Merck’s RNA(i) Therapeutics Unit on the Chopping Block

After more than 6 years of playing it safe and producing nothing tangible in terms of clinical development candidates, I fully expect that the time has come for Merck’s RNA(i) Therapeutics unit to be slashed.  This morning, Merck announced a company-wide cost-cutting re-org, as part of which it aims ‘to reduce its focus on platform technologies’.  Remember Roche 3 years ago? 

Similar to Roche, the immediate financial benefits of scrapping the unit not only come in the form of savings in R&D expenses, but also likely tax write-offs due to for example the $1.1B purchase of Sirna Therapeutics in 2006.  Expect the company to exceed analysts’ expectations for coming financial results.

However, the most important factor why I believe the unit's fate had been sealed was the departure of Peter Kim as the Head of Merck Research Laboratories.  It has been said that he had been a key backer of the unit, and with the biologics guy from Amgen, Roger Perlmutter, probably intent to erase Dr. Kim’s legacy…

It is hard for me to feel sorry about such an event.  Their RNAi science was probably the best among the Big Pharmas, but hiding behind the VIOXX experience forever while taking home monthly salaries was asking for trouble.  Meanwhile, the likelihood that Merck will partner with the real innovators in the space on specific product candidates has increased today. 

Merck: “Tekmira are Truly Experts [When It Comes to Formulating SiRNA-Liposomes]”

Roche’s decision this week to terminate in-house RNAi Therapeutics development is widely reported to be a vote of no confidence in the platform. The alternative interpretation, however, namely that it might reflect a vote of no confidence in the ability of Big Pharma to innovate from within receives little or no consideration in an online media world that, at best, gets compensated according to click number. Even more so in an environment that demands immediate financial results, they may prefer to play it ‘safe’ by buying innovation in later for hundreds of millions in the form of drug candidates that have already proven themselves in phase III studies or have even received regulatory approval.

In addition, it is widely understood that since Roche intended to use liposomal delivery for its first RNAi-based product candidates, Roche must have been disappointed with the performance of Tekmira’s LNP delivery technology. Again, I strongly disagree that this is necessarily the right conclusion, because for Roche the development of LNP-delivered siRNA therapeutics did not really require a large in-house RNAi Therapeutics development organization. One could even hypothesize that the collaboration with Tekmira and Alnylam opened Roche’s eyes just how difficult it is to develop cutting-edge technologies such as RNAi Therapeutics with the same efficiencies as pure-play companies can, at least within current organizational structures.

In this light, I found the presentation by Alan Sachs, Head of Merck's RNAi Therapeutics efforts, at the recent RNAi Asia meeting particularly telling as he went out of his way to complement Alnylam and particularly Tekmira for their pioneering work in RNAi Therapeutics. It almost appeared like Merck considered them less as competition and that Merck would stand to benefit from their success in developing the breakthrough technologies necessary for RNAi a therapeutic reality.

The number one example of how Merck, and Big Pharma in general is dependent on biotech innovation in the field of RNAi Therapeutics is siRNA delivery, in LNP-mediated delivery. The statement thus emphasizes that all liposomal siRNA formulations are not created equal. Failures that others see and report with their home-brew liposomal delivery methods cannot necessarily be applied to Tekmira’s LNP technology.

If the RNAi Asia meeting is any guide, then Tekmira’s LNP technology is the de-facto gold standard in systemic siRNA delivery, widely acknowledged by industry and academia. As the gold standard, of course, it is also exposed to a lot of criticism. An interesting dynamic that emerged in this meeting is that not only does liposomal siRNA delivery receive heaps of criticisms by those companies that develop competing delivery technologies, but that liposomal researchers themselves start criticizing it. Unfortunately, these are also the scientists that get approached by the investment community and pharmaceutical industry for their views on liposomal delivery.

As Alan Sachs put it: there are dozens of variables in formulating a liposomal siRNA nanoparticle. Slight variations can have large effects on shape, stability, and reproducibility of the process, all with important implications for the toxicity, potency, and commercialization of such therapeutics. It is formulation that Alan Sachs considers Tekmira to be ‘truly experts’ in. He goes on to say that the question of IP exclusivity is not really that relevant, what matters at the end of the day is really the know-how behind reproducibly formulating safe and efficacious LNPs, at commercial scale at that.

This, I guess, also addresses the claims by other company, valid or not, that they do not require Tekmira’s IP for their own liposomal siRNA delivery purposes. It is true that many groups can efficiently knock down genes in the liver, and some also in tumors in rodents. Some now also at quite low microgram per kg potencies. Transitioning from rodents to non-human primates, however, has proven to be a big hurdle for almost all of these groups.

And listening to the talks and reading the literature, it is not difficult to see why performances differ so widely. Often, lipid formulations are cooked up to superficially approximate what has been reported by Tekmira and their collaborators. However, because the formulation processes are typically not comparable and little effort is put into characterizing what particles have actually been generated, these particles will behave very differently to a Tekmira LNP, no matter how similar the lipid chemistries and molar ratios applied. In more extreme examples certain lipid components have been dropped out, or the particles are highly positively charged and unshielded and therefore prone to aggregate. Still, implications are directly drawn towards the safety of Tekmira’s LNP technology. Sometimes it appears that some research groups have only recently entered the field and are trying to re-invent the wheel by reporting what should have already be well known.

My cynical view is that pointing out such supposed safety issues, is what gets you research grants these days. Since Tekmira’s LNP technology is the gold standard, funding agencies are more likely to fund research into the safety of LNP technologies than on the safety of some obscure delivery technology.

I do not want to suggest that there are no safety concerns with LNP delivery, also as practiced by Tekmira. But from my perspective, I am more than encouraged by the clinical record so far: the Tekmira ApoB study went up to 0.6mg/kg and experienced (only) one case of apparent immune stimulation, and Alnylam’s ALN-VSP02 is still dose-escalating, having reached 1.5mg/kg. Before these programs went into the clinic, my biggest concern for Tekmira’s LNP technology had been immune stimulation at much lower dosages based on Protiva’s experience with the liposomal delivery of plasmids almost a decade ago.

With regard to safety, Alan Sachs complemented Tekmira on putting patient safety first and making Tekmira’s whole-blood immune assay immediately available to the industry. Like Alnylam, Merck also quickly adopted/tested it. He added, however, that in Merck’s limited experience with the assay, results could vary quite a bit when using blood from different patients and that, as a result, the test cannot be considered to be reliable yet. My tendency, however, is to interpret the data to mean that the test is in fact very sensitive and reliable and that there may be some natural variability in how patients respond to LNPs. If a test like this can pick up some of these differences, then it should only contribute to the safety of LNP delivery. I’m sure Alnylam, and soon again Tekmira with TKM-PLK1, are busy collecting patient blood in an effort to determine the basis, maybe genetic, of such variability.

As an investor in Tekmira Pharmaceuticals, I must say that I do not really mind LNP formulation to be such a complex process. After all, one reason why the pharmaceutical industry is abandoning small molecules and flocking into biologics is that small molecules sales are easily canabilized by generic competition. A ‘naked’ antisense or siRNA that can be generated by straightforward chemical synthesis may face similar generic issues as small molecules. The story, however, would be quite different for an LNP-delivered RNAi Therapeutics with high technical barriers of entry.

In summary, in contrast to what seemed to be the message of an interview with Alan Sachs by Xconomy earlier this year, Merck appears to be as enthusiastic as ever about the potential of RNAi Therapeutics. Liposomal delivery won’t cure all diseases, but ‘even’ Merck considers it promising enough to focus most of their delivery efforts on this technology. As supported by Alan Sachs’ talk at RNAi Asia and the robust publication record by Merck RNAi scientists this year (at least 7 papers by my count), RNAi to Merck is not just about target discovery and validation. It’s much more, but since even with such an effort a Big Pharma like Merck expects to be dependent on sourcing RNAi innovation from the outside, it is best to lower, or ‘manage’ in the words of a Merck spokesperson, overall expectations and enjoy bargain prices.

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.

RNAi Therapeutics and Big Pharma: To Collaborate or to Integrate?

John Maraganore, the CEO of Alnylam, argued in a recent essay in the Xconomy that investing in innovation is a no-brainer now more than ever. However, with a few notable exceptions, judging from the actions of Big Pharma over the last two years in drug development in general, and in RNAi Therapeutics in particular, one would think that this must be an illusion. If anything, the mega-mergers and cutting of R&D indicates that Big Pharma apparently believes that the cure for its current ailments is to first of all slash innovation and focus instead on the marketing and distribution of ready-to-market products.

A related worrisome trend is that Big Pharma is shying away from acquiring small biotech companies building cutting-edge drug discovery platforms such as RNAi Therapeutics. Instead, a look-and-see, risk-sharing partnership structure is preferred, adversely affecting both the speed and quality of developing these technologies, ultimately to the detriment of all stakeholders, including Big Pharma.

My thesis is that this model cannot be sustainable. In a normal marketplace, the high margins in the drug business will eventually have to shift to coincide with where the highest technical barriers and value-adds are, and this is clearly in the discovery and initial development of viable drug candidates and the platform technologies on which they are built. In the age of the internet and the free flow of information and goods, I just cannot believe that distribution and very late-stage development can continue to command the premiums they still do.

When this happens, Big Pharma will find itself with nothing much left, and the business dynamics will change as it has completely lost its capacity to innovate from inside. This could be even further exacerbated in an improved economic environment where small biotech is no longer dependent on the typical late-stage deals with unfavorable terms of trade when there is again reasonable access to the capital markets.

One argument often cited for slashing innovation is that for some reason in-house R&D is not productive, and it is cheaper to buy it in. Flawed logic, of course, because prices should eventually go up to reflect the value biotech brings to Big Pharma. Some go even a step further and argue that innovation has just become too costly, full-stop. If that were the case, then Rome is about to become a village again and we are about to enter the Dark Ages II and investing in any part of drug development and also broader economy would be futile anyway.

Certainly, after living through the millennium bubble, one has to admit that small biotech has contributed considerably to the notion that drug discovery and investment in new technologies is wasteful. But then again, as funding has dried up, many of the get-rich-quick schemes have disappeared and biotech has become much more disciplined as a whole.

How then should Big Pharma become involved in RNAi Therapeutics? I agree here that early-stage collaborations are an important part of the process, as the predictability of discovering and developing new breakthrough and enabling technologies is simply too low and will have to typically first come out of academic laboratories and then be dynamically refined in a small biotech environment to a stage where the technology has very reasonable clinical and commercial potential. At this point it becomes important for Big Pharma to have the capability of evaluating what is real and what not, and laboratories within Big Pharma with a good working knowledge of RNAi Therapeutics should be able to accommodate this, as many of them already do. These can also come in the shape of an acquisition of one of the smaller and struggling pure-play RNAi Therapeutics companies.

After promising technologies have been identified, however, it makes sense to integrate them. This is because even if you can bring drug candidates based on these technologies into the clinic through licensing relationships, clinical development is still a dynamic process requiring quick thinking by those intimately familiar with the technology as the results come in. A case in point from the related gene silencing field of antisense is ISIS Pharmaceuticals’ obvious frustration with the speed and quality of some of its licensees so that it has decided to buy back the rights to a number of antisense drug candidates. The ISIS-GSK deal also partly reflects the realization that at least the early stages of development are better left in the hands of those familiar with the core technology.

SNALP technology is another example. There have been quite a few that claimed a few years ago that almost anybody can make liposomal delivery work. At the moment, however, it is only Tekmira Pharmaceuticals that can claim that. Even if you copy what is published in the scientific and patent literature, mass-spec the SNALP composition etc, you may erroneously believe to have caught up with the 10 year head-start that Tekmira had, but as soon as some minor unexpected problem arises, it immediately requires the deep know-how of those innovators intimately familiar with it to solve it. There is definitely more value to be gained from a platform if you understand and own it, especially early in the life of an emerging technology where the clinical learning curve can still be relatively steep. Once a technology is relatively well understood in humans, sure, more hands-off licensing becomes increasingly appropriate and is certainly an option for those in Big Pharma that are satisfied with accessing individual products instead of enjoying the full benefits from having in-house access to prolific new platform technologies for long-term growth.

It is, of course, important that, once acquired, the innovative culture of the target is not suffocated by the bureaucracy of large organizations. Roche Kulmbach appears to be a good example of the Big Pharma model whereby, instead of slashing R&D, innovation is transferred to semi-independent Centers of Excellence where failure and risk-taking is tolerated and encouraged. In my opinion, the reason why Sirna Therapeutics/Merck has not been successful is because they are their own biggest enemy by having soon adopted a Big Pharma mindset, being afraid to take risks with new technologies and instead hide behind inflexible rules (not guidelines) for what characteristics a technology has to fulfill before even being looked at by the company.

Within the next 4 months, possibly set in motion by the upcoming $100M Novartis decision, we should get some revealing insights into the current thinking of Big Pharma on RNAi Therapeutics. My hope, of course, is that the above was an overly pessimistic assessment of the Big Pharma mindset and that they also differentiate between certain areas in drug development that may well be outsourced and others, innovative platform technologies with reasonable clinical visibility, for which outsourcing and even partnerships alone are not optimal.

Alnylam Wins Important Battle in Kreutzer-Limmer Patent Fight

The Kreutzer-Limmer (KL) patent estate, exclusively owned by Alnylam and very broadly claiming double-stranded RNAs (dsRNAs) for gene silencing in human cells (up to 15-49 base pair dsRNAs), won an important battle at an oral hearing last week at the European Patent Office. This comes after Kreutzer-Limmer has suffered a number of setbacks at the EPO about one and a half years ago. The resuscitation of KL means that Alnylam may leverage this patent as potentially gate-keeping as it looks to enter additional non-exclusive licensing partners for its dominant RNAi Therapeutics patent portfolio, also as a potential backstop in the unlikely event that Alnylam loses the fight for the key Tuschl inventions.

The decision reversed an earlier rejection based on technical objections, mainly by Sirna/Merck and Silence Therapeutics, that some of the claims in the daughter application at issue had been incorrectly drawn from the parental application. In general, the main claim describing the structure of gene silencing short dsRNAs are somewhat clumsily constructed and not as straight-forward as one might imagine. This could be the result of having to take into account the embodiments underlying this claim.

If it were not be so important, reading the deeply philosophical arguments of what it means to be 'double-stranded' can be quite amusing, but unfortunately also very time-consuming and distracting, as are these drawn-out patent back-and-forths. Especially for smaller companies like Silence Therapeutics it may actually be worth focusing on developing the enabling delivery technologies and their therapeutic pipelines instead of having their lead scientists waste their creative juices taking part in these battles.

It is likely that the patent will go back again, but this time to be challenged on other issues such as novelty. Regardless, Alnylam should benefit from last week's decision to uphold Kreutzer-Limmer in that it adds to the appearance that, no matter how the individual patent chips fall, Alnylam has so many patent options that making some kind of licensing arrangement with the company would be required if one wanted to securely develop RNAi Therapeutics. Recent progress in systemic delivery should add to the urgency and may even make waiting for the outcome of the Tuschl Tussle a difficult decision.

Sirna Therapeutics (Merck) in Damage Control Mode

Whenever a Big Pharma talks about RNAi Therapeutics, the investor world listens. Sometimes, however, it is important to put such comments into context, especially now that Merck may very well see its $1.1B investment, essentially into Sirna Therapeutics’ supposedly fundamental Tuschl I patents, evaporate. The $45M+$12M it had to pay in a settlement with Protiva (now Tekmira) for allegedly misappropriating SNALP-related trade secrets would almost seem to pale by comparison. So here a few annotations to an interview that Merck strategically put out recently in the Xconomy and that has raised some eye-brows in the field by providing some rare insights into their hitherto largely top-secret RNAi Therapeutics operations and by revealing some unorthodox drug development philosophies.

“Somewhere around the middle of 2006, we realized that Alnylam did a big deal with Roche, and we realized the area was heating up. We needed to do more than a collaboration per se. It ultimately led to the decision to acquire Sirna Therapeutics, which closed at the end of 2006.”

Merck clearly bought Sirna Therapeutics largely for what Sirna’s management told them to be gate-keeping IP: Tuschl I. This is also illustrated by the fascinating revelation by Dr. Alan Sachs, responsible for RNA Therapeutics at Merck and watched over by a Merck spokesperson during his interview, about Merck’s rush to buy Sirna Therapeutics in 2006. According to the interview, Merck seemed to have heard somehow through the grapevine in 2006 already that a large Roche-Alnylam deal was in the works. Fearful of being shut out from the fundamental RNAi Therapeutics IP, it scrambled to secure freedom-to-operate by purchasing Sirna Therapeutics which had always touted Tuschl I to cover human therapeutics. What follows is history...Merck buys Sirna, the Alnylam-Roche is announced the next summer, and what had to happen happened: Alnylam terminates their collaboration with Merck as it simply became untenable to have a relationship based on the very IP Merck was ardently fighting.Unfortunately for Merck, around the same time Tuschl I started to encounter serious problems in both Europe and the US (see Tuschl Tussle blog).

In this context it is easy to see why Merck is now emphasizing the value of RNAi as a target validation tool instead of a direct therapeutic, and justifies the $1.15B price-tag for Sirna Therapeutics on that basis. While I agree that RNAi should already have a beneficial financial impact throughout the drug development industry by reducing the target risk for other classes of therapeutics, what those responsible for the Sirna purchase should know best, but probably would not want to tell their superiors or shareholders, is that you do not have to pay $1.15B upfront to use RNAi for such purposes. For example, BMS and J&J have been getting the same benefit by working with Tekmira for a fraction of that cost.

And then, yes, we almost forgot that delivery was a challenge. However, taking a step back I find it remarkable that the systemic delivery of siRNAs has progressed from just about being able to knock down genes in mice, to the well established ability to knock down genes in primates and with first evidence for efficacy having been observed in humans. Not insignificant scientific progress for a period of 4 years, and maybe for fairness sake something that Dr. Alan Sachs ought to have mentioned. On the other hand, saying that others have achieved much more with much less does not reflect very well on yourself or organization. And while lipid-based delivery may be the only delivery technology that is ripe for the clinic at this moment, let's not forget that even a single such technology can unlock tremendous value by immediately being applicable to a whole range of diseases.

"AS: It’s a combination of the competition, and from our seat, a misunderstanding of the intent of the collaboration. That is, the field is so ready to put money in, we don’t want a Merck collaboration to be read as a sign of approval...”

To underscore his ‘concern’ that others should not make the mistake of overpaying for delivery technology, Dr. Sachs characterizes most of what is being presented to Merck essentially as worthless, theoretical back-of-the-envelope stuff. I would not want to argue with him that this was not true to some extent, using such deer in the headlights that inevitably will crop up in hot areas such as RNAi Therapeutics as an argument for demanding lower prices for anything delivery does not do justice to the real gems that are out there. And honestly, who really believes Merck to be sincerely concerned about the fiscal responsibility of competitor companies? Thanks for the well-meaning advice.

And to those 1% of clueless small biotech companies that, against all odds, have been found worthy of Merck’s further attention: Don’t get too excited about it. Now, you will have to work with them long enough until they have had enough time to familiarize themselves with your technology to then be able to terminate the relationship. No wonder that a company like Roche has become a much more desirable and, importantly, also a significantly more successful partner when it comes to sourcing RNAi delivery.

"[Unlike] companies developing [RNA-based] ApoB or PCSK9 therapies, for familial hypercholesterolemics, we’d stop our studies at Phase I to show that LDL is lowered or HDL is raised and follow with a small molecule."

Unsurprisingly, Alnylam and Tekmira got special treatment. Only biotech companies, all of which by the way are destined to fail anyway since they can’t afford the 30-year timelines that it takes a Merck to bring innovation to patients, would go into the clinic with intravenous formulations aimed at lowering LDL-cholesterol in desperately underserved hypercholesterolemic patients. I mean, huh, where is the consumer convenience in that?Instead, what you should follow is Merck’s model that, if I interpret him correctly, aims at selling life-style pills to millions of people, including those that won’t benefit from it. So as long as it is convenient and we are able to show in a 20,000 patient trial some minimal, though statistically significant benefit, that's how we plan to contribute to healthcare.

"AS: There are three main areas of delivery. First are lipid-based delivery systems. At the time of our acquisition of Sirna, they had successfully shown lipid-based delivery to the liver. Initially, it was through a collaboration with what is now called [Vancouver, BC-based] Tekmira. That was really the leading standard for the area. Several [applications to begin clinical trials] have been filed with the FDA. We spent a lot of internal research money and time on novel lipids. The liability of that platform is absolutely its safety. As you know from writing about the area, the biodistribution of lipid is focused toward the liver. Which has some indications that are useful for IV therapy, but it’s restrictive with respect to cancers and diseases of other organs."

While Merck seems to respect Alnylam to some degree, for the simple reason that only entities with money deserve respect, little Tekmira must feel quite flattered that it inflated itself large enough to be mentioned a second time. According to Dr. Alan Sachs, SNALP delivery is simply toxic and hopeless. Well at least as a therapeutic, maybe not for 'biomarker-driven' studies. If he had read the scientific literature since 2006, the time Merck lost access to the cutting-edge of liposomal delivery, then maybe Tekmira has learned a thing or two about SNALP technology since. Maybe Dr. Sachs ought to state the real reason why Sirna/Merck has soured on liposomal delivery, at least in public: In 2006, Sirna Therapeutics settled with Protiva on allegations of having misappropriated trade secrets during their collaboration which cost Merck $45M upfront, and $12M in contingent payments [note: to be clear here, the events leading up to this settlement occurred before Merck acquired Sirna].

Surprisingly, and coming as a potential bombshell, the premature nature of even the leading systemic RNAi delivery technology has apparently not stopped Merck from using RNAi Therapeutics in Man and out of the public’s eye:

“Do you have a lead drug candidate that’s been identified and ready for the clinic, or anything demonstrating safety and efficacy in the clinic?

AS: Again, our Phase Ib, IIa clinical trials [of RNAi molecules] biomarker driven studies are for target validation and de-risking. We wouldn’t disclose those, because those are targets that are quickly followed by a small-molecule or biologic. Because the indication might not be consistent with an RNAi therapeutic delivered through intravenous means. No diabetic in the general population, if you’re a Type 2 diabetic on [multiple oral drugs], then IV therapy isn’t going to work.”

This also reminds me of some cryptic comments in another interview given almost 2 years ago by a Merck business development person, who has left the company since, to an Indian newspaper:

“On the research front, the company is working towards providing personalized medicine. It has screened over six lakh RNAi, out of which two to three are in clinical trials and 10-20 are candidates for in pre-clinical trials.”

Given that Merck had used SNALP delivery in the past and SNALP has clearly been Merck’s leading systemic RNAi delivery technology, and with the reference to IV administration and metabolic disease, former Protiva shareholders may want to take particular note here. This is because the $12M in contingent payments from the settlement are payable to former Protiva shareholders upon the filing of a SNALP-related IND ($6M) and the dosing of the first patient in such a phase II trial (another $6M). It is quite curious then that Merck would characterize these studies as ‘biomarker-driven’ and to state that they had no intention of ever further developing these ‘drug candidates’.

So when in the next months Merck will be asked by their shareholders whether it bothers them to have forked over $1.1B for what now more and more appears to be worthless Tuschl I IP, and may not even have been rightfully assigned access to it in the first place, the attempt at damage control might go like this: ‘Oh Tuschl I…? We almost forgot about that. And no, we don’t believe that our position has changed significantly since the Max Planck-Whitehead trial because a patent with an 2020 expiration date is of no therapeutic relevance anyway. And if RNAi Therapeutics will ever make it to market, our significant investments will ensure that Merck will be there leading the pack, but we won’t tell you why nor show you (or audiences at scientific conferences for that matter) any data to back it up. Just trust our track record of cunningly making just the right strategic decisions when it comes to RNAi Therapeutics’.

Lost in Translation? Financial Express Report Says Multiple Merck RNAi Therapeutics Candidates in Clinical Development

[Update 23 April, 2008: added "multiple" to the title to emphasize potential clinical candidates in addition to the widely known wet AMD RNAi trial by Merck/Allergan]

This week I escaped from the lab to step into the warm and sunny California spring weather to see what was going on at Stanford’s Biotechnology job fair on the lawn of the Medical School. The first booth that I encountered was that by Sirna Therapeutics, the RNAi Therapeutics subsidiary of Merck. Strangely enough, when I started asking what kind of jobs they were offering, they suggested me to sign a non-disclosure agreement before saying anything more. Go figure, how do you intend to recruit the right people if you can’t properly tell them what jobs you are trying to fill?

I think this is somewhat symptomatic of Merck’s secretive attitude towards their RNAi Therapeutics development efforts. Following the Sirna acquisition, essentially nothing specifically has been disclosed about the stage of their development programs, one for wet AMD already in the clinic and others that were were close to IND filings as of before the Sirna takeover.

A February 7 interview of the Financial Express of India with Sirna Therapeutics’ Bharatt Chowrira, responsible for Merck’s Asian licensing and collaboration activities ex-Japan, could shed astounding light on Merck’s recent RNAi Therapeutics activities and have significant repercussions for the competitive landscape of RNAi Therapeutics.

Not only is it notable that while the interview was predicated on Merck’s general collaboration activities in India, most of Dr. Chowrira’s comments were geared towards RNAi Therapeutics, even more tantalizing, intended or not, was the following section:

“''We are serious about the R&D relationships in Asia in areas such as contract research and clincical trials and will be embracing partnerships,'' he said adding that Merck is building a virtual laboratory by mounting best scientific programs and there is more of external research conducted by partners. The company is searching for partners with a true collaboration mindset and the ability to deliver compounds against novel targets.

On the research front, the company is working towards providing personalized medicine. It has screened over six lakh RNAi, out of which two to three are in clinical trials and 10-20 are candidates for in pre-clinical trials. For starters, RNA interference (RNAi) is a mechanism that inhibits gene expression at the stage of translation or by hindering the transcription of specific genes. RNAi targets include RNA from virus [DH: HCV?] and play a role in regulating development and genome maintenance [DH: cancer?].”

It is known that Allergan is responsible for the development of one Sirna Therapeutics-derived product candidate, but is it really true that Merck has another one or two RNAi Therapeutics programs in the clinic (and 10-20! in pre-clinical studies)? Unlike development-stage biotechs for which making scientific progress public is an essential element in attracting investor interest, Big Pharma often likes to be secretive about their research programs, particularly in areas that here highly competitive.

If true, this would cast events in the past several months going back to Merck’s acquisition of Sirna in a completely different light. Much has been made of the $1.1billion price-tag, particularly as the impression was growing that Merck’s efforts to moving RNAi into the clinic were stalling. However, this equation would change dramatically from a discounted cash flow perspective if they were actually conducting RNAi Therapeutics trials right now in India. As such, Merck could gain valuable early insights into the safety and efficacy of SNALP-RNAi in man, for example by targeting ApoB or PCSK9 and measuring protein levels in the blood early on in phase I. That information could then either be used to progress these drug candidates further or to optimize the formulations. In addition to the competitive advantage, the secretive nature of these studies would also spare them the public humiliation that any failure would bring with it.

As the involvement of Tekmira, Protiva, Roche, Merck, Alnylam, and four as yet undisclosed Big Pharma/biotech companies document, the interest and potential competition for gene targets that can be addressed by SNALP-RNAi could be considerable. Could therefore say a conflict between Merck and Alnylam or one of Alnylam’s partners (e.g. Novartis) for the same gene targets have contributed to the break-up of Alnylam and Merck in the fall of last year? Did the court injunction forbidding Merck to further develop SNALP-based programs force them into the Protiva settlement, because otherwise it would have imperiled their clinical development activities? Does the possibility that Merck may have more than one additional RNAi clinical trial on top of wet AMD ongoing mean that the initial experience was positive so that they could rapidly expand the technology towards targeting multiple genes as is the promise of RNAi?

Maybe everything here is a misunderstanding and the truth was lost in translation, but in any case such a scenario certainly makes for an interesting exercise in game theory.

Update on AAV-based RNAi for Huntington’s Disease: Time to Move on from U6-shRNAs?

Huntington’s disease (HD) is a dominant genetic disease caused by a triplett expansion in one of the two copies of the huntingtin (htt) gene. So far there is no treatment that appropriately addresses this disease. As with other dominant diseases, suppressing the insulting gene copy by RNAi should bring a therapeutic benefit, hopefully even delay its progression. A recent paper from Beverly Davidson’s group in Iowa reports on their latest experience in developing an DNA-directed RNAi Therapeutic for the treatment of Huntington’s disease [HD; Mc Bride et al (2008): PNAS 105:5868).

Previous studies from the Davidson lab showed that AAV-delivered shRNAs were able to knockdown target genes in mouse brains and subsequently improve the behavioral deficits and pathology of polyglutamine-repeat diseases such as Huntington’s. These promising results led to a collaboration with the AAV gene therapy company Targeted Genetics and Sirna Therapeutics (pre-Merck acquisition) with the goal of advancing an AAV-based RNAi Therapeutic for HD into the clinic.

Their prior work on Huntington’s was based on a transgenic mouse model which expressed a human fragment of the huntingtin gene containing a triplet expansion. However, as the shRNAs in those studies were directed specifically against the human htt gene, but left the mice’s own huntingtin gene copies untargeted, the present studies were designed to evaluate the safety of knocking down all the huntingtin gene copies in a mouse. This is important for the development of an RNAi Therapeutic for HD in man since targeting a small RNA towards the highly structured triplet expansion is unlikely to be effective, and since the mutant htt allele is not associated with a common polymorphism in the htt mRNA which would facilitate a discrimination between mutant and wildtype huntingtin. This issue is also of particular concern since the huntingtin gene is considered to be essential during early mammalian development and little is known about its requirement in the adult brain.

For that reason, McBride and coworkers chose a different mouse model where a triplet expansion had been inserted into one of the existing mouse htt alleles which has the added advantage that it also preserves the natural expression pattern of htt.

Encouragingly, a 50-60% knockdown of mouse htt was observed over a period of 4 months without any obvious target-specific side-effects. Transduction of this particular AAV administered to the striatum, a region in the brain particularly affected in HD, was fairly broad and specific for neurons, the cell type critically affected during HD. Given that not every neuron was transduced and that non-neuronal cells may also express some htt, this 50-60% knockdown implies that very efficient knockdown of htt can be achieved in a subset of neurons and (based on previous studies) should be therapeutic and safe. Longer term studies are ongoing.

The unpleasant surprise, however, was that as previously reported by a number of other groups, some of the tested U6-driven shRNAs were toxic. This is likely caused by the very high levels of small hairpin RNAs from the strong U6 promoter which may jam up the endogenous microRNA gene regulation which is harnessed by RNAi. Whether it is just the level of the hairpins or also the specific biogenesis of the shRNAs, which only resemble microRNA precursors, but actually undergo a slightly different biogenesis involving an unusual set of enzymes and RNA structures, is an open question. In any case, to make a long story short, it is probably advisable that future DNA-directed RNAi Therapeutics programs avoid U6-driven shRNAs altogether and instead use other Pol III-driven systems or Pol II promoters. The latter have the added safety advantage as they can be chosen to be tissue specific so as to minimize side-effects in non-target cells. Since efficient RNAi does not require high small RNA levels, vector transduction and long-term expression should in many applications be more important considerations than mere promoter strength.

Whether it is advisable to go ahead with the particular U6-shRNA that was found to be non-toxic and efficient in knockdown, or instead go back and re-design all of the vectors and repeat 2-3 years of pre-clinical studies, must be a tough decision to make, a situation similar to that faced by other RNAi Therapeutics programs currently in development given the steep learning curve the field is still undergoing.

It is maybe for these reasons that Merck’s subsidiary Sirna Therapeutics decided not to continue with this program and fully hand over the commercial rights to Targeted Genetics. In some way, the AAV-RNAi program always stood out as being an awkward fit for Sirna Therapeutics as it seemed at odds with their siRNA modification focus. Maybe at the time there were not that many advanced RNAi Therapeutics programs to chose from so that Dr. Davidson’s studies seemed like an opportunity to fill the early pipeline. Given the unpredictability of early studies and the number of RNAi Therapeutics programs under evaluation, it is best to let pipeline decisions be driven not by history, but by where the science is progressing swiftest. AAV RNAi for HD still has much promise and the path forward fairly obvious, but as many things in drug development it will be a long and arduous one.

The Risk of Rushing RNAi Therapeutics into the Clinic

RNAi has always caught on very fast. It took only nine years for the Nobel Committee to recognize the importance of RNAi in medical biology and award The Prize for its discovery, and only 6 years following the discovery that siRNAs induce RNAi in mammalian cells by Tuschl to become an indispensable tool in the basic and applied studies of human gene function. Equally astounding is the fact that there are now close to 10 RNAi-based therapeutics that have entered the clinic since.

I have extensively described here before why I think RNAi has the potential to be the next great drug development engine, including the prospect of faster development timelines due to straight-forward mechanism of action and platform reproducibility. However, in the wake of Alnylam’s Q3 conference call announcing an insignificant delay in their RSV program, but a more open-ended delay in their liver programs, what I would like to do today is to point out the dangers of rushing RNAi Therapeutics into the clinic mainly borne out of the tension that exists between applying the best and safest science and satisfying investor demand for gushing clinical pipelines.

From the clinical perspective the ultimate danger is obvious: putting trial participants at risk, and disappointing patients’ expectations for a cure of their disease. From the perspective of running an early-stage biotech business that needs to raise money fairly regularly, the issues easily become more complicated. Although I admire the honesty and scientific intent that underlie statements like that by Nastech that one should not expect RNAi Therapeutics from your company until another 15 years, it certainly won’t capture the imagination of Wall Street. The easy way would be therefore to set your bar a little bit lower and signal to your potential investors that you deserve more money since you’ve been able to put so many drugs into the clinic in such a short period of time. A sophisticated biotech investor would know that these companies can be a good investment, although you do not necessarily want to stick it out until the Day of Reckoning comes.

The danger to the field of RNAi Therapeutics is therefore that as some of these rushed candidates come to a stage where they have to prove their safety and efficacy in large-scale clinical trials, a good number of them will fail, essentially because some of the Best Practices were not followed, including addressing cytokine induction issues, off-targeting profiles, RNAi delivery, and pre-clinical safety and efficacy studies that ideally include non-human primates.

Acuity Pharmaceuticals (now part of Opko Health) dazzled everybody when they came out of nowhere and can now claim to have been the first to put an RNAi candidate (for wet AMD) into the clinic. Unless they have changed the composition of their drug since study initiation, Cand5 appears to be an unmodified siRNA injected straight into the eye. This alone makes me wonder whether an optimized compound has been put into the clinic, and I have more confidence in a program run by Allergan and Sirna Therapeutics (Merck) targeting the same pathway for wet AMD, but with a modified siRNA formulation intended for slow release.

SiRNAs that induce cytokine responses may also have a number of additional biological properties, some of them even potentially beneficial for the disease at hand. Gunther Hartmann from Bonn, a scientist with a cytokine angle on oligonucleotide therapeutics, has even proposed at the recent OTS meeting to purposefully combine the immunostimulatory potential of RNAs (isRNA) with siRNA design. Cancer and infectious disease may be good areas to test this concept as isRNAs are thought to help the immune system in fighting related these diseases.

There has been similar discussion whether there would indeed be any harm if an RNAi therapeutic targeting the Hepatitis C Virus (HCV) had some concomitant interferon response. Isn’t interferon (and RNAi) nature’s first answer to viral infections and the mainstay of current HCV treatment regimens anyway? Similar arguments may also apply to RSV.

The fact that Alnylam is now focusing RSV-01 on adult populations makes me therefore wonder whether this was driven at least in part due to concern that the tender infant respiratory system may be more prone to overreact to a potentially immunogenic siRNA molecule than a lung hardened by years of air pollution. This siRNA is probably unmodified as it was this June that the first Alnylam compounds using ISIS modification patents moved into IND-enabling studies. Being unmodified from a pharmacokinetic perspective may not be that bad or even desirable in RSV, as RSV is an acute infection and long drug exposure may therefore have the potential to do more harm than good.

I should emphasise, however, that the early rodent RSV studies that form the basis of Alnylam’s RSV-01 and which have supposedly been replicated by the company, demonstrated sequence-specific antiviral activities. Furthermore, from Alnylam’s presentations one can assume that RSV-01 was carefully screened for cytokine induction in a number of human cell lines and animal models. I should add as well that the slight delay of the RSV experimental infection model studies is not the result of any of these considerations, but more simply reflects the fact that finding volunteers to be infected with a virus that gives you flu-like symptoms and requires you to be locked away from the outside world for a couple of weeks, is not that easy. However, 74 of the 88 subjects, I suppose mostly students, have already been recruited and we should hear top-line data early next year.

Alnylam’s conservative approach to drug development is further demonstrated by their delay of filing INDs for their liver programs, for hypercholesterolemia and liver cancer. While there is no doubt that with current systemic delivery capabilities it is possible to achieve potent gene knockdown in the liver, the safety and dose-response data so far would explain Alnylam’s caution into committing to a particular formulation by year-end as originally guided. Instead, I agree with their assessment that with new chemistries coming online, such as MIT’s lipidoids which formed the basis of the recent microRNA saturation data in Nature, it is wise to keep testing all of to find the formulations that offer the best therapeutic index. It would not be the first time that a drug for treating heart disease would fail in a large-scale trial because of unacceptable side-effects seen in a handful of participants. For what it’s worth and mindful of the business considerations about demonstrating human proof-of-concept of an RNAi Therapeutics with the hypercholesterolemia program, I wonder whether Alnylam should not go first with liver cancer anyway.

Needless to say, this cautious, data-driven approach not only benefits Alnylam the Science, but also Alnylam the Business. The importance of their scientific credibility through publications and conference presentations cannot be underestimated when it comes to their ability to execute on their business development goals, mainly in the form of lucrative license deals and access to enabling technologies. With a cash position of $468M, Alnylam is in a stronger position than ever to focus on the long-term success of the company and its shareholders.



Rosetta Genomics on Track to Bring the First Clinical RNAi-related Product to Market

Almost unnoticed in the microRNA diagnostics space, Rosetta Genomics reported this week that it had completed the pre-validation phase for its first microRNA diagnostic product scheduled to come into the clinic in the first half of next year. It would be exciting to see the first RNAi-related product have a direct clinical impact and, if successful, will fund Rosetta’s microRNA diagnostics and therapeutics programs with minimal shareholder dilution. The microRNA diagnostic is designed to differentiate between squamous and non-squamous lung cancer which is not always possible to tell under the microscope and an area of particular importance now that Genentech’s VEGF-targeting MAb Avastin showed life-threatening side-effects particularly in subjects with squamous cell cancer.

While RNAi Therapeutics has attracted most of the RNAi attention, microRNA-based diagnostics are set to become the first commercial success of RNAi-related products in the clinic. Their differential expression, scalability, and, equally important, potential relative stability advantages compared to protein and larger mRNA biomarkers means that microRNAs have the potential to become the biomarker platform of choice. The (near) future should tell.

Impressions from the 3rd Annual Meeting of the Oligonucleotide Therapeutics Society: Day 1

The 3rd Annual Meeting of the Oligonucleotide Society (OTS) got under way in the stylish Langenbeck-Virchow Auditorium situated in the centre of a culturally vibrant Berlin. The OTS brings together the many disciplines in the rapidly expanding field of oligonucleotide-based drug development, ranging from aptamers, ribozymes, antisense, immunostimulatory nucleic acids to RNAi. Reports from clinical studies of these treatment modalities and oligonucleotide chemistries were at the centre of today’s lecture sessions.

Brett Monia from ISIS Pharmaceuticals chaired the first session and set the stage by reporting that while there are only four approved oligo-based therapies, more than 50 are currently in clinical development. Many of these are designed for cancer applications, but infectious, metabolic, and inflammatory disease applications are emerging as major new focus areas. This may not only be due to considerable unmet medical needs, but also because these may offer better success rates for clinical development. A few talks on cancer therapies with ASOs (antisense oligos) documented the challenges of designing smooth clinical trials for cancer therapies. One problem is the heterogeneity of cancers and matching the gene target with the right cancer. Early trials on a given compound typically involve small patient numbers with a wide spectrum of cancer manifestations. Although safety trials, almost anecdotal evidence of biological activity in a few patients then often guide the design of later phases of clinical development. Clearly, for cancer, there is a need for the development of more reliable biomarkers as early indicators of therapeutic efficacy and for patient stratification, which may be something that Rosetta Genomics’ microRNA diagnostics may be able to facilitate.

Focusing on diseases like viral infection and metabolic disease where efficacy can be routinely evaluated in early stages of clinical development (viral titers, LDL-cholesterol, glucose) should therefore be lower hanging fruits for the next wave of oligonucleotide-based therapeutics. This transformation in the industry is illustrated by ISIS’ new focus on metabolic disease and its out-licensing of the more challenging ASO applications. Rosanne Crooke recounted the clinical experience with 301012, ISIS’ lead compound for the treatment of hypercholesterolemia. As I wrote earlier, one major concern with targeting ApoB100 is the risk of steatosis of the liver due to inhibition of a protein required for the export of triglycerides and which has indeed been observed by a number of groups targeting ApoB100 by RNAi. Possibly motivated by the existence of individuals with null mutations for PCSK9, the new target of choice for hypercholesterolemia, with no evidence for adverse effects due to lack of the LDL-receptor processing protein, a conference participants asked about the existence of ApoB100 knockout mice. Interestingly, no such mice exist, because ApoB100 would have additional roles during development.

Despite reports of steatosis due to knockdown of ApoB100 with RNAi, Sirna Therapeutics is yet another biotech company interested in targeting it for lowering cholesterol. In a talk about siRNA delivery to the liver, Barry Polisky, CSO of Sirna Therapeutics/Merck also noted that in Sirna’s experience, there are genes that can be knocked down extremely well (e.g. ApoB100) and some that are relatively refractory to knockdown by RNAi. Although anecdotal, given the extensive experience of Sirna Therapeutics with screening for effective siRNAs by tiling them across entire genes, and similar findings by Qiagen and others, it will be interesting to determine what makes a gene a good target for RNAi, particularly whether it involves its normal regulation by microRNAs.

Polisky further focused on the need for siRNA modifications to make RNAi therapeutics a reality. Currently, Sirna’s standard siRNA design seems to involve si(R)NAs that lack essentially all 2’OH groups, except for the three 5’ nucleotides of the guide strand, while the passenger strand has 5’ and 3’ modifications that avoid it to be loaded into RiSC to reduce off-targeting. Other speakers and posters also noted that since most nucleotide modifications had been developed with antisense therapies in mind, new modifications may exist for optimal RNAi efficacy, particularly in vivo. Indeed, new synthesis strategies are being developed that will allow this to be tested, such as the 6-membered carbohydrate substitutions of ribose reported by Piet Herdewijn from the University of Leuven, Belgium.

Polisky further characterized siRNA delivery to the liver as efficient, albeit not optimal. Progress is clearly illustrated by the fact that >30% of siRNA formulated into liposomal nanoparticles now end up in the liver with first-pass kinetics with no evidence for toxicity in the 1-9mg/kg range (mostly rodent studies), whereas >99% of unformulated siRNAs are rapidly filtered out by the kidney.

The liver is also the organ where the first microRNA-based therapies are likely to be targeted. Like Regulus and Rosetta, I was amazed, or maybe not, at how many groups are currently working at abrogating miR-122 function for treating either hypercholesterolemia or HCV infection. LNAs, owned by the privately held Danish company Santaris, appear to be a particularly promising oligonucleotide class for achieving potent microRNA down-regulation in vivo. Similarly, antisense strategies based on LNA appear to rival siRNA potency in a number of settings, and it will be interesting to learn more about the toxicologies of these compounds, which would certainly be facilitated if Santaris decided to enable to field by allowing better access to their technology. It also highlights the need for specialized chemistries for therapeutic targeting of microRNAs which in my mind is something that Regulus ought to consider.

With regard to delivery outside the liver following systemic administration, PEI-formulated siRNAs (see recent PolyPlus-Alnylam deal) are now being used successfully by a number of groups for lung delivery. Other interesting delivery data was presented by a Portuguese group in a poster on RNAi in the brain. By non-covalently adding transferrin protein to cationic liposome-siRNA particles, they were able to efficiently target neuronal cells both in vitro and in vivo which, similar to cancer cells (see Calando’s cancer cell targeting with transferrin), are studded with transferrin receptors.

PS: A nuisance to most scientists in the field, immunostimulation by oligonucleotides is exploited by Dynavax as an adjuvant for vaccines. Poor adjuvants activity lead to insufficient immune responses and the need for multiple booster injections affecting compliance. HBV vaccination is a case in point, and as a consequence around 50% of patients in the US fail to successfully complete vaccination. Very high HBsAg antibody titers after only two injections of recombinant HBsAg with an immunostimulatory oligo from Dynavax as adjuvant, instead of alum, suggests that they may be able to greatly improve on those numbers.

Quo Vadis, Merck?

It is not often that an early-stage biotech company decides to terminate a collaboration agreement with Big Pharma and the investment community cheers it. But this is exactly what happened last week, after a brief bout of confusion, when Alnylam announced the termination of their partnership with Merck & Co. Inc. for the joint development of RNAi therapeutics, citing moves by Merck they deemed incompatible with Alnylam’s dominant IP in RNAi therapeutics.

Merck was an early entrant into the emerging RNAi therapeutics field, and acknowledged Alnylam’s fundamental technology and IP leadership when they signed a broad co-development deal in 2003. It was clear, however, that Merck’s ambition has always been to play a more prominent role in RNAi therapeutics, and has been instrumental in energising the effort through a number of initiatives such as their support for this year’s RNAi Therapeutics meeting in Keystone, an RNAi delivery challenge, and bringing leading bioinformatics to bear on addressing off-targeting through their Rosetta Inpharmatics subsidiary.

One year ago, Merck woke up the investment community by announcing the acquisition of Alnylam’s chief rival, Sirna Therapeutics, for a then whopping $1.1B. Following the millennium technology bubble and stalled progress with developing ribozyme therapeutics, Sirna transformed itself into an RNAi company by leveraging its existing RNA capabilities to rapidly screen many genes with numerous siRNAs and claim them in their patent applications as exclusive RNAi therapeutics targets. Based on this achievement, Sirna Therapeutics promoted itself as the leader in RNAi Therapeutics, although it has always been questionable whether such a brute-force approach would eventually stand up to the novel and non-obvious criteria required of a patent.

So why did Merck end up buying Sirna, not Alnylam which they chose to partner with in the first place? One can almost be certain that Merck approached Alnylam. However, unlike management at Sirna Therapeutics, schooled in the art of turning around flagging businesses and probably a little bit focussed on maximising short-term shareholder value, Alnylam always had full confidence in the strength of their IP position and the prospect for RNAi therapeutics and consequently put in place mechanisms that would make an unsolicited takeover almost impossible

Ironically, the events that followed the Sirna acquisition by Merck further underlined Alnylam’s dominant RNAi therapeutics IP position. It seems odd that for a company that touted itself as the leader, many of its former staff have now left the company, and it appears that except that Sirna’s proprietary development pipeline, except for its AMD program that it had licensed to Allergan, had been completely overhauled.

From Alnylam’s perspective, the advantage of terminating their partnership with Merck appears clear. As an early deal that largely benefited Alnylam in terms of credibility rather than financially, it was far less attractive compared to the more recent deals with Roche and Novartis (up to $120M compared billions in future milestones plus royalties), so that the freed up time, resources, and RNAi therapeutics targets (nine following an amended 2006 agreement in addition to Nogo for spinal cord injury) can now be focussed on more rewarding partnerships and in-house development programs. It also means that Alnylam would not be fostering a Merck increasingly positioning itself as a rival rather than partner by denying them access to their considerable know-how.

It also becomes more and more apparent that Merck is suffering from the consequences of having inherited Sirna’s aggressive business practices. As part of an ongoing dispute with the Canadian biotech company Protiva Biotherapeutics which accused Sirna of having misappropriated trade-secrets relating to liposomal RNAi delivery, a recent court order is likely to have adversely impacted Sirna’s systemic RNAi delivery efforts with potentially further financial liabilities down the road. In Europe, Sirna was also engaged in opposing Alnylam’s Kreutzer-Limmer patents relating to the use of short double-stranded RNAs for gene silencing in mammalian cells, the very same IP to which Merck gained access through their Alnylam collaboration. After the Sirna takeover, however, Merck appears to have made the crucial mistake of continuing to oppose those patents. I suspect, although I am not familiar with the details of the Merck-Alnylam agreement, that this alone should have given Alnylam the right to unilaterally terminate the type of relationship that Alnylam, in the wake of the Alnylam-Roche alliance, repeatedly said it would never pursue again.

To be sure, the value of Sirna may have been higher to Merck than to other pharmaceuticals since Sirna’s technical RNA capabilities should have nicely complemented Merck’s existing RNAi therapeutics development and bioinformatics initiatives. However, given the strength of Alnylam’s patent portfolio, the Tuschl and Kreutzer-Limmer series to name just two, it is difficult to imagine that Merck is really convinced that it has the freedom to bring RNAi therapeutics to market without a license from Alnylam. It will therefore be interesting to follow whether Merck will now pursue a late, but more costly licensing strategy, or whether it will respond to the new situation in unusual ways. In any case, I hope that the new rivalry between Alnylam and Merck will be a friendly albeit competitive one for the benefit of the entire field of RNAi therapeutics.

Mirus Scientists Publish Elegant Paper on Targeted siRNA Delivery to Hepatocytes

The ability to systemically administer siRNAs and functionally modulate gene expression in tissues of interest is considered by many an important step to opening up the therapeutic potential of RNAi to a wide range of diseases. The liver is arguably the best example where intravenously administered siRNAs have already been shown to potently knockdown target genes from mice to non-human primates.

The most promising delivery technologies so far (next to gene therapy vectors such as AAV which I will not discuss here) involve liposomes such as the SNALP particles which were first pioneered by Protiva scientists and subsequently became the subject of intense legal battles involving Protiva, Tekmira, Sirna Therapeutics, and Merck. While facilitating highly efficacious gene knockdown, toxicities such as liver enzyme elevations and non-linear relationships between knockdown and siRNA dosage have been repeatedly reported with these chemistries. While the toxicities were observed at relatively high dose levels, non-linear dose responses complicate the choice of the right dose for entering clinical trials.

One step in the right direction was taken when Daniel Anderson from the MIT reported earlier this year at the Keystone meeting the identification of a slightly different class of compounds which they termed “lipidoids”. Importantly, this class of chemistries appear to efficiently promote RNAi gene knockdown with little if any apparent toxicities and linear dose responses.

The just released paper by Rozema and colleagues from Mirus Bio Corporation (Rozema et al. PNAS Early Edition 24 July 2007: Dynamic PolyConjugates for targeted in vivo delivery of siRNA to hepatocytes) sheds light on some of the issues above and holds out a new paradigm for achieving safe and efficacious therapeutic RNAi knockdown in select cell populations of the liver. Rather than regarding drug delivery to the liver as a passive process given that the bulk of intravenously injected drugs will pass through it with a relatively high chance of entering resident cells there, the present approach involves attaching a simple galactose-derived ligand thereby actively targeting asialoglycoprotein receptors (ASGPr) displayed on hepatocytes.

Knockdown of ApoB100 and microscopic analysis of fluorescently tagged small double-stranded nucleic acids confirmed that hepatocytes were indeed efficiently transfected. Equally important, however, was their observation that Kupffer cells, a major population of macrophages in the liver that are implicated in many cases of drug-related liver toxicities, did not take up the siRNA mimicks, whereas non-ASGPr targeted particles were able to transfect surrounding cells, including Kupffer cells.

Taken together with the SNALP and lipidoid data, this study supports the hypothesis that Kupffer cells may act as a sink for certain siRNA formulations such as SNALPs, thereby not only causing non-linear dose responses, but also an immunogenic response and related toxicities. It also shows that it should be possible to design simple and small siRNA nanoparticles for RNAi delivery from relatively cheap materials. Although lipidoids appear to be a clinically viable technology already, it is comforting to know that alternative routes exist and gratifying to see almost daily improvements being made in the RNAi delivery field.

PS: An interesting aspect of this publication was data the authors obtained on ApoB knockdown. In addition to serving as a target for early proof-of-concept studies for systemic RNAi delivery, ApoB has been a favourite for treating hypercholesterolemia using both antisense and RNAi. ISIS Pharmaceuticals in particular has an anti-ApoB antisense compound in late phase II clinical trials. However, only a month ago, Alnylam reported that in their hands ApoB knockdown led to unacceptably high levels of fat accumulation in the liver (fatty liver phenotype), a finding that was confirmed in the present study. Moreover, both reports indicate that this was a siRNA sequence specific effect and was achieved using two different delivery methods. This physiologic response makes a lot of sense, since ApoB’s main role is in the export of cholesterol and triglycerides from the liver. Failure to export them should accumulate them in the liver.

This is a good example where RNAi can serve both as a target validation tool AND a platform for developing innovative drugs. Consequently, I fully support Alnylam’s decision to target PCSK9 in their hypercholesterolemia program instead, which is a genetically well validated target for reducing LDL-cholesterol and heart disease (see also Blogs from 6 May, 2007: “Preventing Heart Disease with RNAi Therapeutics”, and 9 May, 2007: “ISIS Copies Alnylam’s Heart Disease Strategy“). It is curious then that ISIS maintains and has published the absence of such a phenotype. For the sake of patients and stakeholders in ISIS, I can only hope they are right. The explanation for the apparent discrepancy? I cannot really offer a good one except to speculate on a fortuitous ISIS 301012 antisense off-target effect.

Adding RNAi to the Arsenal in the Fight against Hepatitis C

170 million people worldwide are infected with the Hepatitis C virus. Hep C, an RNA virus, is emerging as a significant public health problem that is only set to grow exponentially as many chronic carriers are about to develop liver cirrhosis and cancer after having been infected for a number of years.

Currently, treatment options for Hep C are essentially limited to a combination of interferon and ribavirin, both antivirals of which the mechanism of action is not completely understood. However, the need for additional treatment options has never been greater. While about 50% of those who adhere to treatment will be “cured” of the virus, many that start therapy do not complete the full treatment regimen due to the sometimes severe side-effect profile and the need for prolonged treatment.

The good news is that there is a whole generation of promising new drugs currently in pre-clinical and clinical development that target the virus directly. The most advanced of these are small molecule inhibitors of the Hep C protease and polymerase, some of which are about to enter phase III clinical trials. Early experience with Vertex Pharmaceutical’s VX-950 e.g. has shown impressive response rates of around 80-90% and reductions in viral loads and is expected to become an important part of future treatment strategies, mostly likely involving combination therapy due to viral resistance. Nevertheless, some of these drugs did not prove efficacious or safe and were discontinued. Morever, those drugs that will get approval will not work in every patient due to variability of the genetic background of the host (=patient) and the virus, and still more treatment options are desirable.

RNAi, through its ability to target the RNA genome of the virus itself, offers a unique opportunity in helping close that gap further. Its unique mechanism of action should contribute to shortening the course of treatment and enhancing response rates. Curiously, Hep C’s cousin, the Hepatitis B virus, was the first virus for which in vivo efficacy of RNAi was demonstrated. This is because of a lack of a good animal model system for Hep C that led a number of groups to target Hep B as a model system for Hep C RNAi treatments as both viruses share the same host tissue and delivery is considered as the main hurdle to achieve treatment success of RNAi. Despite the early promise, corporate actions, however, now seem to have put Hep C RNAi on the backburner.

Before being aquired by Merck, Sirna Therapeutics with the help of Protiva scientists demonstrated promising knockdown of Hep B in mice using the SNALP-siRNA delivery system. They even presented non-human primate Hep C data during corporate presentations and claimed treatment success in a limited number of animals. Progress, however, seems to have stalled as a result of a legal dispute surrounding the SNALP delivery system. Another sorry example is Benitec which had plans to progress a Hep C program, most likely involving a cocktail of DNA-directed shRNAs, to the clinic this year. As funding ran out and the company was forced to move back to Australia, management decided to spin off the Hep C program to a new company, Tacere, which, also short of money, is now struggling to extract any value out of the Hep C program.

It can only be hoped that the potential of RNAi for Hep C is not forgotten. Certainly, qualified academicians, clinicians, RNAi delivery systems, and RNAi targets are all there and waiting. The trick is to bring them together and give them funding to get on with what they are best at.

RNAi Therapeutics Companies

There are a few dozen companies now, small and large alike, that have started developing drugs based on RNAi. While most of them are in the pre-clinical stages, in 2004 Acuity Pharmaceuticals (soon to be known as Opko) was the first to start phase I trials for age-related macular degeneration (AMD). Since then 5 more programs have entered the clinic: 2 additional ones for AMD (Sirna Therapeutics, acquired by Merck in 2006 for the handsome sum of $1.1 billion; and Quark Biotech), and one each in RSV (Alnylam Pharmaceuticals), diabetic macular edema (Acuity), and acute kidney injury (Quark Biotech).

Due to reasons discussed in the previous post, almost all of these programs are Direct RNAi programs, i.e. the siRNA is administered close to the diseased site. All except for Acuity's program are also with siRNAs that have been chemically modified (to enhance stability etc), and it remains to be seen whether Acuity's strategy to plunge into the clinic first was a wise one. Sirna Therapeutics soon followed suit, but I think took the right decision to invest time to carefully think about how to position their potential product in the more and more crowded AMD market. Sirna Therapeutics was also the first public company based on RNAi. Formerly known as Ribozyme Pharmaceuticals, they leveraged their experience with RNAs to build an operation that had all the tools to to build a decent IP portfolio and quickly enter the clinic. This IP portfolio is mostly based on chemistry and targeting many genes one by one such that it could claim exclusivity for targeting those genes with RNAi. It remains to be seen, however, how this brute force approach will hold up in the patent courts. Also, ISIS pharmaceuticals may contest some of their chemistry claims. However, the strategy has paid off extremely well at least for those that engineered it with Merck's takeover of the company last year for about 50x the price it had been valued before it committed to RNAi. SR Pharma, known as of today as "Silence Therapeutics", of the UK, looks as if it was seting itself up for a similar sale with an almost 8-fold price appreciation since last year.

The brightest star in the sky of RNAi Therapeutics by far, however, is Alnylam Pharmaceuticals. This is the company whose scientific founders were seminal in the development of RNAi and microRNAs, particularly in humans. Consequently, the company sits on an unparalled exclusive IP portfolio that gives them freedom to operate and pursue highly lucrative deals with Big Pharma and Biotech. These deals should help it through the development phase and have brought in already well over $100M. All this is managed by a seasoned team, led by CEO John Maraganore, that has considerable experience in developing succesful biotech companies (many of them hail from Biogen). It is also the company mentioned by the Karolinska Institute in their explanation for the 2006 Nobel Prize Award to Fire and Mello, as having demonstrated the therapeutic potential of RNAi through ground-breaking studies. These studies represent important de-risking events that continue to attract academic and indrustrial collaborators and important investments, including the RNAi Therapeutics field as a whole.

Other notable companies involved in RNAi Therapeutics include Benitec, a pure-play Australian company that uses DNA-based RNAi vectors to tackle a range of viral diseases, Nastech Pharmaceuticals (not a pure-play; focuses on siRNA delivery and Dicer-substrate technology), and large pharmaceuticals such as Merck, Novartis, GSK, and Pfizer, and probably many more knocking on the doors of Alnylam and co.