The Wait is Finally Over

For some time now, I’ve been fascinated by how the RNAi Therapeutics sentiment cycle has been progressing in 3-year intervals.  Before I left off for my baby-break, I referred to 2014-17 as The Wait. The Wait was a reference to the ‘market’ having been convinced by early clinical data that RNAi can bring about deep and sustained gene knockdowns in WoMan, but that the ultimate clinical utility and subsequent commercial value remained to be proven.

We are now on the cusp of finding out with results from the registrational phase III study of the TTR-lowering Patisiran in familial amyloidotic polyneuropathy (FAP) imminent.

The wind is clearly in RNAi’s back with supporting developments in the related oligonucleotide therapeutics and, indeed, drug regulatory spaces.  In particular, the successful commercial launches of splice modulators EXONDYS51 (for Duchenne muscular dystrophy) and SPINRAZA (for spinal muscular atrophy) and promising phase III data from the triglyceride-lowering Volanesorsen (gene target: ApoCIII) should have removed the long-held doubt that oligonucleotides can be clinical practice-changing and profitable drugs.  And boy, are EXONDYS51 and SPINRAZA changing the clinical practice of two devastating, previously orphan diseases!

Equally important, drug regulation is strongly moving infavor of patient choice and access.  As a result, we are going to see many more drug candidates benefiting from accelerated approval pathways similar to EXONDYS51.  A number of RNAi Therapeutics programs such as Givosiran by Alnylam (àmetabolite ALA lowering as reasonably predictive endpoint) and DCR-PHXC by Dicerna (àoxalate lowering) are poised to benefit from this development.

But let’s not get ahead of ourselves and await the Patisiran APOLLO study outcome for which sponsor Alnylam has guided a ‘late September/summer’ read-out.  Drug development is full of surprises, so despite all the data* pointing towards a positive outcome, a number of variables (e.g. steroid use, lipid nanoparticle delivery) remain unknown in how they impact overall outcomes.  I for one will breathe a big sigh of relief should Patisiran be able to overcome this Make-or-Break event for RNAi Therapeutics.

 *

à positive open-label extension data from phase II Patisiran;

à positive phase III data from IONS-TTRRx targeting same gene and indication;

à the high roll-over rate into the open-label extension) indicating a positive outcome 

Welcome to 'The Wait'

With Tekmira sliding today 15-20% and the rest of RNAi, and in fact biotech sector, trading weaker by the hour, I will acknowledge the technical damage and view this cementing the end of the RNAi Therapeutics Revival Era (2011-2014).  The new 3-year segment can likely be called ‘The Wait’ as following various human proof-of-concept gene knockdowns, we have accepted that RNAi Therapeutics are real, but still would like to see first products approved to fully declare victory.

RNAi Therapeutics sentiment follows 3-year cycles with striking regularity: it all started with the 2002-5 Geek Phase, one of benign ignorance of the technology, and was followed by the 2005-2008 era of Irrational Exuberance when Big Pharma gave away money regardless of technical obstacles. This then foreshadowed the 2008-2011 era of Doubts and Despair when no matter how good the scientific news, it fell on deaf investor ears.  Finally, we are still all too familiar with the 2011-2014 Revival where those that persisted reaped life-changing rewards.

I was prepared for this sentiment change to occur, but not in so drastic fashion.  Also, that Putin invading the Ukraine, a senator writing a Letter of Ignorance to Gilead, and a new Chairman of the Fed stumbling in her first important speech would get the ball rolling was unexpected.  It would have made more sense for Arrowhead Research to first demonstrate gene knockdown with DPC before assuming the waiting mode.

For investors this means less reliance that the general RNAi Therapeutics sentiment will elevate stocks.  Instead, attention needs to be paid to each company’s clinical trial catalysts.  For companies it means to stay fiscally conservative and focus capital largely on expanding pipelines instead of the technologies at their disposal.  Fortunately, the healthy cash balances of a number of companies (Alnylam, Tekmira, Arrowhead Research, and Dicerna) mean that they can afford to do so and are shielded for the moment from the need to raise capital.  Product-oriented deals such as in HepB are always on the table to supplement the balance sheet.

Novartis revealing today that it has given up on its internal RNAi Therapeutics pipeline development efforts  was both surprising and not.  Not surprising since it is obvious that these tired Big Pharma R&D organizations have even failed just to copy the leading RNAi delivery technologies from pure-play RNAi Therapeutics companies.  With the exception to some degree of Merck, the RNAi work from Big Pharma that has transpired has been nothing short of embarrassing.  Surprising in that one would have thought that Novartis would take their 31 target picks and marry them to delivery technologies from either Tekmira or Arrowhead Research.

The question now is who will get the picks.  Although rapidly deteriorating in value, the picks would give a company leverage over the very Alnylam that licensed them to Novartis.  This is because Novartis enjoyed preferential gene target picking rights.

And finally, full disclosure, I in fact did sell.  Not that it makes any sense scientifically.  I do not, however, want to make the mistake of ignoring the fact that the market has changed and ride it down any further.  I will continue to follow the science and markets here on this blog and hope you will do well in spite of me.   This is a very difficult post, but I know that in the end I will be measured by my ability to forecast.