Pharmaceutical Mega-Deals Could Delay RNA Therapeutics Partnerships

Pharmaceutical mega-deals are en vogue again.  Though not official, rumor is that Pfizer intends to acquire AstraZeneca for $100B, and deal engine Valeant has gone hostile on Botox maker Allergan with a ~$45B bid.  As if that weren’t enough for what was supposed to be a quiet Easter weekend, double-digit billion figures are being moved across the table in an asset swap between Novartis and GSK.   

The motivations for all these deals are essentially the same: squeezing out short-term profits by slashing R&D.  Valeant is an interesting example as it never pretended to be in the R&D game in the first place.  Instead, it exists on the notion that R&D is inefficient and risky and financial engineering through M&A instead of drug development is the only way to Big Pharma bliss.  Considering its spectacular rise to a ~$50B market cap company and a relentless increase in its share price, it has the goods to show for it. 

Pfizer, on the other hand, like all Big Pharmas likes to tout its R&D prowess webcast after webcast, R&D day after R&D day, but in fact is the worst offender when it comes to squeezing profits from slashing R&D.  In just 5 years following its acquisition of Wyeth, the R&D budget of the combined companies has been cut in half.  AstraZeneca is partly a juicy target because it was forced to be more risk-taking in its R&D as it gained the reputation to be the Big Pharma with the least innovative and effective R&D. 

As a consequence of this, AstraZeneca has become one of the most active Big Pharma in RNA Therapeutics with deals in antisense (ISIS), microRNAs (Regulus), RNA modulation (PTC Therapeutics), and most famously the 2013 $240M upfront mRNA Therapeutics deal with Moderna. 

Unfortunately/fortunately, depending on whether you think Big Pharma involvement in RNA Therapeutics is a good thing or not, the other two deal protagonists from this weekend, Novartis and GSK are also amongst the Big 4 Pharmas in RNA Therapeutics (Sanofi/Genzyme being the 4^th).

In addition to cost savings by cutting R&D outright, RNA Therapeutics deals could also be affected by Big Pharmas becoming pre-occupied with re-organizing.  This is based on experience as the narrative is that when Pfizer acquired Wyeth in 2009, Wyeth had by far the superior RNAi development effort, but that this fell victim to the acquisition.  Similarly, when Roche acquired Genentech the same year, RNAi Therapeutics quickly fell down the priority list.

What deals may be canceled or at least delayed as a result of these developments? 

mRNA delivery is the first one that comes to mind as I believed AstraZeneca to be under pressure to do something in this area after having spent probably $300M on mRNA Therapeutics by now.  

We have already heard about Novartis which had been another top pick for a delivery deal to go with its target picks from Alnylam.

Fortunately, RNA(i) Therapeutics is in a different position from what it was in 2009.  Cashed up and with robust, clinically validated technologies, a number of companies do not depend on dilutive Big Pharma deals any more- at least for now.  Let the deals therefore happen.  They will only accelerate the demise of the old pharmaceutical model to be replaced by innovative biotech companies.  

Antisense Comparison Provides Hope for RXi’s Dermal Scarring Drug Candidate

In early December, RXi reported phase I data from new cohorts that were added to the multi-dose study of RXI-109 in dermal scarring.  Accordingly, by increasing the dose to 10mg self-delivering RNAi trigger from previously 7.5mg per injection site, the company was now able to achieve a 50% target CTGF gene knockdown (5 and 7.5mgs: 43%). 

Based on the meager 30-40% knockdowns and apparent efficacy that were observed in comparable clinical studies targeting the same CTGF with a phosphorotioated antisense compound at 5mg per cm scarline_­, the prospects of RXI-109 would suddenly appear to be much brighter.  Of course, the ISIS compound was spun out into Excaliard which was then acquired by Pfizer in late 2011 for the apparently promising data observed with the dermal scarring candidate EXC001.  EXC001 is now in late-stage clinical development.

Of course, there are a number of caveats with this reasoning.  For one, although the study protocols appear very similar, it is possible that the tissue biopsies taken to obtain the CTGF knockdown measures were of dissimilar sizes.  Given that CTGF knockdown can be expected to wane quickly away from the injection site, such differences could have a material effect on the apparent knockdown efficacy. 

On the darker side, when you consider a nice visual therapeutic effect (see picture) in light of a 30-40% knockdown, you start to wonder whether the actual effect on scarring was less due to blunting of CTGF expression and more due to some non-specific immune-related effect of the phosphorothioate backbone in the antisense compound.  The RXI-109 compound may not ‘benefit’ from such an effect.

Nevertheless, the 10mg dose results are a step forward and form a useful basis for the phase II studies that RXi Pharmaceuticals will be rolling out this year in lower abdominal scar revision (already initiated), keloid scar revision, and scar revision following cosmetic breast surgery.  

Unfortunately, prospects would have been even brighter had the company employed a more potent RNAi trigger design.  And when the CEO, in 2014, still shows a slide with Kreutzer-Limmer controlling dsRNA lengths of 15bp and over (to justify the use of dsRNA < 15bp), I would suggest they update their presentation slides.  Similarly, it would be honest to not talk about a market cap of $50M, but to present their more meaningful capital structure, including preferreds and the like.

Fate of Quark Wet AMD Program in Limbo

PF-4523655 is arguably RNAi's most advanced clinical candidate. A naked, 19bp blunt-ended intravitreally injected AtuRNAi molecule, it had completed a phase II study in diabetic macular edema (DME) for which the results suggested a benefit over laser treatment; there was another phase II study of the same molecule in wet age-related macular degeneration (wet AMD) for which Quark, along with partner Pfizer had yet to report results.

These studies were also important for Silence Therapeutics, as an advance of any of these programs into phase III would have spelled the long-awaited non-dilutive funding (about $4M). Unfortunately, despite the suggestive DME efficacy data, Pfizer was not satisfied with the commercial competitiveness of the results in light of the newer VEGF pathway inhibitors. Therefore, Pfizer and Quark agreed that Quark would run a phase IIb study on its own dime testing higher doses of ‘655 in a head-to-head trial with VEGF MAb Lucentis. Pfizer would retain opt-in rights.

Still, the results from the wet AMD trial were outstanding. Expectations were relatively low though as in March 2011, as Quark attempted (yet again) to go public, the company disclosed that ‘655 was ‘not superior’ compared to Lucentis at the primary endpoint. Still, full results remained to be reported, probably in H2 2011. These results, however, never came. Since clinicaltrials.gov indicated that the study had been completed, it became obvious that there had been no positive surprises.

In its full-year results presentation, Silence Therapeutics today confirmed that while ‘[t]he trial demonstrated a dose-dependent increase in benefit of PF-04523655. Quark is now awaiting results from the Phase IIb trial in diabetic macular oedema before deciding on plans for the drug in age-related macular degeneration.’ In other words, not good for Quark and not good for Silence Therapeutics either: the fate of the wet AMD program now depends on the results from the phase IIb DME trial. It also seems that, like for DME, Pfizer has handed back the compound to Quark for wet AMD based on changes in the clinicaltrials.gov database in November 2011 that show ‘Pfizer’ being changed to ‘Quark’ in a number of entries relating to the sponsor of the trial. The silence (small letter) by Quark can be explained by the fact that it seems to have given up on going public for the time being.

From a medical point of view, the DME and wet AMD developments are a pity. If it is indeed the commercial profile vis-à-vis the protein-based VEGF pathway inhibitors that is keeping ‘655 from going into phase III, and not lack of efficacy, it may indicate some unjustified bias against RNAi Therapeutics. Both classes are intravitreally injected and there are many patients that are dissatisfied with the efficacy of these proteins. As a result, patients seek help from (expensive) treatments (such as acupuncture) that have not passed, or even undertaken formal clinical studies. What would be attractive with a molecule such as ‘655 is that it is not supposed to work as a VEGF pathway inhibitor and would thus offer a complementary mechanism of action (anti-apoptotic). On the other hand, since Quark has been so coy with the data, I suspect that bias alone may not explain Pfizer’s decision. Maybe with a sounder basis of delivery, next-generation RNAi Therapeutics candidates can address that void.

Big Pharma RNAi Therapeutics Backlash Shows Signs in Literature

There has been some unhappiness among certain Big Pharma companies about their adventures in RNAi Therapeutics. Roche, Pfizer, and Abbott Labs were among the publicized companies that discontinued RNAi Therapeutics platform development efforts not too long ago. Unsurprisingly, you could hear criticism from these companies about alleged immaturity of the technology and having been misled by the RNAi Therapeutics industry. Some of that backlash can now be felt in the peer-reviewed literature. Two recent papers by Abbott and Pfizer allow us to gain further insight into the causes of this unhappiness based on their actual practical experiences with the technology.

Pfizer: If it’s not ‘naked’ or involves invasive routes of administrations, we aren't interested

Pfizer, famous for its track-record of turning life-style drugs into blockbusters, apparently made the decision to pursue phosphorothioate LNA antisense over RNAi Therapeutics. As could be deduced from comments by then Pfizer oligonucleotide therapeutics chief Art Krieg that the need for intravenous administration makes a number of RNAi delivery technologies much less attractive, this was partly driven by concerns about patient convenience. Somewhat related and as could be seen from Pfizer’s conference abstracts, Pfizer also abhorred the complexity of some RNAi formulations. Consequently, instead of having therapeutic efficacy drive their research, Pfizer tried to make RNAi conform to their commercial principles (convenience and simplicity) meaning that they asked RNAi do what it is not suited to.

This type of scientifically conflicted approach was also exhibited in a paper by Pfizer published this month in Molecular Therapy (Moschos et al.: Uptake, Efficacy, and Systemic Distribution of Naked, Inhaled Short Interfering RNA (siRNA) and Locked Nucleic Acid (LNA) Antisense). The researchers set out to test the utility of unformulated siRNAs or LNA antisense for knocking down genes in the lung following intratracheal administration. To their disappointment, they were not able to observe target gene knockdown in the lung by either RNAi or LNA phosphorothioate antisense. This, of course, is in contrast to Alnylam’s studies that claimed that unformulated, unmodified siRNAs were an effective way to knock down genes in the respiratory epithelium and therefore fight respiratory syncytial viral (RSV) infection via RNAi gene knockdown.

Another surprising (this time for real) observation from these studies was that quite a bit of the unformulated oligonucleotides apparently made it into the systemic circulation following intratracheal administration, and as would be expected from the pharmacology of unformulated siRNAs and phophorothiote antisense, they were then either rapidly excreted into urine (siRNAs) or in the case of phosphorothioate antisense accumulated in various tissues, essentially identical to their biodistributions following intravenous or subcutaneous administrations.

For antisense therapeutics, inhalation may therefore be an interesting new route of administration for systemic therapy (e.g. knocking down ApoB in the liver). No more needles and injection site reactions.

In summary, Pfizer came out disappointed on RNAi Therapeutics as it approached it in one of the worst possible ways. Whether this ‘naked’ oligonucleotide thinking is really a choice or also reflects lack of know-how and technology access, only Pfizer really knows. As could be seen from the author affiliations in the paper, a number of scientists lost their jobs over this strange approach towards developing RNAi Therapeutics.

Abbott: Even the much-touted ‘SNALP’ cannot satisfy our cancer needs

The next technology to receive a scolding from Big Pharma, in this case the siRNA Therapeutics group from Abbott Labs, was…SNALP. The Li et al. paper published online in Gene Therapy at the end of September investigated the use of SNALP for knocking down genes in solid tumors. For this, they used their mouse cancer model where either a beta-gal or luciferase reporter gene in cancer cells was suppressed by the tetracycline repressor, tetR. Knockdown of tetR causes the derepression of the reporter genes which can be used as a marker of RNAi activity. They used SNALP because they had, in their own hands, previously identified it to be the most effective delivery system using this model system (Lin et al. 2011).

To summarize the results, Abbott found that SNALP-mediated gene knockdown was most effective in cells close to the vasculature. Cells in areas further removed did not exhibit knockdown sufficiently potent to cause the de-repression of the reporter gene. This in fact is in line with what is known from the pharmacology of similar liposomal particles and is relevant for the development of ALN-VSP02 and TKM-PLK1, two SNALP-delivered RNAi Therapeutics in clinical development for solid cancer: higher vascularized tumors will likely respond better, and the target gene should allow for strategies where a tumor can be killed from the vasculature outside in. It’s also not like all small molecules or antibodies would homogenously distribute within a tumor.

Overall, the Abbott scientists did not seem all too pleased as the following concluding remarks of that paper show: ‘Although, in a general sense, the impact of tumor vasculature on nanoparticle-mediated delivery is not surprising, it is enlightening that the delivery efficiency of SNALP, the perceived current state of art in siRNA delivery, is still severely limited by tumor vascularity.’

Not surprising, but enlightening...Apparently, Abbott people have also lost their jobs over RNAi Therapeutics, so some of the bitterness is understandable. On the other hand, when I look at the Big Pharma RNAi literature and conference abstracts, perhaps with the exception of Merck, I see little problem solving or innovation. Instead, it is dominated by passive technology evaluations, often using home-made brews rather than the original stuff, or pretty mundane process development studies which, in the absence of viable delivery technologies, seems like putting the cart before the horse. It is even possible that having these internal RNAi groups has been harmful for allowing the technology to get a fair evaluation in Big Pharma as such groups may cause the companies to become too much inward-looking, protective of one’s own people, instead of tapping into what is already out there. Without owning a leading delivery technology themselves, the best strategy may be for Big Pharma to just license product candidates instead of trying to build their own RNAi Therapeutics platforms in-house.

Preview: Phase II Study of AtuRNAi PF-04523655 for Wet AMD

PF-04523655, formerly known as RTP-801i, is the clinically most advanced RNAi Therapeutic candidate and has been in two phase II studies for diabetic macular edema (DME) and the exudative form of age-related macular degeneration (wet AMD). ‘655 is a 19bp blunt-end AtuRNAi trigger targeting the RTP801/REDD1 apoptotic stress response gene in the choroid. ‘655 was originally discovered by Silence Therapeutics and Quark Pharmaceuticals, licensed to Quark and eventually partnered by Pfizer which is largely in control of clinical development.

Data from the DME study were reported earlier this year (see related blog entry here). These showed that while ‘655 was well tolerated and efficacy was strongly suggestive of superiority versus laser photocoagulation, the old standard-of-care, Pfizer and Quark agreed to run a phase IIb study using higher dosages to take into account the emerging standard-of-care for DME, Lucentis, a monoclonal antibody against VEGF. Data from the phase II wet AMD study should be imminent.

Unlike the DME study, the ~150 patient wet AMD trial design for the wet AMD study, MONET, already took into account Lucentis as the new standard-of-care in that indication. As you can see from the treatment groups below, the goal is to either show superiority to Lucentis, or at least show a synergistic effect when used in combination with Lucentis (a positive outcome would be to show superiority of Arms 4 or 5 over Arm 1). Unlike many other wet AMD/DME-targeting agents in development, ‘655 should not act via the VEGF pathway and therefore has potential as an add-on to Lucentis.

Treatment arms in phase II wet AMD study:

Arm 1: 0.5 mg intravitreal injection of Lucentis given every 4 weeks from baseline to Week 12 (note: 0.5mg once a month is the recommended standard for Lucentis);

Arm 2: 0.5 mg of Lucentis given by intravitreal injection at baseline followed by 3 mg of PF-04523655 given every 2 weeks from Week 4 to Week 12;

Arm 3: 0.5 mg of Lucentis given by intravitreal injection at baseline followed by 1 mg of PF-04523655 given (weekly) from Week 4 to Week 12;

Arm 4: 0.5 mg of Lucentis given at baseline by intravitreal injection followed by 3 mg of PF-04523655 given every 4 weeks from Week 4 to Week 12;

Arm 5: 0.5 mg of Lucentis given by intravitreal injection at baseline followed by 1 mg of PF-04523655 (30 minutes later) given in combination every 4 weeks from baseline to Week 12.

Dosing had been completed and preliminary data from the study were known already in November 2010. Unfortunately, while ‘655 as single agent or in combination with Lucentis did show improvements in mean visual acuity over the 3 month dosing period, 6 and 9 letters respectively, it failed to show superiority to Lucentis at any of the doses at the important 4 month primary endpoint. No remarkable safety events were seen in MONET (all this can be gleaned from reading Quark Pharmaceutical’s latest prospectus). By comparison, large studies with Lucentis (0.5mg, monthly) have shown 6.6-9.8 letter average improvements from baseline at two years.

Outlook for ‘655 in Wet AMD

Most likely due to missing the primary 4-month endpoint, Quark Pharmaceuticals already indicated that following full data review Pfizer is unlikely to directly enter phase III trials, but would either decide to run a phase IIb study or abandon the program altogether. It is disappointing that ‘655 has apparently not shown synergism when used together with Lucentis as one might have expected from the presumed mechanism of action of ‘655, but possibly not from an immunostimulatory antiangiogenic VEGF-related artefact. A synergistic effect, however, may be masked by the initial Lucentis activity and only emerge over time. What is also often forgotten when it comes to the competitive space for the novel therapeutics in ocular diseases is long-term safety, not just absolute efficacy and dosing frequency, so studies with longer dosing than just the 3 months in MONET may be worth the risk. Maybe such safety and efficacy signals will emerge from the upcoming full data presentation.

Finally, instead of combining '655 with an antibody like Lucentis, combining it with the approved anti-VEGF aptamer Macugen (an oligonucleotide) might have practical advantages. Macugen has been struggling in the marketplace following the introduction of Lucentis due to perceived potency disadvantages. Curiously though, it is Pfizer that holds the commercial rights to Macugen, and combining it with '655 to reinvigorate the competitiveness of Macugen must have crossed their mind.

Big Pharma Support for RNAi Therapeutics Growing

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

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

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

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

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

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

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

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

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

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

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

Quark RNAi Therapeutics Drug Candidate for Diabetic Macular Edema Effective, but Changing Competitive Landscape Weighs

A lot has changed in the treatment of diabetic macular edema (DME) since Quark sub-licensed its AtuRNAi compound to Pfizer in 2006. Most notably, the monoclonal antibodies against VEGF, Lucentis and the cheaper derivative Avastin, are replacing laser photocoagulation as the standard of care in this condition that adversely impacts the vision of up to 10% of those living with diabetes.

Quark last week reported 12-month data from the phase II study of PF-04523655 run by Pfizer (DEGAS) enrolling 184 patients with DME. The data suggest that the drug was on track of meeting its primary end-point which would have been superior improvements in mean visual acuity at 24 months compared to laser treatment: a 5.8 letter improvement for ‘655 at the highest dose (3mg) compared to 2.4 for laser (p= 0.08). Pfizer, the company that ran the trial, however, decided to terminate the study at this midway point as it deemed that the study objectives could no longer be met.

This is likely at least partly due to the new competition from the Roche/Novartis drug Lucentis that showed 24-month improvements of 12.5 letters versus 2.6 letters for sham control in a pivotal phase III study (RISE). Nevertheless, the efficacy of ‘655 looks much better if one considers that taking into account the 12 month completers only, the improvement was a very promising 9.1 letters for ‘655 versus 3.2 letters for laser. Moreover, the ‘655 data were reported to be dose responsive whereas the Lucentis data were not. Importantly, no serious adverse events were reported, although additional details remain to be reported at an upcoming conference.

Based on this dataset, it seems to me that ‘655 was efficacious, but unlikely to match the Lucentis data with the doses studied even when allowing for more patients to complete the study. Given the encouraging data, Quark decided to run a phase IIb study on its own dime, hoping that with higher doses the efficacy of Lucentis can be matched or even surpassed. This would confirm that the safety profile in DEGAS was satisfactory. In return, Quark would receive increased milestones and royalties should the drug eventually be approved.

Overall, the data are good news for RNAi Therapeutics in ocular indications in general. 3mg siRNA translate into almost a whopping 100mg per kilogram of human eye that were apparently well tolerated in this study (note, however, that the cost of goods for monoclonal antibodies would still be higher even at the current 0.3-0.5mg/injection). This paves the way for improved RNAi Therapeutics candidates with larger therapeutic indexes due to enhanced uptake and at the minimum the same frequency of administration as Lucentis (monthly). Some RNAi approaches, such as attempted by RXi Pharmaceuticals and Eyegate, may even dispense of the need for needle injections altogether. This would be a major differentiating factor.

Moreover, even with comparable single-drug efficacy, safety, and route of administration, ‘655 may be a viable alternative or complement to Lucentis as its mechanism of action is anticipated to be anti-apoptotic (stabilizing the blood-retina-barrier) instead of anti-angiogenic (preventing abnormal blood vessel formation). However, as indicated in my somewhat less optimistic blog entry last week, this is yet to be convincingly proven given the possibility that ‘655 may have at least partly worked through a non-RNAi mechanism. Demonstrating synergistic action in some animal models would go a long way in showing this.

For investors of Silence Therapeutics, I consider this better-than-expected data as they keep the drug alive and demonstrate the safety of the AtuRNAi design. How the new terms between Quark and Pfizer will affect Silence’s financial stake in the program and whether the present result will trigger any immediate payments, remains to be seen.

Update from March 18 Quark registration statement: In the parallel study of '655 in wet AMD, an interim analysis has shown improvements in mean visual acuity over 3 month period, but at 4 months, the primary endpoint, no numerical benefit over Lucentis was seen in any of the doses. The trial will be continued with full data expected in the second half of 2011.

Are Quark Pharmaceuticals’ Ocular Programs About to Meet Expected Fate?

Recent entries to the ocular clinical trials by Pfizer listed in ClinicalTrials.gov (see here and here) suggest that its first-generation RNAi Therapeutics candidate for wet age-related macular degeneration and diabetic macular edema, PF-04523655, is about to meet the same fate as did those for similar indications by Opko and Sirna Therapeutics (Merck)/Allergan before. The phase II study in diabetic macular edema (DEGAS) has already been terminated in December 2010 as ‘the objectives of the study could no longer be achieved’; a study run in parallel with the same candidate for wet AMD (MONET) meanwhile is still ongoing, but without recruiting new patients and after having been intermittently terminated in January as a result of the DEGAS trial.

Although making no mention of the clinical trials interruptions, Quark revealed in its Preliminary Prospectus filed this February that results from the DEGAS study are about to be unveiled this month. Quark is the company from which Pfizer had sub-licensed the AtuRNAi trigger candidate developed originally by Silence Therapeutics and is now making renewed attempts to go public. The Company would likely need such capital quite urgently in case those programs were indeed terminated as most of the recent funding had come from the Pfizer partnership in the form of $52.5M in milestones and cost reimbursements according to the registration statement; about $6M of which went to Silence Therapeutics.

The recent revelations also make it apparent just how much Pfizer had already invested in RNAi Therapeutics. Given that Pfizer announced plans to close its in-house RNAi Therapeutics effort in February, it is no stretch to imagine that the ocular program troubles were the final trigger for Pfizer's decision.

Approach not on sound scientific footing

Just like the previous discontinuations of the ocular RNAi programs by Opko and Allergan/Merck (Sirna Therapeutics), Pfizer’s approach involved the intravitreal needle injection of naked siRNA oligonucleotides and yielded phase I/II results suggestive of efficacy. I was personally never able to make sense of those candidates as they lacked a sound scientific basis for how they would enter target cells in the back of the eye. A study in 2008 by Ambati from the University of Kentucky likely shed light on these results by showing that TLR3 responses triggered by some siRNA structures may ultimately cause the inhibition of blood vessel growth that is a critical factor in those diseases. With the Quark/Pfizer drug likely to meet its unavoidable fate, the door is open for second-generation ocular RNAi Therapeutics approaches that get around TLR3 and into the cytosol of cells. Such efforts include those by RXi Pharmaceuticals and Korean company BioMolecular Therapeutics.

Shares of Silence Therapeutics trade at historic lows following revelations

At this point, it is important to emphasize that the ‘study was not terminated for safety’ according to the clinicaltrials.gov site and have little to no direct bearing on the other clinical and pre-clinical AtuRNAi programs.

Nevertheless, the stock of Silence Therapeutics traded down quite sharply as the revelations made the rounds among Silence investors, giving that company a ridiculous market cap of down to 10M UK pounds. What likely triggered the meltdown is investor worry that Silence had unduly relied on milestone payments from Quark’s programs in their financial planning. I therefore contacted the company on this topic and was informed that the Company does in fact not rely on such milestones in its cash guidance as these are out of their control. The Company added that data from the DEGAS study are yet to be unveiled and that it is not aware of any discontinuation of these programs.

Fair enough, and maybe, amid the confusion and insanely low valuations of some RNAi Therapeutics companies, a buyer will see an opportunity in acquiring a promising cancer candidate and some equally promising delivery technologies to endothelial cells and the lung for…maybe $30M?

Big Pharma and RNAi Therapeutics: In-house Platform Development is ‘Out’, External Product-specific Deals are ‘In’

As if to add insult to injury, a few month after Roche exiting RNAi Therapeutics, plans emerged that Pfizer is about to shut down internal oligonucleotide therapeutics development efforts. This is depressing news for sure to me, and I would assume the wider RNAi Therapeutics community. But then again maybe not that surprising, and it would shock me no more to see Last-Man-Standing Merck shut down as well if the Tuschl trial goes against them.

Just as Big Pharma jumped onto the RNAi Therapeutics bandwagon 3-5 years ago, seemingly believing that all you need to do is to inject an siRNA into the blood and all those multi-billion dollar patent expiration woes will go away, the Big Pharma herd is now running for the exits. If you study this quarter’s financial results by Pfizer and Merck, you’ll know that there is little or no room for developing a new technology platform. Rather, it is about rescuing the top-line through Mega-Mergers with the few stilll growing large pharmaceutical companies, phase III, launch, and emerging markets, and managing the bottom-line by cutting in-house R&D. We’ve all heard it, again and again.

In essence, it is an acknowledgment that Big Pharma has failed as an innovation engine and R&D is no more a place to hide from responsibility in Big Pharma. The industry has decided that internal efforts that just serve as evaluation units of external technologies (e.g. delivery) without spearheading cutting-edge R&D themselves are not an efficient use of capital. Instead, if a therapeutic business unit was interested in a specific RNAi Therapeutics candidate, they can deal with the external company directly without the need for an in-house middleman. In fact, Pfizer has already pursued this alternative pathway as they have partnered the ddRNAi program for HCV with Tacere and a synthetic siRNA candidate from Quark for wet AMD. In both cases, there seemed to have been little involvement by Pfizer’s in-house oligonucleotide therapeutics unit.

This is not a criticism of the individuals themselves that have been part of those platform development units, but more one of an organizational nature. The more I learn about Big Pharma, the more I am struck by how little co-ordination there is within these sprawling organizations. For example, a group in one part of the world may utilize RNAi for target discovery and validation, but may not be fully aware of the technologies available from units elsewhere which work on the therapeutic aspects of RNAi.

It is, however, also a criticism of the arrogance of some organizations that innovation will happen if only you throw money at it. More than $500M by Roche, more than $200M by Pfizer, and more than $1.5B by Merck, and little to show in terms of delivery progress compared to a company like Tekmira with much more limited means. What is frustrating is that often money is spent on trying to replicate what already exists, such as LNP delivery, instead of admitting that innovation can’t be manufactured and if you really want to bring it in-house, then it is by buying it where it emerges, wherever in the world.

Almost on cue, the same day that Pfizer’s plans emerged, Marina Biotech announced a product-specific development deal with Swiss drug licensing and development company Debiopharm. This deal covers a pre-clinical stage RNAi Therapeutics program for bladder cancer (via topical LNP-siRNA administration) where much of the early development work will stay with Marina, but which will all be funded by Debiopharm, with potential downstream development milestones and royalties for Marina Biotech. Given the circumstances, severe cash crunch I would think, it is a good deal for Marina given the early stage of the program (pre-clinical). And who knows, maybe some of the work by Marina Biotech and Tekmira with Pfizer will similarly result in product-specific development deals with Pfizer therapeutic area units if results obtained thus far have been promising.

The Pfizer news is definitely not good for building investor confidence in RNAi Therapeutics, but long term it may just mean that companies with already viable clinical technologies will succeed as it will allow them to efficiently churn out and monetize high-quality development candidates, somewhat akin to what Quark’s and ISIS’ business models have been until now. That’s not to say that this is ideal for RNAi therapeutic technology development, but with maybe the exception of Alnylam, most companies won’t have many other choices.

Note: I am currently planning to resume more regular blogging as clinical results come in. Only these will be able to turn around sentiment for RNAi Therapeutics in a lasting manner.

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

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

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

The 2006-2008 gold rush

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

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

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

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

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

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

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

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

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

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

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

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

2 Short Stories: An siRNA Delivery Paper by Merck, Pharmaceutical Interest in Silence’s Gene Target

The most enjoyable part in following RNAi Therapeutics is to look at the rich stream of scientific data and determine the absolute maturity and competitive position of the technologies and companies involved, as well as getting a glimpse at relationship dynamics. I therefore thought to share today two examples of this that I picked up recently. One is a paper by Sirna Therapeutics/Merck shedding some light on their approach towards RNAi pharmacology and RNAi trigger design. The other is some intriguing evidence that Silence Therapeutics’ most important gene target, PKN3, is gaining traction in the pharmaceutical space.

Studying the pharmacology of siRNA delivery

Pei and colleagues from Merck published in RNA a nice paper on better understanding the pharmacology of siRNA delivery [Pei et al. (2010). Quantitative evaluation of siRNA delivery in vivo]. Unlike small molecules or even antibodies, the pharmacology of RNAi Therapeutics is more complex as simply measuring the raw tissue abundance of an RNAi trigger is a poor indicator of successful RNAi delivery. This is because functionally inactive siRNAs may vastly outnumber the active siRNAs loaded into the mammalian Argonaute 2 protein (Ago2), the nuclease responsible for seeking out and destroying complementary target messenger RNAs.

Not surprisingly, the Merck researchers employed the LNP/SNALP delivery technology in rodents and monkeys as their system of choice. After intravenous delivery of these LNPs, siRNA abundance was determined by quantitative PCR both at the tissue (mainly liver) and Ago2 level.

For the LNP aficionados among you, the 1mg/kg ED50 lipid nanoparticle used in this study still involved the CLinDMA lipid that was shown previously by Merck to be associated with immunostimulation (Abrams et al. 2010), something that Tekmira has interpreted as being the result of the strong positive charge of such LNPs.

Although playing too many number games carries the risk of missing biology sometimes, a number of quite interesting findings were made. One is that the vast amount of siRNA in the liver (>99%) is lost in the first 24 hours upon which a slower tissue elimination phase sets in that is apparently dominated by the turnover of guide strand incorporated in Argonaute.

It is generally thought that the longevity of gene silencing often seen in vivo, often on the order of 1-2 months following a single administration, is due to the stability of this complex. Despite that, there was still an approximately 3-5 fold decrease in the abundance of such complexes over a week. Not too fast, but fast enough to make it worthwhile studying in more detail whether the stability of these complexes is limited by Argonaute protein half-life or by a selective removal of the guide strand. If the latter, siRNA structure-chemistry may be able to increase silencing duration still. Such studies should also shed light on what pharmacological advantages siRNA depots might have which could be of particular interest to ocular and oncology applications.

Merck employed Zamore rule in siRNA design

The paper also allowed for some interesting insights into the siRNA trigger design process employed by Sirna/Merck. Supporting the importance of the Zamore end-stability patent recently issued in the US and exclusively licensed to Silence Therapeutics (Intradigm) from UMass [note: this corrects an earlier version that improperly stated the IP had been assigned to Silence], the authors first determined the relative Ago2 incorporation efficiencies of guide and passenger strands and then studied how this was changed following chemical modification of the same sequence. As a reminder, achieving a high ratio of guide to passenger strand in RiSC is widely considered to be beneficial both for reducing passenger strand-mediated off-targeting as well as enhancing siRNA efficacy.

Indeed, the authors find that chemical modification changed (in this case enhanced) guide strand incorporation over passenger strand incorporation. However, the authors argued that this was not due to the application of the Zamore rules, but due to having added inverted caps to the ends of the passenger strand. I agree that since the 5’-modification of the guide strand plays a major role in Argonaute loading, these caps, as also employed e.g. by mdRNA, should have a considerable effect on loading the passenger strand. However, since the modified siRNA with which the comparison to the unmodified siRNA was undertaken contained additional modifications besides the caps, it is not possible to argue that it was only the caps that had the effect on differential loading. In fact, the differential strand loading efficacies of 2 modified siRNAs, distinguished only by the nature and position of backbone modifications, differed by a factor of 2, clearly indicating that siRNA modifications besides the cap have a major influence on differential strand loading.

Wyeth/Pfizer shows interest in PKN3 in cancer

I had always considered it the wrong strategy for Silence, even more so before their merger with Intradigm, to focus so much of the company’s resources on a single drug target: PKN3. One reason is that Silence claims to be an RNAi platform company, and resources would have been better spent on building on their early pioneering position in siRNA design which then seemed to be at the risk of getting stuck in an early 2000’s 'dead-end'.

Even more worrisome is that Silence was essentially the only group really working on the PKN3 gene, and at that early stage it is always a very real possibility that it might turn out to be a useless artifact of no commercial value. However, the scientists stuck to their guns and it now seems that additional data confirms PKN3 to be an interesting oncology target in the angiogenesis field with the rest of the pharmaceutical world slowly paying attention.

Curiously, it is research by Wyeth, now part of Pfizer (!), that confirms that PKN3 plays a role in endothelial biology and that it is upregulated in a number of cancers. Even more intriguing is the fact that one of the co-discoverers of PKN3 as a cancer drug target (Anke K.-G.) is also named as an inventor in a PKN3-related patent application by Pfizer published this year (WO 2010/105128 A2). This patent application is about methods of using PKN3-containing protein complexes for cancer diagnostic purposes, e.g. determining patients with high PKN3 levels which would be candidates for a PKN3-targeting drug just like Silence’s Atu-027 (this candidate has been reviewed here with Tobias Wolfram). A nice validation of Silence’s own results and demonstrating just how close Pfizer’s PKN3 science seems to be to that of Silence is that a number of experiments described in the patent application were based on the same rodent cancer models previously employed by Silence showing that PKN3 silencing leads to an inhibition of tumor growth in mice.

With the PKN3 gene patented by Silence as a cancer drug target, it would make sense for Pfizer to gain access to Silence’s IP and maybe even take on the clinical development of Atu-027 itself for which Pfizer could use their methods as a response biomarker. Maybe Silence’s belief in PKN3 will be financially rewarded after all, and it might also explain why Alnylam seems to be so keen in weakening Silence’s PKN3 patent estate. Until now, I had come to believe that the only purpose of fighting that patent estate was to frustrate Silence by engaging them in yet another patent skirmish. It is interesting to speculate that the strength of PKN3 science and IP could critically inform whether Pfizer will partner with Silence or Alnylam.

Upcoming $100M Novartis Decision to Shake Up RNAi Therapeutics

As critical court rulings that could decide who will control the fundamental Tuschl patents are getting delayed at least into September, probably later than that (see the ‘RNAi litigation’ blog for the latest updates), the $100M question of whether Novartis will exercise their right to broadly adopt Alnylam’s fundamental RNAi trigger IP estate is likely to replace the RNAi litigation as the driving force in the RNAi Therapeutics deal dynamics in the near future.

Under the 2005 research collaboration and license agreement, Novartis paid Alnylam $10M in upfront cash in addition to a $58.5M equity investment in Alnylam's stock for the right to (exclusively) pick 30 therapeutic gene targets protected under Alnylam’s fundamental RNAi trigger IP as part of the research collaboration, and for the right of first offer to additional targets that Alnylam develops and wishes to partner. As I understand it, Novartis has until the end of the term of the research collaboration, probably October 12 2010, to pick their targets, and retains the right of first offer until 3 years thereafter (hold your breath if you expect new product-specific partnering before that).

In addition, Novartis also obtained the option to broadly adopt Alnylam’s fundamental RNAi trigger estate exercisable for an additional $100M. This non-exclusive license has been characterized by Alnylam to work similar to Alnylam’s platform relationships with Roche and Takeda. These licensing relationships provide the companies non-exclusive access to Alnylam’s fundamental RNAi trigger IP that will provide coverage until 2016-2025. One important difference, however, is that Novartis could use this IP in all therapeutic areas, not just a few select ones as in Takeda's and Roche's case. The other important difference, which I believe has the potential to fundamentally change the competitive landscape in RNAi Therapeutics, is that, unlike Roche and Takeda, the licenses do not provide Novartis access to crucial RNAi delivery technologies. Novartis has until the end of the research collaboration (October 2010) to decide on the option and think long and hard about their delivery strategy.

It would seem quite logical for Novartis to exercise the option. For one, Novartis is certainly ramping up their RNAi Therapeutics efforts based on the flurry of related job advertisements. Moreover, $100M would appear to be quite a bargain for such broad freedom to pick gene targets compared to what Takeda and Roche got. In fact, it would make Novartis the company with the most power in RNAi target picking. Lastly, Novartis has been consistently buying Alnylam shares in recent years to maintain their ownership at 13.4%. Such purchases have to be considered strategic.

But as I said, all this target selection power may not be worth that much without delivery. In fact, a long delay for Novartis in gaining access to say delivery to the liver and cancers (I’d love to have some insight into the targets that Novartis has picked thus far, but hepatitis C is a likely one and quite a few cancer-related targets, too), may quickly diminish the value of their initial 30 exclusive target picks as the patent clock is running down. So at some point Novartis has to think about entering the clinic and learn about the clinical aspects of RNAi Therapeutics development.

There are not that many delivery technologies that can provide clinically relevant delivery of synthetic siRNAs. As you will know, I consider SNALP technology as the most advanced at the moment. I would therefore expect Novartis to try and gain access to it. Last year, Novartis paid mdRNA roughly $7M basically to take a look at that company’s liposomal siRNA delivery technology. One way to interpret this was that Novartis wanted to evaluate (cheaper) alternatives to having to go through Alnylam and/or Tekmira in gaining access to liposomal siRNA delivery. One thing is for sure, Alnylam would likely make Novartis pay extra for a sub-license to SNALP-related Semple/Wheeler. Alternatively, Novartis may not like Alnylam’s terms and gain access to SNALP by buying Tekmira. What makes this even more attractive is that it would on top provide Novartis with another 7 target picks, which it could pick also after October 2010, and critical expertise on the use of SNALP. This is important because even if Alnylam gave Novartis access to the SNALP-related Semple/Wheeler IP, it, like Takeda and Roche before it, would still very likely require the co-operation of Tekmira to fully exploit SNALP technology. Such expertise would, of course, also benefit the overall RNAi delivery effort of Novartis.

With 37 targets protected by Alnylam’s RNAi trigger IP (note: the exact number would depend on how many targets Novartis will have chosen by October), one has got to wonder whether just buying Tekmira for $200M may be the better deal. 37 targets should be more than enough to keep them occupied into the early 2020’s. Or if Novartis was feeling real lucky and would like to become the dominant force in RNAi Therapeutics, it would spend $300M for the adoption license and Tekmira and look quite smart in comparison to Merck, Roche, and Takeda.

The above scenarios should, of course, give other Big Pharma companies cause for concern. Assuming for example that Pfizer agrees SNALP to be the most promising systemic RNAi delivery technology, it may not like the prospect of another important RNAi delivery technology disappearing from the market, just as it happened to them in 2008 when Roche bought Mirus Bio with which Pfizer had a siRNA delivery collaboration then.

Of course, if events unfolded like this, all other pure-play RNAi Therapeutics companies should also benefit. Alnylam Pharmaceuticals, mainly because it would confirm the interest by Big Pharma in RNAi Therapeutics, and pure-play companies like Silence Therapeutics, mdRNA, and RXi, because they would be viewed as moving up the acquisition queue.

PS: The above scenarios are based on a few assumptions, the most important of which probably being that an acquisition of Tekmira would also transfer the right to exploit SNALP technology for Tekmira’s 7 target picks (which are transferable) in the case of a Big Pharma which otherwise has not gained access to Alnylam IP, and in the case of Novartis, possibly for all its other target picks, too.

The Pfizer-Tekmira Deal: More than Meets the Eye?

In yet another sign that interest in RNAi Therapeutics Big Pharma is picking up again, Tekmira today announced the initiation of a research collaboration with Pfizer focused on its SNALP siRNA delivery technology. This trend follows a number of proof-of-concept studies over the last year not only in non-human primates, but increasingly also in Man, which in aggregate are allaying much of the concerns caused by the findings that non-specific, innate immune responses had been responsible for a number of early RNAi in vivo study results (see study and review by Tekmira scientists).

In Tekmira, Pfizer is certainly choosing a leader in the development of RNAi into a clinical reality, and despite the early stage of this relationship, this could harbor the seeds of much more to come. This is not only because the two research teams should be a good cultural fit, but also because Tekmira could become a central piece in Pfizer’s strategy of RNAi Therapeutics as a platform. Sure, Pfizer has been active with a number of deals in the space, including an eye disease collaboration with Quark and a DNA-directed RNAi approach for HCV with Tacere, but following its acquisition of Coley as the launching pad for RNAi Therapeutics, it has yet to decide on where it will get the fundamental IP from in terms of RNAi triggers and also has not committed yet to any particular delivery technology. Given this delay, I have therefore come to believe that Pfizer may pursue a strategy that includes a concerted move in both trigger and delivery.

It is no secret that there is a certain tension in what Tekmira feels it deserves from Alnylam, and what Alnylam is willing to pay. Clearly, SNALP delivery must have accounted for a significant part of the financials Alnylam achieved in the Roche and Takeda platform alliances. One important corporate development goal of Tekmira is therefore to create enough know-how and IP that Alnylam does not control so that Alnylam cannot take it any more for granted, and with more options create best shareholder value. Pfizer could be Tekmira’s white knight because it is also fair to assume, as evidenced by the persistent patent oppositions by Pfizer against Alnylam especially in Europe, that Pfizer would prefer not to pay Alnylam $300M upfront for a platform license. What better way to gain leverage over Alnylam than by building a relationship with Tekmira on whose technology Alnylam has build so much of its pipeline and business development?

The main reason why Tekmira does not sport an RXi-like $100M market cap, despite vastly superior enabling technology and financials, is because it does not claim to have proprietary RNAi triggers. One could therefore argue that if somebody like Pfizer decided that it did not need Alnylam’s RNAi trigger IP, combining Tekmira’s SNALP technology with an RNAi trigger workaround solution (e.g. blunt-ended siRNA’s depending on the Tuschl outcome) would create synergies that would easily justify a Mirus-type price tag for Tekmira. Given the recent impressive share price performance of RXII, I would not want to exclude that RXi Pharmaceuticals could feature in this equation.

One way of interpreting today’s news is therefore as yet another important validation of SNALP technology by a Big Pharma, all the more important since with Pfizer SNALP’s potential technology risks have passed the most critical smell test, innate immune activation and liver toxicity (Coley and Tekmira’s precursor Inex used to compete on TLR therapeutics), but with modest immediate financial implications. Behind hit, however, could be the beginning of the end of Tekmira as we know it. With the platform adoption option date coming up, Novartis may also want to have a say in this.

Pfizer and GSK to Invest more in RNAi Therapeutics

GSK launches rare diseases unit: Today, GSK announced that it will move more aggressively into addressing rare diseases and set up a unit for this. The rationale is that developing medicines for diseases that have largely been neglected by the pharmaceutical industry in the past will have a good pharmaco-economic profile and ultimately be more profitable. More and more, selling pills to the masses does not appear to be the answer to Big Pharma’s patent woe and productivity cliffs. This should be very good news for RNAi Therapeutics, which offers a direct and cost-efficient way to such (often genetic) diseases, and maybe we will see this deal between GSK and Alnylam later this year.

Pfizer exercises option for Tacere’s HCV candidate: DNA-directed RNAi company Tacere, a Benitec spin-off, announced today that Pfizer has exercised its development-commercialisation option for Tacere’s HCV drug candidates. Pfizer obtained the option in the deal 2 years ago with Tacere (see blog entry here). This follows pre-clinical studies in rodents and monkeys that, according to the press release, have shown the AAV vector to penetrate the liver well and to be generally well tolerated. Pfizer will now collaborate with Tacere and fund the IND-enabling studies. This triggers undisclosed milestone payments, some of which will be due to technology licensor Benitec which, in addition, has an equity stake in Tacere. There is hope for ddRNAi Therapeutics!

Pfizer and Quark Progress RNAi Therapeutic for Diabetic Macular Edema into Phase II

Quark Pharmaceuticals today announced that development partner Pfizer has initiated dosing of the first patient in a phase II trial of the RNAi Therapeutic candidate PF-4523655/RTP801i-14) for diabetic macular edema (DME). The start of the phase II trials is a vote of confidence in RNAi Therapeutics for eye diseases by a major pharmaceutical company with a considerable eye care franchise and growing ambitions in RNAi Therapeutics.

The 160-person safety and efficacy trial follows phase I/II studies conducted by Quark that showed the drug to be safe and well tolerated in patients with wet age-related macular degeneration (wet AMD). Similar to DME which affects about 10% of type I and II diabetics, wet AMD is caused by the growth of leaky blood vessels in the back of the eye leading to blurred vision, and in some cases blindness. For this reason, it is not uncommon that a given compound is being tested for both indications.

The reason that Pfizer has chosen DME instead of wet AMD as the indication for this trial may be related to the fact that the wet AMD RNAi Therapeutics space has become crowded with Opko Health and Sirna Therapeutics/Merck having wet AMD RNAi Therapeutics in phase III and II studies, respectively. Opko Health also has a phase II study for DME using the same compound. It may also be related to the recent controversy caused by a Nature paper that showed that dsRNA-triggered immune responses alone may be anti-angiogenic in a mouse model for wet AMD and that this may have led to mis-interpretations of data from related pre-clinical RNAi Therapeutics studies.

However, PF-4523655 is unlike Sirna’s and Opko’s compounds in that it is intended to prevent abnormal blood vessel growth and leakage in a VEGF-independent manner. It is also a 19bp blunt-ended compound and therefore unlikely to trigger non-specific TLR3 responses (21bp seems to be the cut-off where you have to take TLR3 signaling into account). I trust that the former Coley Pharmaceutical’s folks with their deep understanding of TLR biology and that are now running the RNAi Therapeutics show at Pfizer will have closely looked at the issue.

Quark received an undisclosed amount for the initiation of the trials, Silence Therapeutics which had originally licensed the AtuRNAi technology to Quark collected $1.9M, and Alnylam from which a technology license was subsequently obtained on Pfizer’s insistence another undisclosed amount. Clearly, with today's allowance of Silence Therapeutics’ 10/633630 patent in the US which specifically claims AtuRNAi molecules of 18 or 19 base-pairs the IP battles are about to begin, and will be addressed in a follow-up blog entry. In any case, it is an interesting coincidence that the initiation of the phase II studies and the patent allowance occurred on the same day.

Independent of all these patent issues, I look forward to the results of this compound which has the makings of a safe and differentiated RNAi Therapeutic for DME.

Roche Nabs Mirus Bio’s RNAi Therapeutics Delivery Technology

Roche again...before this week will have come to an end, Roche has drastically changed the RNAi Therapeutics playing field leaving many heads in the RNAi space spinning.

You may think it is because I live in an RNAi Therapeutics bubble, but the Roche-Genentech press release and conference call to me clearly shows that a major motivation for the proposed taking private of Genentech was to broaden their RNAi Therapeutics efforts by bringing in a company with deep immunology and personalized cancer know-how, as well as being able to leverage Genentech’s monoclonal antibody capabilities for targeted RNAi Therapeutics delivery.

To this they now add for $125M, a sum that makes related companies look very cheap in comparison, the privately held Madison, Wisconsin, nucleic acid delivery company Mirus Bio. The jewel of Mirus Bio is their Dynamic PolyConjugates (DPCs), small, flexible designer particles for the targeted systemic delivery of siRNAs. Although the technology is relatively young and data scarce, from the PNAS publication last year (reviewed here in the RNAi Therapeutics blog) and conference presentations, DPCs are very competitive with liposomal technologies for delivery to the liver. Also very attractive from a safety and efficacy point-of-view is their apparent ability to selectively target silencing either to hepatocytes or Kupffer cells in the liver, depending on whether glucose or galactose-derivatives were attached. Although I haven’t seen data beyond the liver, the small size and modularity suggests that with the appropriate pharmacology it could well have applications for a number of other tissue types and organs and nicely complement larger nanoparticle delivery technologies.

It’s unlikely to be a coincidence that Roche is making all these moves in such short order. What has started with an IP license from Alnylam for basic access to RNAi mechanism of action, within 2 days they have now added to that one of the most coveted delivery technologies and scientific depth. The rapid moves by Roche means that fellow Big Pharmas like Pfizer, which had a non-exclusive license to DPCs, and Merck which had probably also been very interested in DPCs, now risk falling behind on delivery while their core RNAi IP has either not been secured yet (Pfizer) or is at best uncertain (Sirna Therapeutics/Merck). From a strategic perspective, it will be interesting whether due to their close relationships there will be any sharing/coordination of DPC technology with Alnylam and Tekmira, and for which indications Roche will employ the two leading delivery technologies (DPCs and SNALPs) both of which it has now immediate access to.

Today's acquisition is yet another piece of evidence that Roche is building their future on RNAi Therapeutics in a big and bold way. It's also encouraging that this comes a year after the Alnylam platform licensing agreement and suggests that they must have been pleased with what they have seen since.

….and the Winner Is: Pfizer and Coley Pharmaceuticals

While at the Keystone meeting, I was reminded that we may already have a winner for the RNAi Therapeutics Deal contest highlighted on this blog. As this contest as to who will be involved in the next large transaction of the RNAi Therapeutics space was still ongoing, Pfizer quietly bought Coley Pharmaceuticals. Although I noted this in one of my entries
and wildly speculated that this $164M acquisition may serve as a stepping stone towards grander RNAi Therapeutics ambitions, it was the 2008 Pfizer Analyst Day that made it clear that the major focus of Coley together with the RTC in Boston would be the development of RNAi Therapeutics.

Given the importance of considering TLR receptors for the design of RNA therapeutics, only highlighted by the recent Nature paper
on the class-related antiangiogenic potential of dsRNAs for the treatment of age-related macular degeneration, it now appears to have been a particularly shrewd acquisition bringing in TLR know-how as well as an established nucleic acids operation. For those hoping another Pfizer-related deal may be imminent, I would rather be skeptical as Pfizer probably has now their hands full organizing and evaluating the potential of this new platform.