for disease of the CNS, largely for the same reasons as outlined for AAV below, and in combination with cell therapeutics. The latter would involve the ex vivo transduction of lentiviral RNAi constructs for example into stem cells similar to the ongoing phase I HIV-RNAi trial by the City of Hope and sponsored by Benitec, or also to enhance dendritic cell cancer vaccine strategies. Many of these applications take advantage the stable integration of lentiviral vectors into the host genome such that the vector and its expression/knock down will be maintained even in dividing tissues.

By contrast, due to its largely episomal nature, AAV gets rapidly during cell division thus limiting their applicability for cancer therapy or in other situations that involve cell division (regenerating liver, stem cell differentiation etc). Moreover, in certain settings humoral and T-cell mediated immune responses against AAV viral proteins present another challenge for achieving persistent gene silencing (the transduced cell may be recognized by the immune system and be eliminated) and where repeat-administration is desirable (due to neutralizing antibodies generated following the first administration).

For these reasons, AAV RNAi appears most promising for diseases of the eye and CNS as immuno-privileged sites. Although infusion pumps may address some of the challenges of allowing for long-term intracranial gene silencing by synthetic means, due to the ability to mediated sustained gene silencing for 6-12 months if not several years as suggested by canine AAV studies for hemophilia, the prospect of maybe having to subject a patient only once or very few times to an invasive operation makes AAV and lentivirus attractive alternatives for diseases such as Huntington’s Disease and other neurodegenerative disorders.

Not coincidentally, Targeted Genetics and the University of Iowa are currently pursuing an AAV RNAi program (pre-clinical stage) for Huntingon’s Disease that has shown promise. A critical factor for the success of this program should be the design of the shRNA expression cassette, and I personally would feel more comfortable with an H1 promoter-driven instead of a U6 promoter-driven construct that has been the front-runner so far. Another interesting application may be for the treatment of PML viral infection. Biogen Idec and Alnylam have been working on an siRNA-mediated approach, but due to serious nature of JC virus reactivation during PML, rapid onset of gene silencing by self-complementary AAV RNAi and the efficient vector delivery achieved for a number of neuronal cell types, AAV-mediated RNAi warrants consideration for this devastating disease.

Suitable non-CNS applications for AAV ddRNAi candidate may be instances where a single administration may already be therapeutic without the need for sustained gene silencing and repeat administration. HCV infection of the liver may be one such case as it is now possible to essentially transduce every liver cell, at least in mice, and effect long-term silencing after a single administration. AAV-medicated RNAi could therefore be an important component of combination therapies for patients that do not respond to current therapies and could also quite easily be tailored to the different HCV genotypes. Pfizer just recently acquired co-development rights for the pre-clinical stage AAV RNAi program for HCV from the Benitec spin-off Tacere.

AAV gene therapy is relatively new, but it is making rapid progress. Two independent phase I/II AAV gene therapy trial for Leber’s Congenital Amaurosis caused by RPE65 deficiency, a condition that leads to blindness later in life, demonstrated clear improvement in vision and treating children early on promises to even cure the disease. One of the studies was conducted by an academic group in London and was sponsored by Targeted Genetics, the other by a group from the University of Pennsylvania.

It is not clear whether an immune reaction that eliminated transduced liver cells in a hemophilia trial was specific for the AAV 2 serotype used, as most of us will have been exposed to this type of AAV during childhood and may therefore harbor some immune memory for it. A number of strategies have been proposed to minimize the risk of immune recognition in future trials, for example transient immune suppression or the use of alternative serotypes. The search for and development of alternative AAV serotypes is truly exploding and is rapidly yielding new AAV vectors with various tissue tropisms and immune properties.

The less AAV that needs to be administered the better also from an immune point of view. Very promising in that regard is the finding that the self-complementary AAVs which by-pass the rate-limiting second-strand synthesis step during the establishment of gene expression much more efficiently and functionally transduce target cells than conventional single-stranded AAV vectors. While this halves the vector capacity to less than 2kb, a size that is not very practical for expressing many protein-encoding genes, this does not matter at all in the context of small hairpin expression cassettes and appears to be just made for AAV RNAi. Actually, it was this property of self-complementary AAV vectors that was one of the main reasons for me to come to Stanford to conduct post-doctoral research. A patent for this possibly critically enabling technology has been issued to Targeted Genetics.

RNAi Therapeutics Portfolio Review: Increasing Position of Targeted Genetics

The technology is certainly there to be harnessed for therapy, but the development of AAV RNAi Therapeutics is not trivial and is a collaborative effort that requires careful gene target selection, safe and potent hairpin vectors, thoughtful clinical trial designs, and the manufacture of large amounts of high-quality AAV particles. Nevertheless, with the right team and some luck, it should possible to do.

It has both amazed and scared me to learn in a vivid report by RNAiNews that DNA-directed RNAi company Nucleonics whose lead program was a very long-shot (to put it mildly) RNAi program for HBV, was close to raising $25M in a series C round that would have included a venture capital arm from Johnson & Johnson. How that was even a remote possibility given the odds for that particular HBV RNAi program and the uncertain IP of that company is a mystery to me and makes the ~$13M market cap of Targeted Genetics’ look very cheap by comparison.

For this reason and given the promise of AAV-mediated RNAi Therapeutics in general, Targeted Genetics’ AAV gene therapy know-how and IP, including IP directly related to RNAi -especially the one for the double-stranded AAV and apparently another one for the expression of non-coding RNAs- I will add $680 worth of TGEN to the RNAi Therapeutics model portfolio and will pay for this with the sale of some stock in ISIS Pharmaceutcals (-$280), Oxford Biomedica (-$200), Silence Therapeutics (-$100) and Rosetta Genomics (-$100).

Remember, an investment in Targeted Genetics is highly speculative, its balance sheet somewhat ugly which is made worse by current market conditions which make it almost impossible to raise small biotech capital on reasonable terms. This investment thesis therefore is that Targeted Genetics will be able to win the race against the clock by being an attractive partner for other drug companies interested in RNAi Therapeutics with the resulting license fees and development milestones helping the company through the hard times. Maybe Genzyme with its considerable AAV gene therapy efforts and orphan disease management expertise or Biogen Idec with its long-standing ties to Targeted and interest in PML will bite.

Disclosure: The lab that I work in has an interest in AAV-mediated RNAi Therapeutics. The author has also been accumulating shares in Targeted Genetics between $0.58 and $0.72. The stock is not suitable for most due to adverse market conditions and the precarious balance sheet of the company. The thin trading volume of the stock causes volatilities in share price, usually to the downside, and there is a real chance that the stock will be de-listed from the Nasdaq exchange which will make this little company even more opaque to investors. On the other hand, conditions will improve at some point and in an environment where venture capital exits have become increasingly difficult and considering the attractive relative valuation and maturity of the company and technology, Targeted Genetics may represent an interesting, somewhat more liquid piece of RNAi Therapeutics real estate for investors otherwise specializing in private start-up companies.

Nucleonics in Liquidation While Benitec Shows Signs of Life

Just a day after boasting how RNAi Therapeutics continues to enjoy ample financial support in a tough economic environment, a google news alert indicates that Nucleonics is in liquidation mode.

Since its inception, Nucleonics has made more headlines with their IP battles with Benitec over DNA-directed RNAi supremacy rather than with good science, and must be filed under those early biotech companies that spent more money on administrative and legal expenses than R&D. The ultimate nail in the coffin may have occurred when a Federal Court denied Nucleonic’s wish for a declaratory judgment against Benitec’s patent claims last year, thus leaving the company and investors vulnerable to future lawsuits by Benitec.

While it has to be said in Nucleonics's defense that it wasn't solely responsible for the endless litigation, the obvious winner from this new development is Benitec. With their arch rival out of the game it may now find it easier to concentrate on drug development, although financing and IP issues remain of concern. Encouragingly, their collaborator on the HIV AIDS lymphoma program, John Zaia from the City of Hope, just recently presented at the annual ASGT meeting early interim phase I data on the successful transplantation of RNAi-modified hematopoietic stem cells in two patients (using lentiviral vector technology). It will be exciting to determine how safe and sustained RNAi expression is and whether the derived T-cells have a survival advantage compared to those derived from the unmodified stem cell fraction transplanted at the same time.

Coming back to Nucleonics, the apparent bankruptcy is also likely to affect their recent HBV RNAi clinical program involving the administration of a plasmid formulated with cationic lipid. We may never know about what happened to the first patients that received the plasmid, and maybe that’s good so. The Nucleonics experience shows that early IP battles are dangerous and costly, and that as the RNAi Therapeutics field matures it is becoming difficult to attract funding based on me-too technologies and long-shot scientific strategies.

Disclaimer: This Blog may not be based on reality and reflects my views as of today only.

RNAi Therapeutics: A Spoilt Market, or Waiting for Clinical Progress?

The market reaction to Alnylam’s deal with Takeda was, well, a bit disappointing. Although the argument can be made that next to the Sirna acquisition by Merck this has been the most favorable deal for the RNAi Therapeutics field yet, shares of Alnylam not only did not advance, but even declined on the news. Can the muted reaction be explained by a market spoilt by Alnylam’s RNAi mega-deals and that has come to expect an even larger cash component, or has Alnylam’s hinting at more deals given the shorts plenty of time to prepare for such an event by aggressively shorting the stock on the news as the considerable volume may have suggested? Possible. However, here I would like to consider the third possibility that for Alnylam’s stock to move to new highs, the market would like to see the deal making being complemented by scientific and clinical progress.

Actually, these platform licensing agreements are evidence for just that as the therapeutic areas covered by the non-exclusive license, namely metabolic disease and cancer, clearly indicate that the deal was driven by the maturation of liposomal RNAi delivery technology. Moreover, an important component of the Alnylam-Takeda relationship will be the exchange of RNAi delivery capabilities, suggesting that Takeda had also made progress in this area.

However, the bears would argue that what Alnylam, and the wider field, needs is further demonstrating progress with their development programs. Of course, we had the phase II ALN-RSV01 proof-of-concept data which was a great relief for everybody and should strengthen Alnylam’s position at the deal table if not on a PPS basis, but we should also remember that Alnylam had previously guided that it would advance one or two SNALP-related programs into the clinic in 2007. This has not happened and I can understand that some may have well been disappointed by that. Paradoxically, rather than reflecting science that has stalled, the delay can be explained at least partly by ongoing progress in SNALP RNAi delivery and it may not be wise to commit to a development candidate when improvements in both safety and efficacy can be made so readily as supported by recent conference presentations and publications.

Having followed biotechs for a while now, one major question I ask myself before investing in a biotech company is whether programs have been rushed into the clinic well before they have been properly validated pre-clinically. That often happens with small biotechs with acute fund-raising needs or when existing investors would like to exit and an IND is the goal, not final approval by the FDA. How otherwise could one explain e.g. Nucleonics’ decision to advance a plasmid-based, DNA-directed shRNA program for Hepatitis B into phase I when all the in vivo data consisted of some co-transfection studies (= glorified in vitro data) and when current non-viral plasmid delivery methods are unlikely to achieve the transfection rates sufficient for curing such a viral infection through direct gene knockdown. Next to Nucleonics, other early RNAi pipeline candidates, while somewhat more promising scientifically, may also serve the role of flag-waving programs demonstrating to investors that RNAi is not just a fascinating science, but also of clinical relevance.

Much has been learnt since the first candidates entered the clinic in 2004 and, like for SNALP RNAi in particular, it makes a lot of sense, also economically, to take advantage of the steep learning curve in general to increase the odds of late-stage pipeline success at the cost of slight early delays. Meanwhile, the irresistible expansion of RNAi into in vivo applications and the increasing number of RNAi-related conferences (another one, Beyond Genome, is just about to take place a little bit North of where I live) demonstrate that the field is vibrant and the science is making rapid progress.

If that weren’t enough, the coming months should bring more than enough RNAi clinical results to contemplate. Calando just reported this past week initial results from their phase I studies on CALAA-01, an unmodified siRNA in a targeted nanoparticle formulation for the treatment of solid tumours. According to their press release, the first patient has now completed a course of 4 intravenous doses over two weeks without any show-stopping adverse events. As this is the first clinical experience of systemically administered siRNAs, unmodified at that, it therefore also marks an important and reassuring milestone for the synthetic siRNA field in general. It is easy to envision scenarios how an adverse event could have had disastrous repercussions for RNAi Therapeutics. Well done, Calando!

Then there are the SNALP RNAi programs that, once entered, could yield relatively soon clear in vivo efficacy data on systemically administered RNAi Therapeutics. Finally, Benitec’s HIV program is another program that deserves some attention as quantitative patient data may emerge relatively soon; for example, an expansion of T-cells derived from the stem cells transduced with the lentiviral vector encoding for a triple-RNA antiviral relative to unmodified cells would be very promising.

In Focus: FDA allows Nucleonics to start phase I trial for HBV RNAi

Today, privately held Nucleonics announced it has received permission from the FDA to start phase I clinical trials using RNAi for the treatment of Hepatitis B Virus. I will take this as an opportunity to highlight potential merits and disadvantages of that particular program, introducing some general terms along the way.

Unless most other companies that develop RNAi therapies using synthetic small interfering RNAs (siRNAs), Nucleonics employs DNA-based vectors that direct the expression of so called hairpin RNAs that are then further processed by the endogenous RNAi machinery into small RNAs that are functionally identical to the synthetic siRNAs. This approach, also known as DNA-directed RNAi (ddRNAi), may be advantageous in that it potentially allows for a longer treatment effect due to the potentially longer activity of a DNA vector. RNA, by contrast, is a more short-lived molecule. In the case of Nucleonics, the "naked" DNA is delivered to the liver formulated with cationic lipids. Since hairpins are very short in gene-terms, a plasmid may harbor multiple hairpins and Nucleonics' has 4 of them. As each hairpin targets a different RNA of HBV, the multipronged approach should help minimise drug-resistance which is often seen with viral therapies based on inhibiting a single target. Indeed, other RNAi companies are likely to pursue similar multi-target approaches in their viral programs, Alnylam's flu pre-clinical program being one example.

So far the theory looks promising. However, I have a number of concerns with Nucleonics' program (these were also recently highlighted during a pre-IND meeting with an FDA advisory panel). The major problem is that the company did not have convincing data about in vivo efficacy in animals. They argued that this is due to a lack of appropriate pre-clinical animal models, but I would argue that those, e.g. mice that carry HBV in their genome, exist and should have been used for this purpose. Efficacy studies were consequently limited to tissue culture experiments and in a co-transfection "in vivo" model which really is nothing more than a glorified in vitro system. This means that although HBV silencing in such a model may approach 100%, this is simply because the HBV and ddRNAi vectors tend to go into the same cells during co-transfection. It appeared from their data, however, that only a small fraction of the liver cells received the ddRNAi (and HBV) plasmid, unlikely to be enough to have a therapeutic impact in a patient that carries HBV in a much larger and non-overlapping fraction of cells in the liver. It is likely that this is because in order to be active the DNA needs not only to get into the cell but also the nucleus, which is generally inefficient with non-viral DNA vectors. SiRNAs, however, have the added delivery advantage in that they are active in the cytoplasm and do not have to reach the nucleus. Their smaller size compared to DNA may also help.

In summary, while a lot of the scientific rationale for the trial appears sound, I see delivery as a huge hurdle for this particular RNAi program and am therefore quite skeptical.
For those interested in learning more about Nucleonics' strategy, please visit http://www.nucleonicsinc.com/products/hepb.html