RNAi Therapeutics A Bright Spot In Dark Biotech Winter

Over the last couple of weeks, we have seen business development activities in the RNAi space that made me realize that the modality has firmly established itself as the third drug development pillar next to antibodies and small molecules.  At the same time, surviving RNAi variations DNA-directed RNAi and microRNAs are catching a bid.

Biogen and Abbvie invest

Most Big Pharma companies have a history of making significant investments in the sector.  The early (2004-2009) significant moves by Roche, Novartis, Takeda, and Merck were not well rewarded.  This was partly because they lacked patience and the willingness to protect early platform development from the incongruent demands from their in-house therapeutic area groups.  Novo Nordisk got the timing right when acquiring Dicerna in late 2021.  Similar to Eli Lilly (through license to Dicerna IP and subsequent in-house work), they are now well placed to capitalize on the promise of RNAi for large cardiovascular and metabolic disease applications.

Amgen and Takeda stand to benefit from two opportunistic deals with Arrowhead Pharmaceuticals for candidates that are now in advanced phase 3 clinical development.  The RNAi agents for alpha1-antitrypsin-related liver disease (Takeda) and Lp(a) (Amgen) for cardiovascular disease will read out as early as next year.  Both companies speak highly of these products.  Amgen in particular highlights the Lp(a) program as its most exciting development candidate in corporate presentations and I expect the company to be back for more RNAi.

Two pharma/big biotech companies that stood out for having watched the developments from the sidelines are Biogen and Abbvie. 

Biogen has gone out of their way and tried it seems every oligonucleotide modality but RNAi.  This includes RNaseH antisense and splice modulation with Ionis and Stoke Therapeutics and microRNAs with Regulus.  It had done so after laughing off RNAi as a scientist’s sandbox idea when presented with it early on by Phil Sharp, scientific co-founder of both Biogen and Alnylam, and thus turned down the opportunity of a life-time to take a major stake in it.  

Instead, a certain former Biogen employee, John Maraganore would go on to build Alnylam into a major biotech player with Alnylam's market cap now exceeding Biogen's.  In a personal anecdote to illustrate the lack of appreciation of RNAi at Biogen at the time (2002), when I did an internship at Biogen and attended a job interview presentation there by a scientist on his RNAi work at Cold Spring Harbor, I was pretty much the only attendee not directly involved in the hiring process.   

It took a leadership generation and a realization that Biogen has become a dinosaur in the drug development industry that it recently finallyinvested $46M in a deal for a CNS target with you would not believe it: City Therapeutics, co-founded by John Maraganore. 

2 weeks before it, Abbvie did a broader collaboration and license option agreement with ADARx for $335M upfront.  Abbvie’s predecessor Abbott had dabbled a little bit in RNAi delivery around the early RNAi bubble, but with no serious intention behind it, really.

MicroRNA dinosaur Regulus taken out by Novartis

As with CRISPR now, the early RNAi bubble phase saw numerous start-ups not only around the core RNAi platforms, but also derivative technologies.  One of them was microRNA therapeutics, a technology targeting or mimicking the endogenous small RNAs of the RNAi apparatus. When the RNAi industry went through the 2010-12 financial bottleneck most of these companies either died or were well on their way. 

Regulus Therapeutics co-founded in 2007 by Alnylam and Ionis around microRNA-targeting oligonucleotides, had the good fortune of having deep-pocketed, influential backers that eventually enabled them to doggedly progress anti-miR17 antisense oligonucleotide farabursen for autosomal dominant polycystic kidney disease (ADPKD) to a stage where the FDA aligned with them on a speedy pivotal trial development plan earlier this year.

This triggered a bidding war between Novartis and an undisclosed bidder that on April 30 resulted in a ~10x premium over its 52-week low that will be paid by Novartis, including a $800M upfront and contingent value rights.

 

DNA-directed RNAi Therapeutics create tremendous value for uniQure

In the vibrant field of developing disease-modifying medicines for Huntington’s disease, uniQure stands out with its chance to gain FDA approval in less than a year should 3-year data replicate that seen after 2 years.  This is the big regulatory news of the day for genetically-targeted therapeutic development as uniQure aligned on a path towards accelerated approval, including a comparison with an external natural history cohort.  Turns out, new CBER chief Vinay Prasad is actually human and has compassion for those suffering from severe genetic diseases.

What few people are talking about is that AMT-130 is an RNAi Therapeutic.  It is a DNA-directed RNAi version where the RNAi trigger is expressed from a DNA template following AAV delivery.  The key to uniQure’s success is that delivery is done locally by intracranial access to where the gene suppression is thought to be required (Spronck et al 2021; cool video illustration here).  In the case of Huntington’s disease, it is the striatum; in the case of AMT-260 for mesial temporal lobe epilepsy where uniQure presented intriguing seizure reductions in the past week, the hippocampus. 

By precisely following how the target structure is filled up with the AAV solution, potential toxicities in off-target tissues can be avoided.  Obviously a big advantage at a time when the AAV field is struggling with toxicities due to systemic administration of large vector doses.

What is more, DNA-directed RNAi allows for durable, potentially permanent gene silencing without the need for an exogenous protein.  This comes as genome editing, be it via CRISPR or Sangamo’s zinc fingers, are hammering away at solutions for gene knockdown that require exogenous protein expression.  Sometimes the old ways are more elegant after all.  Being out of fashion has the advantage of allowing you to build value with less friction. uniQure is about to capitalize on that in a big way.

 

Pure-play RNAi stocks budding during biotech winter

All this is happening as RNAi bellwether Alnylam ($40B market cap) is hitting new all-time highs and is about to catch up with and likely overtake Regeneron ($53B market cap) to become the 3^rd most valuable biotech behind Amgen and Vertex Pharmaceuticals.  Besides the ATTR amyloidosis opportunity, this prices in the potential of Alnylam's pipeline to address huge markets such as Alzheimer’s and obesity with well tolerated, infrequently administered RNAi.

Silence Therapeutics has also risen slowly, but surely over 200% in the last 2 months.  As Lp(a) RNAi is increasingly seen as a must-have in the cardiovascular disease space, its phase 3-ready candidate SLN360 alone could be well worth a multiple of its current $275M market cap.  Add to this its 25 year experience as a pure-play RNAi developer and inhibinE for obesity being an easy target with their technology, Silence Therapeutics is ripe for an acquisition.

Arrowhead Pharmaceuticals is also up over 80% in the same period as revenues in the form of ApoCIII knockdown for high triglyceride-related disease and co-commercialization and royalty/milestone revenues come into closer focus.  Amgen would be an obvious candidate to make a play for Arrowhead, also because Arrowhead can now manufacture large amounts of RNAi triggers within the US.

There are a lot of lessons to be learned from the history of RNAi Therapeutics.  One is that financial bottlenecks can richly reward those that persevere, also because it creates scarcity value and reduces competition.  In general, the current biotech winter which forces companies to focus on their most promising and competitive product candidates will translate into greater profitabilities down the line.  In a twist of irony, as the CRISPR field is going through its own bottleneck, CRISPR Therapeutics now spending money on a non-core RNAi asset, thus keeping spend unnecessarily high and losing focus, is not what the doctor would order based on RNAi history. 

I believe that as long as Trump’s trade war does not result on a run on the US dollar pushing interest rates up, anticipation of Fed Chief Powell’s replacement in May 2026 will allow these assets to come to fruition in a much less capital-constrained environment for biotechs.

Regulus Therapeutics Declares MicroRNA Therapeutics Bankrupt

Once considered a new star on the biotech firmament, the most prominent microRNA Therapeutics company is going from bad to worse fast.  

Last week, Regulus Therapeutics announced that both of its clinical programs in Alport’s Syndrome and autosomal dominant polycystic kidney disease (AKPKD) had been voluntarily halted for financial and preclinical reasons. Instead, the company will now try to renegotiate the Alport deal with Sanofi and use its remaining resources to focus on a preclinical program for HBV.

Management not in control

The program pauses follow a string of other setbacks over the last 3 or so years. Most prominently, it discontinued a highly promising candidate for the treatment of HCV due to safety questions and having been a few years too late to a highly competitive game.  A slow early advancement of that miR-122 program was partly to blame for this.

After that, it has been one delay after another for various programs.  Partner AstraZeneca e.g. returned a liver-targeted metabolic program and the Alport's program has been hit by multiple delays and trial reconfigurations.

If this was not sufficient proof that managing a biotech company has been well above the paygrades of the multiple executive teams that have come and gone over the years, running out of cash in this genetically-focused biotech bull environment is simply unacceptable.  Even if microRNAs may have lost its early luster as targets for particularly complex diseases, I had thought that having exclusive access to the huge IP portfolios of parent companies Ionis and Alnylam for microRNA Therapeutics purposes would provide a powerful backstop when it came to accessing fresh capital.

With a market cap of less than $40M and last week’s ‘we’ve-run-out-of-cash news’ I was obviously wrong…

Chasing a 'safe' target

Since microRNAs which typically have a range of biologically meaningful targets are thus promising for treating particularly diseases of complex causes and manifestations, I would have thought that with the genetics gold-rush that we are now witnessing in neurology, not least because of antisense drug SPINRAZA, there would be much interest in Regulus Therapeutics there.

I understand that HBV is becoming a hot area again, with the skyrocketing valuations of Arrowhead, Dicerna, and Arbutus suggesting that high rates of functional cures are just around the corner.  Going after HBV with a microRNA, however, would seem like a surprising choice though given that in terms of direct antiviral activity, a microRNA approach should pale in comparison to the RNAi competition.  You would therefore think that Regulus is considering a immune reactivation-related microRNA target for HBV, but it is not clear to me which model they would be basing this on.  

Hey, management, at least show us some data to hang our hats on when you sell a preclinical concept as your future.

Or does choosing HBV betray that they have lost all confidence in their ability to deal with the biological complexity of microRNAs, instead seeking safety in just measuring simple viral knockdowns?

After the quasi-demise of microRNA diagnostics leader Rosetta Genomics, there is now the real prospect that the therapeutics counterpart will equally go belly-up soon.  In order to avoid that, Regulus needs new, confident management first and foremost as the main task now is to make the case for microRNAs as therapeutic targets.  Where are all the boastful biotech executives when you need them?

Non-RNAi Oligonucleotide Therapeutics Stocks

In the final instalment of the stock market-focused mini-series, I will turn my attention to the non-RNAi Oligonucleotide Therapeutics sector.  With last year’s approval of EXONDYS51 (Sarepta) and SPINRAZA (Ionis/Biogen), two highly impactful exon-skipping drugs, Oligonucleotide Therapeutics has finally gained widespread acceptance as a mainstream drug modality and arguably de-risked biotech investment vehicle.

Ionis Pharmaceuticals

This is a stock where tremendous value is waiting to be unlocked.  All it takes is a change in corporate strategy.  At present, Ionis needs ~4 groundbreaking medicines for every one developed by more traditional biotech companies such as Alnylam for it to reap similar market cap appreciation.  This is because it has readily given away ownership over its drugs regardless of needs, be they financial or related to a lack of disease expertise.

A striking recent example of this is the creation of Akcea as a subsidiary tasked with the commercialization of cardiometabolic drugs discovered by Ionis.  In addition to instantly giving up 1/3 of its ownership through an IPO of Akcea at very low prices, Akcea also partnered much of its assets with Novartis, thus further diluting Ionis’ ownership.

So what should have easily been a value of $3-4B to Ionis on the eve of the approval of the first important cardiometabolic antisense drug (triglyceride lowering Volanesorsen for FCS), Ionis’ stake in Akcea now probably accounts for barely $1B of Ionis’ ~$6.5B market cap.

To add insult to injury, Ionis this summer purchased close to $100M worth of real estate related to their R&D and manufacturing operations. $100M of valuable drug development monies!  This apparently they consider a better prospective return on investment than keeping full ownership of the cardiometabolic franchise or spending a few millions to just buy the marketing muscle they keep whining about lacking.

Not all may be lost though.  There are signs that Ionis, and perhaps even the CEO (Stan Crooke) himself who had been propagating the marketing-is-evil myth to justify Ionis’ business strategy, has started to realize that they need to change their ways to keep up with the market capitalizations of peers, including organizations driven by strong platform technologies (etc Alnylam, Regeneron).  With Brett Monia assuming the role of COO and Crooke’s right hand Lynne Parshall stepping aside, we are in the midst of a change of guards in this company.  But don’t hold your breath given that Dr. Monia, as a founding member (in his mid-20s!) of Ionis, still ought to be considered a part of status quo until proven otherwise.

Inotersen as an inadvertent opportunity

Just as Ionis was looking to be locked into its royalty play model with Volanesorsen (à Akcea) and GSK-partnered Inotersen for TTR amyloidosis as the next approvals on the 2018 horizon, GSK handed back full rights to Inotersen to Ionis.  Suddenly, Ionis is in full control of a drug competing for a market currently supporting ~$10B in market capitalizations between Ionis and Alnylam.  With peak sales expectations (even without the wild-type TTR cardiomyopathy opportunity) topping $5B, this number should only grow as the commercialization phase begins.   

If Ionis is smart, they will retain most marketing rights to Inotersen as any misstep by Alnylam around its first-generation TTR drug Patisiran could provide Ionis with an unanticipated upside (as an investor, I always look for the upside compared to market expectations).  Also, learning the TTR marketing ropes now will prepare them for the battle of the respective next-gen drugs between Alnylam and Ionis as this is where the TTR game will be won in the mid-term.

Chances are that Ionis will find commercialization less daunting and even rewarding, including to the R&D staff getting closer to the patient experience.  They should also then realize that through the exposure to the patients and medical community, they will gain a better understanding of the demands on follow-on products.  Drug discovery and commercialization in the orphan era is certainly a virtuous circle and Ionis may be the last one to find out.   

Better late than never.

In the interim, look to clinical results, especially from partnered CNS franchise drugs (Huntington’s, ALS) as tradable catalysts.  With a position in IONS that is approaching the size of my largest holding (ARWR) following the recent mini-sell-off in biotech, I also speculate that as the commercialization of Inotersen approaches and the market understands the impact of the SPINRAZA loading dose issue on sales numbers, IONS should be a solid outperformer in the biotech market. 

Strong buy.

Wave Life Sciences

I consider the CNS where currently the most value is bottled up in antisense therapeutics whereas in the liver, RNAi in general holds the edge in terms of safety and convenience (long-term I believe the battle will be won based on off-targeting, one gene at a time).

Since Ionis has given up substantial rights to its CNS drugs through its broad partnership with Biogen and the next hot CNS candidate is partnered with Roche (for Huntington’s), consider Wave Life Sciences not primarily as a stereopure ASO investment, but an ASO CNS play with the company likely retaining significant commercialization rights.

Of most interest to investors should be its two early clinical-stage drug candidates specifically targeting the mutant alleles in Huntington’s disease.  Initially, I had been skeptical about the actual need for targeting mutant huntingtin specifically given that we are unlikely to see the 90%+ type knockdowns that *could* spark safety concerns if the degree of knockdown also applied to wild-type huntingtin. The observation by Ionis, however, that ASO knockdown in the various areas of the brain is uneven and that the deep brain structures thought to be most involved in Huntington’s pathology may be some of the least sensitive to ASO knockdown made me realize the potential value of the allele-specific approach.  This is because in order to drive substantial knockdowns in the deep nuclei, the corresponding drug doses might lower wild-type huntingtin to very low levels say in the cortical neurons.

Still, since the huntingtin knockdown concern remains theoretical and is largely based on animal models where huntingtin has been knocked out since around birth (please correct me if wrong), I still consider the allele-specific approach as a needlessly complicating measure.

With a healthy market cap of $1B, I feel that WVE is a very interesting ASO investment for the long-term, but that price-wise better buying opportunities could be ahead for this clinically nascent company.  Also, I am skeptical about Wave’s unforced fast-follower strategy and would like to see first-in-class candidates entering clinical development.

And yes, if stereopure chemistry can get around some of the safety issues of phosphorothioate oligos that will likely remain relevant (due to dose levels) for systemic applications outside the liver, additional competitive value is to be realized there.

Disclosure: no position as of November 29, 2017.

Sarepta Therapeutics

One of the fast-follower indications pursued by Wave is exon skipping for DMD- the domain of Sarepta Therapeutics.  Soon, Wave may not find themselves chasing a modestly potent EXONDYS51 and related PMO-chemistries for other exons, but what could emerge as a much more exciting exon skipping chemistry for the muscle: peptide-conjugated PMOs (PPMOs) which has recently cleared the preclinical safety hurdle to enter clinical development.

PPMOs easily outperform simple PMO chemistry in terms of potency, but arginine-rich precursors have suffered from unacceptable preclinical toxicity.  Sarepta now claims that it has found PPMOs with increased potency (see slide 16 of this presentation), but a much better safety margin.

If first clinical biomarker data support substantial exon skipping, then I believe Sarepta’s control over the DMD market will be cemented. Currently it somewhat hinges on confirmatory clinical evidence of therapeutic benefit for their mildly active PMO exon skippers entailing considerable clinical and competitive risk.  Add to this a number of other modalities in the quiver to treat DMD which Sarepta has acquired rights to more recently, Sarepta looks like a Vertex-/Alexion-type single orphan disease-focus play in the making.  Think $30-40B market cap (now: $3.6B).

Disclosures: long SRPT.

Regulus Therapeutics

After the miR-122 desaster in HCV and new management in place, it looks like a fresh start for Regulus Therapeutics.  The new mantra is quality over quantity as Regulus and partners alike have axed a number of microRNA Therapeutics programs.

As a result, it is clinical data from two development candidates that will most likely determine the shareholders’ fate in the years to come (note: I still think there could be tremendous opportunity in microRNA Therapeutics from addressing complex neurological diseases like Alzheimer's, but his seems of less interest to Regulus currently).  

One is RG-012 targeting miR-21 for the treatment of Alport Syndrome, an orphan disease impacting kidney health.  The advancement of this program into patients was recently slightly delayed by a few months after insights from a natural history study of the disease made the company re-focus on only X-linked cases of the disease for purposes of better stratification.

Instead of considering the change in study design as increasing the quality and therefore odds of success for the study, the market penalized this 3-6 month delay by selling off the stock from $1.4 to sub $1.  I call this a buying opportunity.

Regulus Therapeutics stands out from the oligonucleotide therapeutics crowd in that also its second candidate, RGLS4326 for autosomal dominant polycystic kidney disease (ADPKD) now in the clinic, is also targeting cells in the kidney.  I don’t think that this was by design, but the result of the liver programs falling by the wayside for various reasons.

While the kidney is certainly an interesting organ for oligonucleotides due to its high exposure to this class of molecules, it is a complex organ and not all that much is known about cell type-specific pharmacodynamics outside the proximal tubule epithelial cells.  Add to this the uncertainty about the relevant therapeutic cell types that need to be targeted for a disease like Alport’s, and you end up with considerable target risk around these programs so that in the end we largely have to rely on the mouse models here being relevant to human disease.  

I am long RGLS given (1) that Alport Syndrome makes for a nice orphan market opportunity with some important groundwork laid by Regulus itself,  and (2) the fact that sentiment around Regulus can only get better and if targeting miR-21 does not have a measurable on fibrosis in the kidney, maybe it’s time to give up on microRNAs for therapeutics altogether.

What to Watch for in RG-101 Post Regulus Therapeutics Executive Departures

As you will probably know already, Regulus Therapeutics surprised us this week with the sudden departures of both their CEO and CSO.  These two individuals also happened to be the insiders selling major positions in the stock earlier this year just days ahead of critical data to be released on their lead clinical candidate, RG-101 for the treatment of HCV ('Reading the tea leaves on Regulus insider sales').

While this would be a good reason for what looks like a sacking of the company’s two key executives (especially since the exodus came as a pair), for investors the all-important question is whether it is also related to bad news that we do not know about yet.  Most importantly, does this also have anything to do with the failure to report the viral resistance analysis which had been promised to us for the EASL meeting in April?

It is this analysis that will determine whether the miR-122 inhibitor can facilitate 4-week treatment regimens which must be the goal for this asset.  This is because RG-101 is the only serious long-acting agent out there in the HCV drug development arena and 4 weeks of oral, short-acting antivirals do not seem capable of getting rid of the virus. 

If there was no resistance to RG-101, based on the available data RG-101 given on week 4 would add ~6 weeks to deep viral suppression to the treatment regimen, in a way resembling a 10-week oral regimen which have much higher odds of viral clearance.  If viral resistance (and not waning drug levels as I am assuming) played a role in the rebounds seen in the single-dose study, then this would not necessarily be the case.  I say ‘not necessarily’ because even then, the risk of developing viral resistance to RG-101 should be much lower when given in combination with other agents as is the plan.

Take-home: I remain cautious (but not short any more) prepared to take advantage of another bout of panic selling that could come with the release of the resistance analysis.  The quality of the new leadership to lead the exciting microRNA platform will also indicate whether Regulus can finally live up to its original promise.  Long-term, whether precipitated by the insider sales or not, the changes should be good as morale at the company from what I can tell had been low.

PS: in more positive news, Regulus Therapeutics today reported that a first-in-man study with their second most advanced microRNA Therapeutic, RG-012 for the kidney-related orphan disease Alport Syndrome, has begun dosing.

Regulus Therapeutics RG-101 Continues to Have Potential in HCV Treatment Landscape

Having attended the International Liver Congress last week in Vienna, Austria, it has become clear to me that HCV is not going away soon.  Even in the US where progress towards its ‘eradication’ may be considered most advanced with about 1/5 of the known patient population treated last year alone (~250k), it will be an uphill battle to identify, treat, and pay for the millions more infected. Worse still, it is not enough to simply cure the existing pool of HCV patients, but also stop the cycle of re-infection (largely the result of injection drug use).

Treatment cost is one challenge and the current drug rationing approach leads to the counterproductive warehousing phenomenon where current medical intervention is focused on the patients with more advanced liver disease.  This is not only the hardest-to-treat population, but also allows the liver health of the previously less sick patients to deteriorate.  This obviously makes little sense also from a pharmaco-economical perspective when getting rid of HCV early on has now been shown over and over again to dramatically reduce HCV-related cirrhosis and liver cancer.

Another problem is the fractured treatment landscape that exists for the various patient populations (split up according to fibrosis/cirrhosis stage, genotype, co-morbidities, the rapidly growing concerns around drug-drug interactions, available/accessible meds etc) making it difficult for even the learned gastroenterologist to keep up with the latest developments and putting HCV treatment practically out-of-reach for the general practicioner.  

12-24 weeks remains the standard drug treatment duration with docs worrying about shorter treatment regimens being sub-optimal.  A triple regimen by Gilead after 4 weeks of treatment merely achieved a 27% SVR12 which in the DAA world is practically synonymous with a cure.  The best shot at shortening treatment duration may therefore come from Achillion with 6 week of DAAs achieving high cure rates in 'easy' patient populations.

While interferon is on the way out, it could make an at least transient comeback for the hard-to-treat genotype 3 where, in addition to cirrhosis, cure rates with the all-oral DAAs low (60-80%).

To sum it up, the liver community has expressed multiple times at ILC2015 that a short-acting pangenotypic regimen is an important goal in the development of new medications for HCV.   And if they paid attention at the oral late-breaker on Saturday, RG-101 is poised to play a critical role in filling this unmet treatment goal due to its long duration of antiviral activity following administration, regardless of genotype.

RG-101 update: more relapses, but thesis intact

The clinical investigators of Regulus Therapeutics presented a 20 week update on the phase I study in genotype 1, 3, and 4 patients with good to moderate liver health.  28 patients received study drug RG-101, 4 placebo.

At the primary endpoint on week 8 (reported in earlyFebruary), slightly more than half (15/28) of patients treated with RG-101 were below the level of quantitation (BLOQ).  According to the company, most of them were not only BLOQ, but undetectable (by sensitive PCR) at that.  This is a remarkable feat given that the GalNAc-conjugated phosphorothioate antisense molecule had been only given once.

According to the latest update, half of those patients eventually relapsed (7-8 depending on whether you count the patient that was lost to follow-up), most of them shortly after week 8.  Although the relapsers are slightly disappointing as in the short-acting DAA world undetectable virus for 8 (or better 12, SVR12) weeks following cessation of treatment is more or less equivalent to a full-blown cure.

Of course, the prognostic rules for a long-acting agent like RG-101 with a slower onset of antiviral knockdown ought to be different.  The notion that the viral rebounds were simply due to waning drug levels in the liver (and not due to viral escape mutations!), was supported by the biomarker analysis in the healthy volunteer part of the phase I study, also presented at ILC2015, where the trough in viral knockdown (~day 28) more or less coincided with maximal total cholesterol lowering as a predicted by miR-122 biology.

Of note, there was no apparent benefit of increasing the dose from 2 to 4mg/kg which was consistent with preclinical evidence that showed a declining liver/kidney drug ratio at 4mg/kg and maximal cholesterol lowering at 2mg/kg in humans.  This indicates that ASGPR receptor binding becomes saturated when too much GalNAc antisense is given at once.  The increased drug liver concentration at higher concentrations observed in earlier preclinical studies probably indicate uptake in non-productive compartments of the liver, including Kupffer and sinusoidal endothelial cells.

  

The hope is that with a second dose of RG-101 28 days after the first shot, maximal viral suppression can be maintained for at least another 4 weeks to stave off any viral comeback as seen in the single-dose study.  This is supported by both the healthy volunteer part of the study and the chimeric PXB mouse experiments presented which showed that such a second dose not only maintained drug potency, but in fact led to a step-up in efficacy.  I am therefore optimistic that with 2 doses of RG-101 monotherapy alone ~50% cure rates can be achieved in patient populations similar to that in the phase I study.

This, however, is not even the goal.  The ultimate goal would be to establish a simple pan-genotypic 4-week treatment regimen.  Accordingly, the combination of RG-101 with a DAA(s) (sandwich regimen) can be expected to result in a very, very deep viral knockdown by week 4.  At this point, a second shot of RG-101 would be administered to give the immune system another 6 weeks or so to finish off the virus.  I believe a very realistic scenario, and depending on which patient populations you are looking at a very compelling alternative to current HCV medications and those in development. 

PS: Open questions

Unfortunately, given that cholesterol lowering was still close to maximal at week 8, it would have been comforting to show a mutation analysis from the clinical study to confirm that viral relapse was not explained by the virus successfully developing resistance against RG-101.  This is such an obvious question that one wonders why Regulus did not present the data (yet). 

Another question mark around the current data set is why Regulus is not disclosing the differential effect of RG-101 on good and bad cholesterol and instead is reporting total cholesterol lowering.  The study investigator said that they are still analyzing the data from the multi-dose healthy volunteer study  (months after completing dosing???) and are planning to publish those.  I am mildly optimistic that this could unexpectedly bring to the fore the cardiovascular potential of miR-122 targeting, although in this case (à mostly chronic treatments) the liver cancer concern around miR-122 inhibition may be more valid than it is for the 2-shot HCV treatment goal. 

AstraZeneca Selects MicroRNA Development Candidate, Blazes Innovative Trail

When it is screaming into your face that your business model has failed you and the young competition is running circles around you, only then you might be compelled to change. 

This certainly is true for Big Pharma which have lost sight that their business is to make a buck while increasing the health of their customers instead of wasting time and energy on challenges like turning a twice-a-pill into a once daily therapy.  In its quest to optimize their business processes, it has thus thrown out of the window revolutionary, innovative technologies that just would not fit into those loved models.

Case in point, Merck writing off their multi-billion dollar investment in RNAi Therapeutics and selling it to Alnylam for $175 in largely equity and some cash. Alnylam then turned around and made at least a 10x return on the RNAi trigger stabilization chemistry by Merck in little more than a year.

This is a rough estimation of how much the Merck RNAi assets have approximately contributed to increasing Alnylam’s market cap.

AstraZeneca leading the way for Big Pharma in RNA Therapeutics

Not long ago, AstraZeneca was widely vilified for being the worst of the worst in terms of R&D productivity.  Their labs just would not produce new compounds that mattered to patients.

After a corporate shake-up, things certainly have changed on the innovation front.  AstraZeneca has fully emerged as a real risk-taker when it paid Moderna $240M in upfront monies alone for access to a comparatively early-stage mRNA Therapeutics platform in 2013. 

Before that, however, it already got active in the RNA Therapeutics in a less visible manner, notably with a much smaller, but possibly more profitable deal with microRNA Therapeutics platform company Regulus Therapeutics.

In the 2012 deal, AstraZeneca made a $25M equity investment in addition to a token $3M cash hand-out in the then privately-held Regulus Therapeutics.  In exchange, AstraZeneca received 3 microRNA target picks in the cardiovascular, metabolic, and/or oncology areas.

The best part of the deal for AstraZeneca (and the reason why I took money off the table today at what I considered an outsized reaction) was that it only has to pay $2.5M per target/candidate pick and Regulus Therapeutics has to pay for part of the work involved in generating the candidate at that.  There would, of course, be the milestones and royalties, but they should also be modest, in-line with the $2.5M payment due now. 

Oh, those were the good old times of abusive (because they could) Big Pharma biotech business development deal right on par with the steal that The Medicines Company got from Alnylam with regard to the PCSK9 target.

But still, you have got to credit AstraZeneca that unlike its brethren they not only sealed the deal, but actually advanced one of the first clinical candidates involving a fundamentally new molecular target class.  It will be interesting whether they will do the same in mRNA Therapeutics.

Anti-miR103/107 antagonism for improving liver health in diabetes

Initially, the focus  of the partnership had been on what looked like a very promising HDL-augmentation strategy by inhibiting miR33 in the liver, but this candidate has apparently taken a backseat in favor of the insulin-sensitizing strategy by inhibiting miR103/107.

It had been known that in type II diabetes, there is an inverse correlation between insulin sensitivity and miR103/107 expression.  Supporting a causal involvement, inhibiting miR103/107 in mouse models of diabetes with (unconjugated) antisense oligonucleotides increased not only insulin sensitivity, but also had positive effects on a couple of other diabetes-related parameters not only in the liver (e.g. triglyceride levels), but also body fat (adipocyte size/differentiation).

One puzzling aspect, somewhat akin to Regulus’ Alport’s program (--> miR-21), in exploiting anti-miR103/107 for pharmacological intervention is that it was initially uncertain what the target cells ought to be: adipocytes and/or hepatocytes?  A role for miR103/107 expression in adipocytes was particularly supported by the observation that its steady-state level there is higher than in the liver and the fact that single-strand phosphorothioate oligonucleotides also distribute to body fat.

However, with the adoption of GalNAc conjugation technology where most of the oligonucleotides now accumulate in hepatocytes it seems that AstraZeneca and Regulus have come to the conclusion that it is the liver that once again is calling the shots here as it usually does in diabetes.  You can deduce this from the fact that a GalNAc version was selected as the clinical candidate (AZD4076) slated to enter the clinic later this year.

Taking advantage of the observation that anti-miR103/107 has positive effects on liver triglyceride levels, the clinical development of AZD4076 will at least initially be geared towards treating non-alcoholic steatohepatitis (NASH) in diabetes patients.

Simply Good: Regulus Therapeutics’ MicroRNA Inhibitor for HCV

Last year’s European Liver Meeting in London (EASL) was all about progress made in the treatment of HCV.  In addition to the expected buoyant mood among participants, questions were asked about a) affordability and even more so, b) the complexity of the treatment landscape. 

We have heard a lot about certain pricing pressures in the HCV space recently.  Although more and more observers are now calling an annualized $14-18B market in the US and Europe alone over the next 10 years one not worth pursuing, I happen to disagree, especially if you are talking about an $800M market cap company like Regulus Therapeutics (unlike $90-150B for Gilead and Abbvie) and the continued unmet need in this market.

Practicing physicians want simplicity

Part of the unmet need is the noted complexity of the treatment landscape.  These days, which drug and for how long you take it depends on a number of factors such as your HCV genotype and liver fibrosis score.  Based on  today’s data, RG-101, a microRNA inhibitor developed by Regulus Therapeutics may change this and simplify the life of the busy practicing physician.

Add to this the fact that some subpopulations, e.g. genotype III (~12% of the 3-4 million US HCV population) have standard of care cure rates (12 week daily Harvoni plus much-hated ribavirin) of just over 80% in clinical trials, not counting those who either do not get their prescriptions filled, nor the ~5% that get them filled, but then do not adhere to daily pill regimens. Real life, not clinical studies.

RG-101 potency paves the way for simplified regimen

Accordingly, mean viral load reductions of 4.8log were achieved following a single (!) subcutaneous administration of 4mg/kg (4.1log for 2mg/kg), making RG-101 the single most potent HCV drug ever tested.  Moreover, every subject responded, regardless of genotype and fibrosis score. 

Almost as impressive, for the 2mg/kg single dose cohort where day 84 (SVR12) data is now available, 4 out of the 14 given RG-101 were undetectable for the virus and could well turn out to be cured from just a single dose of drug.  In the same cohort, two were below the level of quantitation (BLOQ) on day 57, but rebounded thereafter.  This is hardly surprising given that liver concentrations at that time are predicted to be around 6% of the starting dose.      

Importantly, such a rebound is not the same as treatment failure due to the development of viral drug resistance.  A previous mutation analysis by miR-122 competitor Santaris (Ottosen et al. 2015) which has been developing a less potent anti-miR122 drug has shown that in Man (unlike in prolonged tissue culture experiments), no drug-resistant escape mutant to a miR-122 inhibitor is generated.  Such a high barrier to resistance can be expected from targeting a host factor rather than acting as a direct antiviral.

In cases of viral rebound, a simple second shot on day 28 or a higher dose of say 8mg/kg as I have been whining about for weeks now* would have kept the virus in check, if not eradicated it.

* Parenthetically, today’s data showed that I was right that there would likely be a further dose response from 2mg/kg to 4mg/kg with particular benefit with longer duration (see diverging curves particularly after day 22), also because in preclinical animal data, the liver concentrations increase linearly between 1mg/kg to 10mg/kg.  This is why I am surprised the company Is not talking more about the potential of 8mg/kg even though that dose was found to be safe in the healthy volunteer part of the study.

A sandwich regimen for all

The current data thus support that RG-101 could be the foundation for a universal HCV treatment regimen that looks something like that:

When a patient walks into the doc’s office to discuss his HCV treatment options, the doc convinces him that he should get treated and offers to give him the first shot of RG-101 at that visit that sits in his fridge.  This would take into account that some patients first say ‘yes’ to treatment, but then don’t get their prescriptions filled.  The doc then writes a prescription for 28 days of a potent oral DAA pill such as Harvoni and instructs him to start the pills any time within the next 14 days and asks him to come back after a month.

On that second visit, the patient will receive his second dose of RG-101, just to make sure and torch the earth for for the virus another 30+ days.  He then tells the patient to finish his pack of pills and come back in 6 months to confirm that he got rid of HCV.

Sounds simple enough to me.

RG-101 for HCV: Give Me 8mg/kg

Last October, Regulus Therapeutics announced stunning data from an ongoing trial of anti-miR122 RG-101 for the treatment of HCV infection.  Accordingly, 6 out of 14 patients administered a single injection of 2mg/kg of the GalNAc-conjugated antisense oligonucleotide dropped to what the company referred to as ‘below the level of quantitation’ (BLOQ) by day 30 and remained there as of the update (day 57 for those treated first in the study).

*BLOQ is not the same as 'undetectable'.  It is 'undetectable' for x number of weeks that technically defines a cure.

2mg/kg data looking ever better

The more I look at the data (here for the corresponding dataset), the more intrigued I get.  For starters, the 2mg/kg was only the starting dose in the patient cohort.  Moreover, a patient that had been more recently treated and had reached only 29 day in late October seemed to be on his way to BLOQ.  In fact, after his titers had dropped to below ~1000 IU/ml, viral decline seemed to accelerate as if a threshold had been reached. 

Overall, it seemed that as long as you got below ~1000 IU/ml, the virus would not rebound (at least until day 57).  Accordingly, the 5 patients that rebounded got close (1000-10000 IU/ml), but never below the apparent threshold.  The lack of overlap between the individual knockdown curves also suggest that viral rebound is not the result of stochastic escape mutations, as is often the case in HCV, but simply due to diminishing drug concentrations.

This leaves two patients which as of the update were still slowly declining as if the threshold rule was counterbalanced by declining oligonucleotide concentrations in the liver after day 30.

In summary:

Everybody responded irrespective of genotype and starting viral titers, of these…

…6/14 BLOQ;

…3/14 undecided;

…5/14 nadir of 1000-10000 IU/ml, then rebound.

A one-shot cure?

In the current marketplace, comprising of ~12M untreated HCV patients in the top 7 pharmaceutical markets plus hundreds millions more in the rest of the world, HCV treatment success has less become a function of viral cure rates achieved in clinical trials, but more one of compliance with the pill regimens.  Therefore, a therapy which would shorten current treatment regimens (say to 4 instead of 8-12 weeks), or even involve just one or two subcutaneous administrations in the physician’s office as part of routine checkup visits, would have great pharmacoeconomic impact.

The company is currently crunching the numbers for the next higher, 4mg/kg cohort.  In general, with RNAi and antisense therapeutics, what you see with increased doses is a slight acceleration of gene knockdown (thereby shifting the knockdown curves down), and, likely of more importance in this case, extended duration of drug activity.

The latter is supported by animal, including non-human primate data that showed that liver concentrations of RG-101 increase linearly with dose from 1-10mg/kg.  This means that for the 3 undecided patients in the 2mg/kg cohort, a doubling of the drug concentration could have easily pushed them BLOQ.  

Alternatively, a second dose of 2mg/kg on day 29 would have achieved that as also supported by animal data showing that viral nadir drops further when a second dose is given (on the left is an example from the challenging chimeric mouse model).

I am less sure whether the other 5 patients would have gotten there with 4mg/kg, but would be much more sanguine about it with a dose of 8mg/kg.

A mistake not to escalate to 8mg/kg

Unfortunately, Regulus Therapeutics stated last year that based on biomarker data which measures the activity of human genes naturally regulated by miR-122, 4mg/kg would be the highest dose to be tested in HCV.  This is because the biomarker response seemed to have saturated already by 2-4mg/kg.  This despite of the fact that they had established in the same phase I study that 8mg/kg is also safe and well tolerated in non-infected healthy volunteers.

I clearly think that stopping at 4mg/kg is a mistake.  First, I highly doubt that at least in terms of duration of biomarker activity, they did not see improvements with higher doses (show me the data).  Second, it is wrong in my opinion to assume that drug saturation with regard to microRNA activity against endogenously expressed genes is a good reflection of microRNA activity in the context of viral replication.  In this case, the rationale is further in question because of the special way miR-122 acts in HCV replication (increases, not decreases activity).

Tempering expectations

As we await the 4mg/kg data and an update on the 2mg/kg cohort in ‘early February’ according to recent company guidance, I should caution that the above scenario suggesting a one-shot monotherapy cure is within reach is obviously an unbelievably exciting best-case scenario.  There is a lot which could make the market react adversely to the upcoming data.  This includes emerging side effects, and responses that could even be worse than the 2mg/kg data, e.g. if some patients do not respond at all or if the company is right in their biomarker assumptions which due to chance could make the 4mg/kg data look worse numerically. 

Therefore, my base case for market-neutral data is that all patients will have to respond, and that the extent of the response will be similar to that seen with the 2mg/kg dose.  But then again, I’m looking at the data and keep thinking to myself…’8mg/kg might be the one-shot cure that could transform HCV treatment’.  In any case, the company has little to lose from dose escalating to 8mg/kg.

Co-delivering Antisense and RNAi for Cancer

The upcoming phase I top-line data for ISIS-STAT3Rx in liver cancer (HCC) to be presented at the upcoming EORTC-NCI-AACR triple meeting in Barcelona (Nov 18-21) will be an important test of the potential utility of RNAseH antisense oligonucleotides (ASOs) incorporating high-affinity chemistry in oncology.  

Based on the body language by ISIS Pharmaceuticals* and last week's $7.5M milestone payment from partner AstraZeneca for progress on ISIS-STAT3Rx (aka AZD9150) , I am tempted to speculate on more than just ‘encouraging’ results.  On the other hand, Regulus Therapeutics partner Sanofi at the Canton Nucleic Acid Forum (CNAF) also last week, noted the need for formulating antisense oligonucleotides to get their anti-miR21 oncology candidate into liver cancer tissue. It is likely that they will be using liposomes for that (--> Tekmira?).

* I was surprised that at the CNAF in Guangzhou, China, Brett Monia from ISIS mentioned STAT3Rx and cancer right after gene silencing in the liver as the next interesting application for ASOs- that is ahead of even the exciting CNS opportunity.

The discrepancy in body language may be explained by just cultural differences (conservative, blasé Big Pharma versus risk-taking, enthusiastic biotech); it may also be a reflection of different requirements for effective tissue concentrations with RNaseH versus anti-microRNA modalities or different target requirements.  Whatever the reason, the Sanofi comments clearly support the notion that getting naked, even phosphorothioated oligonucleotides into cancer tissues is not as robust as with other tissues such as the liver and kidney.

I am therefore pleased that it is a Big Pharma, the last place where I had expected that from, that is connecting the dots and is considering delivery formulations, even the supposedly ‘toxic’ LNPs.  The concept is that the nanoparticle would facilitate a higher tumor concentration of the oligonucleotide, and once in the tumor interstitial space, cellular delivery may be facilitated via two routes.  Firstly, it may be traditional liposome-dependent cell uptake and cytosolic release.  Alternatively, those LNPs that get stuck in the interstitial space would spill the phosphorothioate oligo which may then diffuse further and get into the target cell by self-delivery. 

The same concept, of course, applies not only to phosphorothioate ASOs, but also to self-delivering RNAi triggers (+/- conjugation).

But why stop there? I propose that for cancer delivery, one should strongly consider and co-formulate RNAi triggers and ASOs into a shared nanoparticle.  They could target either the same gene, or they could target different genes thus taking into account the desire for a multi-pronged attack on cancer   (-> resistance).  In that scenario you would benefit from the superior gene silencing efficacy of RNAi triggers in those cells that they were able to reach, but then extent your reach with the help of the more agile, penetrative single-stranded antisense molecules. 

As such, PS-ASOs have an advantage in addressing intra-tumor heterogeneity of the EPR effect which is a well-recognized problem of nanoparticle delivery for cancer.

Another benefit of combining RNAi triggers with RNaseH ASOs is that you could achieve additive gene silencing activity when going after a shared target.  For example, if the RNaseH ASO and the RNAi trigger had both say a 70% knockdown activity on their own in the nucleus and cytoplasm, respectively, the combined activity would likely be ~90% which genetically could make a huge difference.

There is also a potency benefit, although more minor, when going after different targets because at least in RNAi, the best you can hope for when combining RNAi triggers against different targets is that they do not interfere/compete with each other.

With solid cancer data from both Tekmira (RNAi) and ISIS/AZ out over the coming weeks, we will soon get a sense of whether the field has moved forward in oncology and what the next steps ought to be.

Anti-MiR122 Therapeutic Stuns HCV World with Single-Dose Efficacy Results

This morning, Regulus Therapeutics greeted us with amazing results from a phase I study of RG-101, an anti-microRNA 122 oligo for the treatment of HCV infection.  The results show that in the exploratory HCV-infected patient subgroup, a single dose of 2mg/kg of RG-101 resulted in a mean viral load reduction of 4.1log on day 29.  All responded with viral declines, with 6 and 3 of the 14 patients with viral levels below the level of quantitation on days 29 and 57, respectively.   

These results even exceed my own wildest imaginations (as discussed here yesterday) and I’m amazed how much this virus, in all patients, seems to have come to rely on this host-derived microRNA for replication and/or genome stabilization.

It is not clear whether increasing the dose to 4mg/kg, the pre-planned upper dose in the HCV-infected cohort for which dosing is ongoing will bring any additional benefit given that the biomarker data (host genes targeted by miR-122) from the healthy volunteers showed a plateau already at 2mg/kg, indicating the power of this GalNAc chemistry approach.  My guess is that the main benefit from a higher dose would be a decrease in response variability.

Interestingly, IL-28 status, frequently a predictor of treatment success, did not influence the results, nor did HCV genotype seem to have an impact (small numbers).  This further supports that RG-101 could fill some of the more attractive opportunities in the current HCV market.   

Regarding safety, mild and transient injection site reactions seemed most significant with no serious adverse events in the entire study, including the healthy volunteer cohorts (up to 8mg/kg).  This is also consistent with data for Alnylam’sALN-TTRsc which uses a similar GalNAc chemistry and where multiple doses up to 10mg/kg had been tolerated, with injection site reactions, especially at 10mg/kg, being the main safety finding.   

So what’s it all worth?  The results position RG-101 to facilitate a 4-week HCV dosing regimen (compared to typically 8-12 weeks currently), potentially in combination with a single direct-acting antiviral such as Olysio by Johnson&Johnson.  One or two injections maximum.  Great compliance, potentially pan-genotypic, ideal for the busy practicing physician who does not have the time nor inclination to know the ins and outs of each DAA.

In dollar terms, I’d like to think that with this drug profile, this overlooked compound and company are worth as much as what Merck recently paid for HCV drug developer Idenix: $3.85B. The market valuation of Regulus before the news: $300M.  Needlessly to say that I'm long the stock.

PS: GSK once had rights to a precursor compound of RG-101 which it did not exercise.  Importantly, at the time, Regulus’ anti-miR122 compound was not GalNAc-enabled.  This would have necessitated much more frequent dosing and higher dosages and resulted in less potent and more protracted viral declines, i.e. something that would not have been competitive in the current HCV marketplace.  But as often the case with Big Pharma and cutting-edge technology, today’s data clearly shows them wrong.  It has to be said though that GSK more or less got out of HCV which also would have explained GSK’s decision RE anti-miR122.

PPS: Congrats to Peter Sarnow and Catherine Jopling who in 2005 made the mind-boggling discovery that HCV relies on a microRNA for its replication.  I hope they will be handsomely rewarded for it.

Predicting the Outcome of Regulus HCV microRNA Therapeutics Study

Regulus Therapeutics is on track to reveal phase I results of its anti-HCV compound by the end of the year according to a presentation at last week's OTS.  Although the phase I study is largely a healthy volunteer dose-escalating safety study, it does involve a cohort of HCV patients to assess the viral knockdown kinetics following a single dose of anti-miR122 RG-101. 

MicroRNA-122 is a small RNA host factor that had been identified to play an important role in HCV replication.  As a therapeutic target it promises a low risk of viral resistance, pan-genotypic activity, and entirely novel mechanism of action making it suitable for combination therapy.

Based on the experience with an LNA-based competitor compound by Santaris/Roche (Janssen et al. NEJM 2013), I predict a 2 to 3 log viral knockdown, with a 3 log viral knockdown setting the scene for RG-101 as a single shot in a 4-week treatment regimen in combination with other oral direct-acting antiviral agents (DAAs).  If viral reductions were on the low end of my expectations, it may require 2 or 3 doses within 4 weeks for GalNAc, cET-enhanced RG-101 to facilitate such a short treatment period which is considered a necessary attribute of future treatment regimens in an increasingly competitive market.

Miravirsen comparison

Earlier studies by Regulus competitor Santaris/Roche largely form the basis for my predictions.  In particular, a phase II study of 5 weekly doses of miravirsen at 3, 5, and 7mg/kg yielded 1.2log (3mg/kg) and ~3log (5 and 7mg/kg) viral knockdowns.  Miravirsen is an LNA-based antisense compound whereas RG-101 involves the analogous high-affinity cET chemistry.  Conservatively, miravirsen has a slight (1-3x) potency advantage over RG-101 without the GalNAc conjugation when considering non-human primate and clinical AldoA and cholesterol results which reflect anti-miR122 activity.

However, the GalNAc conjugate in RG-101 is giving it a great 10-30x boost in potency, meaning that overall RG-101 should be 3-30x more potent than miravirsen.  It is because of this and considering that RG-101 is given at 2 and 4mg/kg in the phase I trial in HCV patients, that I arrive at a predicted 2-3 log HCV reduction in the phase I study.  This also makes the conservative assumption that 3log viral reductions is all that an anti-miR122 treatment strategy may achieve based on the apparent plateauing of miravirsen at 5mg/kg.  The 3 log prediction would require that a single shot of RG-101 can already achieve super-therapeutic tissue levels of the oligo.  This, however, cannot be assumed given that for non-ligand-targeted phosphorothioate antisense technology at least this would normally require a multi-dose loading schedule.

But isn’t RG-101 late to the HCV game?

It’s long been thought that it’s game over for RG-101 given the dynamics in the HCV markets.  In particular, the already approved and soon-to-be-approved all-oral DAAs which typically achieve cures in >90% of patients in 8-12 weeks in well-supervised clinical trial settings, would make newer agents like RG-101 seem outdated.  On the other hand, especially given cost pressures (~$100K per average treatment and ~4 million infected in the US alone), the uptake of the new treatments has been relatively slow with only 1-2% treated thus far (according to some of the analyst reports that I have read).  And even then, the sales have been spectacular: Sovaldi e.g. is on track to become the most successful drug launch ever being on track for more than $10 billion in sales in its first launch year!!!

It is the cost pressures (pricing per pill, not per cure) and improved adherence that make a shortened 4-week treatment period so desirable.  A single or two subcutaneous injections in the doctor’s office during routine check-ups where blood is taken anyway should add to compliance.  Holding the subcutaneous route of administration of RG-101 against the drug is therefore wrong in my opinion and the ‘all-oral’ notion, a misnomer really, has only been so attractive because the former subcutaneous standard of care, interferon, was so unpopular not because of the needle injections, but because of its side effects.

So place your bets.  I believe RG-101 has value and will not only be superior to the Santaris/Roche drug, but has pretty much caught up with it in development terms given that miravirsen has only been tested with a DAA (telaprevir) that is already long outdated.  As to the necessary Big Pharma/Biotech licensee, Johnson&Johnson tops my list.

Disclosure: Long RGLS as an RNA Therapeutics stock waiting to be re-discovered with an increasingly broad and clinical-stage pipeline and good financials.  The RG-101 results should only be the trigger for the re-discovery of this ~$300M market cap company.   

Fed-Induced Sell-Off Offers Attractive Values in RNA Therapeutics

For whatever reason, Janet Yellen does not like cheerful biotech investors and between her first policy speech as new chairwoman of the Fed in April and comments last week decrying biotech and social media stocks as inflated she caused two major sell-offs in RNA Therapeutics stocks.  As a result, industry bellwethers ISIS Pharmaceuticals and Alnylam are trading at less than half their 52-week highs, though better than ‘second-tier’ RNA Therapeutics companies such as Tekmira and Arrowhead Research which are trading down even more than that.

When the technology has matured to the point that it can bring significant value to patients, pipelines rapidly progress and expand, and with companies flush in cash by historical standards, this sell-off offers in my opinion great risk:rewards.  Here is a run-down of my five favorite plays.

1.       $ISIS. ISIS Pharmaceuticals is my current RNA Therapeutics core holding that I would not want to be out of.  With ligand-targeted technologies offering much lower tissue exposures and therefore much better safety margins, multiple mechanisms of actions and a pipeline that rivals any in the industry, this company is on track to become the most valuable in the industry- if not economy (subject to the vagaries of the healthcare policy directions). 

At a $3B market cap, no foreseeable financing needs, and a healthy newsflow (especially regarding partnerships), the downside should be relatively limited, and I will sleep tight even knowing that Yellen (who seems to confuse the Dow and large cap biotechs with the broad biotech industry) might open her mouth again to talk about something she obviously understands very little about.

Best long-term risk/reward.

2.       $TKMR. Tekmira is the most beaten-up stock of the bunch that gets credit for almost nothing.  This is mainly the result of the Ebola trial results which were a disappointment- little doubt about that.  However, translating these results from the unthankful ‘Haertetest’ to the rest of the pipeline is unwarranted.  This is because a highly most potent knockdown technology for the liver, should be able to carve out some market for itself.  And if the HBV product won’t require transient immune suppression and/or if its use is deemed acceptable in HBV with its expected finite treatment period, there is an enormous opportunity for which the favorable newsflow is only about to heat up with the presentation of the preclinical dataset..

It is the newsflow from new product candidates (esp. HBV)), clinical trial starts (liver cancer, HBV, alcohol dependency), clinical trial results (ALN-TTR02 OLE, TKM-PLK1 interim phase II with little to no expectations by the markets), and business development (mRNA), that makes TKMR an attractive buy at these severely depressed levels ($31 in April, now trading at $9).  And with the Ebola Haertetest on Clinical Hold, TKM-EBOLA does not scare me anymore as an investor.  It even offers a potential near-term catalyst should the Hold be lifted.

Best 6-12 month risk/reward (until release of phase IIa HBV knockdown results).

3.       $RGLS.  I’ve never liked Regulus much as a stock, mainly because of its anemic pipeline that its own management does not even seem to be excited about given that it now calls the potent GalNAc-targeted anti-miR122 product candidate for HCV merely a proof-of-concept for the company.  However, given that the HCV market emerges as one with a long-tail, not all is lost for this pan-genotypic, potentially one or two-shot treatment when used in conjunction with other HCV drugs. 

When HCV-competitor Achillion recently surged on the back of the Merck takeout of HCV play Idenix as it reminded investors of the long-tail nature of the market, Regulus was forgotten.  It may reach investors’ consciousness when they report phase I results possibly early next year.  Solid financials with more than $100M in cash and a reasonable $300M market cap given its prominent position in the microRNA Therapeutics industry.

Speculative buy with regard to single catalyst.

4.       $ARWR. All eyes are on the outcome of the ARC520 phase IIa study in HBV-infected patients which could be announced any day now.  My prediction is a ~80% HBsAg knockdown at the 2mg/kg dose.  My problem is that I have little idea about how the market will respond to that given that the trial is not designed to achieve the ultimate goal for this therapeutic candidate: a functional cure.

Most investors seem to expect an easy double (or more) from current levels, an notion that I do not want to necessarily reject for an 80% knockdown.  It all seems to depend on how the results will be framed by the analysts and how successful the dueling hedge funds are in painting the tape to their advantage. 

With more than 10% of the float short and given ARWR's historical trading pattern, great volatility is a given.

Highly speculative buy, so much so that options may actually be the best way to play it.

5.       $SRPT. No matter the negative market reception to the recent release of the 144-week study results, Sarepta and patients will get their accelerated approval for eteplirsen.  The debate has reached a point that the drug development clock for Duchenne Muscular Dystrophy cannot be set back another 5-10 years by rejecting the current class of candidates of which Sarepta’s looks to be the most promising- despite the highly anecdotal nature of the results.  This is because eteplirsen seems amazingly safe, so the potential harm from giving a potentially non-effective medicine is limited.  This is clearly not the case for Prosensa’s exon skipping drug candidate, and don’t even get me started about PTC Therapeutics …

Solid 12-month risk:reward juiced by the large short position (>30%).