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.

PTC Therapeutics Full-Length Huntingtin-Targeting Pill Comes Up Short, Setting Stage for Exon 1-targeting ddRNAi by UniQure

Today, PTC Therapeutics reported full results from a 52-week trial with PTC518 for Huntington’s Disease.  The data failed to support an intriguing early data cut last year that prompted Novartis to pay $1B for shared US profits and majority rights outside the US.  Unlike the previous n=32 data hinting at dose-dependent full-length huntingtin lowering (up to -43% in the CSF at the high dose) and corresponding improvements in functional outcome measures, the company had to dig deep to find hints of functional efficacy in today’s n=159 dataset.  In other words, an accelerated approval based on the PIVOT-HD trial is now highly unlikely.  Even huntingtin knockdown came down from -43% reported last year to the -20-25% range in the CSF and was not dose dependent.

That Novartis licensed the PCT molecule was surprising to me in the face of overwhelming evidence that protein derived from exon 1 huntingtin mRNA is the toxic molecule and increases in production as the CAG triplett somatically expands during the disease course (see this blog entry).  To me at least it seems that full-length huntingtin has fairly little to do with contributing to the disease.  Indeed, some had started to worry that targeting (full-length) huntingtin may even be harmful based on striatal atrophy caused by an antisense compound by Roche and Ionis (which I and others think can be attributed to the problematic phosphorothioate backbone chemistry of tominersen).  So at least in that sense, comfort can be taken from the PIVOT-HD results that there was no apparent worsening of disease caused by full-length huntingtin-lowering by the PTC518 splice modulator pill.

I can see that taking a once daily oral pill instead of drilling a hole in your skull may be preferable and an enticing prospect for a Big Pharma, but what good is that when the pill aims at the wrong target and will not work?  Of course, UniQure’s AAV-based DNA-directed RNAi therapy capable of targeting exon 1 mRNA will eventually be challenged and complemented by similar, but less invasive exon 1-targeting oligonucleotides or the nascent class of triplett expansion inhibitors, but a lot has to be said about the virtues of a drug that is not only targeted at the right transcript, but also where the exposure is limited to the main affected structure in the CNS.  

So while I understand that PIVOT-HD will cause some disappointment in the Huntington’s community, the data is making much more sense again from a mechanistic point of view following the confusion caused by the earlier data cut.  This should also give regulators further impetus to fast-track AMT-130 towards accelerated approval based on an upcoming 3-year comparison with propensity-matched natural history data.

Time is running out for Benitec

Benitec announced today that almost 1 ½ years after filing an IND for its DNA-directed RNAi HCV candidate, it has now obtained liver biopsy data from first 3 of the 4 patients dosed so far.  Needless to say, the analysis was a resounding success confirming that the right AAV vector coding for the shRNAs against HCV was administered to the trial subjects.

Given that no details were provided on the methods, I assume that the evidence is based on PCR analysis which pretty much picks up almost any activity.

TT-034 also shined on safety with ‘no treatment-related serious adverse effects (SAEs) in any of the four patients dosed’.

To wit, the motivation behind the gene therapy ddRNAi HCV trial is to provide a one-shot cure from HCV infection.  The company, however, said that ‘the amount of shRNA produced will not result in reduction of hepatitis C viral load’.  

So while this statement almost makes it sound like they did not look for antiviral efficacy, but that there might well have been, we can safely assume that they did (standard blood test to look for HCV; plus RNA analysis from biopsies) and failed to see such.  

It is also curious that no results from PCR-based target mRNA cleavage assays were disclosed which, while still PCR, requires a certain amount of RNAi robustness to detect with confidence and would have been used to further tout trial success. 

At this point, Benitec has almost completed the first 2 of 5 planned dose cohorts.  According to my notes, the top dose is about 25x higher than dose group 2.  To get from no change in viral titer to undetectable while increasing dose by 25x seems quite optimistic to me.  And even if this highly unlikely scenario materialized, at this pace, it will be sometime in 2023-4 when it would even be considered for approval.

So please, Benitec, if you cannot see a knockdown at the next higher dose cohort, give it a rest.   

Voyager Therapeutics Sets Out to Fulfill Promise of AAV-directed RNAi Therapeutics (and More)

Finally!  Long overdue (because so obvious and compelling), with the founding of Voyager Therapeutics, the foundations have now been laid for a strong AAV (adeno-associated virus) platform gene therapy company, including DNA-directed RNAi Therapeutics.   Taking advantage of new AAV shuffling approaches to identify novel serotypes (Gao and Kay labs) to more efficiently and specifically target cell types of interest and the world-class expertise in RNAi trigger design of  two of its scientific co-founders (Kay and Zamore labs), the new company will make use of the best available science to realize the potential of AAV and ddRNAi technology for the many diseases of high unmet medical need in the CNS (e.g. Huntington's disease).

With $45M in start-up funding from Third Rock Ventures (the VC that has started the comparable lentiviral-based gene therapy company which recently went public, bluebird bio), they will deepen that expertise through in-house research and thereby sail by Benitec which sadly has refused to face the fact that in order to be a platform company and stay relevant you need to have such efforts.  If not at a time like this when interest is high, then when??  The latest publication by Benitec and Pfizer (Denise et al. 2014) was ironically the best illustration of that omission by showing that the first-generation ddRNAi expression technology of Benitec generates a plethora of small RNAs which obviously is less than ideal.  By contrast, work in the Kay lab in particular (e.g. Gu et al. 2012) has shown how to generate much cleaner expression cassettes.

Voyager strutting its RNAi expertise and related therapeutic development plans is further confirmation of the dramatic decrease in the value of Benitec's once-prominent IP position in ddRNAi (Graham patent).  With an expiration of ~2018-2020 and Baulcombe the real gate-keeper (although the clock on that one is also rapidly running down), I don’t see why there should be a need to take a license except for maybe the likes of Calimmune which may have something close to commercialization by then should things proceed without a hitch.

The start of a company like Voyager is always very exciting and I trust that the scientific founders have the expertise and wisdom to guide it along the way.  It is also a good time to acknowledge the likes of Dirk Grimm (Heidelberg), Shuo Gu (NCI), and most recently Leszek Lisowski (Salk) which I had the privilege of working next to in the Kay lab when they were critically contributing to the technology underlying Voyager.  The pharmaceutical industry and indeed the investor community is wasting a lot of potential by not tapping into the skills of such driven scientists just because they may not labor in one of the biotech hotbeds.

Demystifying ddRNAi Trigger Design

A somewhat vexing problem with DNA-directed RNAi (ddRNAi) has been the heterogeneous mixture of small RNAs generated from a typical expression vector.  Not only will this compromise knockdown efficacy through competition for RISC loading, it also poses a safety risk by increasing the number of off-target genes.  For a long time, heterogeneous ddRNAi trigger processing had been accepted as a way of life- as long as the efficacy was right you would not waste too many thoughts on those multiple bands on your Northern blot.  

Choosing the double-strand length of a ddRNAi trigger has also been more art than science.  Different sizes, usually between 19 and 29bp facilitate potent gene knockdown, but there have been few studies looking at the consequence of size on the uniformity of hairpin processing.   

Next-generation sequencing technology is changing these attitudes.  In a paper that appeared last week in CELL, Gu et al. from the Kay lab in Stanford showed that next-gen sequencing is a powerful tool to detect which small RNA species are generated from a given ddRNAi template plus their relative quantities.  Moreover, through an iterative process of structural change and sequencing, a key structural feature causing the Dicer enzyme make just one predictable cut could be identified.  Without going into much detail, a simple 21 base-pair hairpin yields the purest results.

Commercial ddRNAi trigger landscape getting rusty  

While the clinical validation of SNALP delivery technology has allowed synthetic RNAi trigger-based Tekmira and Alnylam to turn around their fortunes and should also increase general interest in the technology, there seem to be no commercial players left in the ddRNAi Therapeutics arena able to champion and refine the platform. 

Benitec is pre-occupied with trying to monetize IP that is rapidly losing in value due to its age and as a result failing to become a real biotechnology company with a lab.  The two viral delivery companies that once had some ddRNAi ambitions, AMT (AAV) and Oxford Biomedica (lentivirus), either went out of business and/or lack the requisite RNAi molecular biology expertise.  And the other groups developing ddRNAi Therapeutics, including Calimmune and Genables are de facto one-product, disease-focused companies.  This is unfortunate as there should be room for at least one or two ddRNAi Therapeutics platform companies.

Such a company would have expanded on the basic dsRNA concept and would thus have kept its IP estate fresh, eventually forcing others to take a license as simply running out the patent clock would not have been an option.  Such IP would include discoveries like the one made by Gu and colleagues.  On a more positive note, it is possible that the current revival of gene therapy after a decade of neglect and scorn will eventually carry ddRNAi Therapeutics along with it.

Fundamental Baulcombe RNAi Patents Extend Reach

I just got notice of the September issuances of two additional US patents (US 8258285 and US 8263569) belonging to the Baulcombe IP estate.  As previously reported, a first patent (US 8097710) from this series was issued earlier this year and represented a mini-shock to the RNAi Therapeutics IP landscape as it sat smack on the sweet-spot of the prototypical Tuschl-type siRNAs: siRNAs with guide/passenger strands of 20-24 nucleotides in length.  Consequently, Alnylam obtained a non-exclusive license to ‘710 shortly thereafter.

‘569 extends coverage over Dicer-substrate RNAi triggers

The claims of the two newly issued patents extend the coverage of the Baulcombe patent estate in 2 important ways.  Firstly, the ‘569 patent is almost identical to the original ‘710 methods patent.  This time, however, the lengths of the guide/passenger strands can be up to 30 nucleotides in length (20-30 instead of 20-24).  This means that companies working with Dicer-substrates like Dicerna may want to take a license from PBL.  Similarly, the ~25bp dsRNAs previously reported on by RXi and Silence/Intradigm, which curiously did not function as Dicer-substrates, would also fall under this new patent.  The saving grace: like ’710, ‘569 is a methods patent.  Methods patents are often easier to work around.

‘285 is a solid composition-of-matter patent

Having said that, the new ‘285 patent essentially turns the ‘710 20-24nt methods patent into a composition-of-matter one.  There is one important exception though: 20mers have to be unmodified, leaving, de facto (because clinical synthetic RNAi triggers are modified), open important asymmetric designs like the 19/21 and 20/22 designs which have been reported to be even more efficacious in many cases than the classical Tuschl 21/21 design.  Nevertheless, the ‘710 and ‘285 together could pose significant headaches for those trying to find holes with traditional RNAi triggers designs. 

Another interesting question is whether Alnylam will have to seek an additional license to ‘285, as in the press release on the Baulcombe license, only the ‘710 was noted as the subject of the license.  My sense is that ‘285 will be included and that as a result PBL will get a slightly increased participation.

[Update September 17, 2012: in an email, PBL confirmed that the new patents are part of their non-exclusive agreement with Alnylam.]

Classical ddRNAi also impacted?

All 3 patents share claims directed towards DNA-directed RNAi (ddRNAi).  It is therefore possible that they will impact the freedom-to-operate of Benitec which practices short hairpin RNAs from which short RNAs are generated by enzymatic processing in the cell.  Accordingly, an important question will be whether the DNA-directed guide and passenger strands covered by the Baulcombe claims would have to be directly generated by the described vector or can also be provided for in the form of a shRNA-type precursor.  I would guess 'probably', because in the Hamilton et al. work, the small RNAs that were seen and form the basis of the claims were also only indirectly generated. 

In summary, the Baulcombe patents have, quite unexpectedly (because based on plant work), emerged as the strongest RNAi trigger IP estate.  Stronger than Kreutzer-Limmer and stronger than Tuschl I.  In many ways, very deservedly so.  The main limitation is though that they are rapidly ageing.   


Addendum: I reviewed some of the prosecution history of the Baulcombe patents and it seems that for '285 to be granted it had to overcome a 'Crooke' patent (in this case US 6,107,094).  I've always found it a travesty that the Crookes often get cited during RNAi trigger patent prosecutions- although they have no scientific relationship to the biological RNAi process.  It is thus pleasing to see that the Examiner in this case saw the light that a double-stranded RNA that directly inhibits an enzyme (i.e. a PROTEIN) does not represent prior art for a dsRNA that targets an mRNA.  Duh!

Big Agriculture Bankrolling RNAi Therapeutics

After years of pouring millions, if not billions into RNAi-related intellectual property (IP) and the development of double-strand RNA delivery, the RNAi Therapeutics industry is now harvesting returns from an unlikely source: agricultural companies.

Most notably, Alnylam reported yesterday an IP license and collaboration agreement with Monsanto which is widely known for its transgenic seed business.  Particularly eye-catching was the $29.2M in upfront monies, an amount not seen in RNAi Therapeutics for a long time.

However, Alnylam is not the only RNAi company that has been approached by Big Ag.  Admittedly somewhat flying under my radar, Devgenclosed a similarly upfronted RNAi collaboration with Syngenta in May of this year.  Interestingly, that deal came after Devgen’s 4-5 year RNAi partnership with Monsanto had ended in 2011, earning the Belgian (ag) company tens of millions.  This suggests that there is an RNAi scramble in the Ag space reminiscent of what happened in RNAi Therapeutics in 2006-8.  Moreover, Marina Biotech, also in May, exclusively licensed RNAi IP to Monsanto, and Tekmira mentioned in their last two conference calls that it was undertaking evaluative work with a large agricultural company: Monsanto or Syngenta?

The fact that Tekmira is involved in this business development opportunity for RNAi Therapeutics companies suggest that general RNAi IP is only one reason for Big Ag’s approach.

At first, this left me scratching my head: how would you apply double-strand RNA delivery by LNP in a commercially meaningful way in agriculture?  After some research though, it became obvious that Monsanto, Devgen and Syngenta are interested in using orally ingested dsRNA to fight insect pests such as the Western corn rootworm (WCR).  The need of finding new solutions for WCR has dramatically increased as the long-standing transgenic Bacillus thurigiensis toxin-incorporating crop by Monsanto has been plagued by resistance.

Another compelling reason for using non-transgenic approaches in agriculture is the fact that it should speed up the regulatory process as RNA is Generally Regarded as Safe (GRAS) by the FDA. This much reduces the hurdles compared to transgenic plants which might spread in the environment and further express biologically active proteins.  Moreover, unlike a toxin like Bt, the RNAi trigger can be highly specific to the targeted pest species.

The question, of course, is whether this approach, despite its attractions is technically and financially feasible in the first place.  The seminal work by Devgen and Monsanto (Baum et al., Nature Biotech2007) suggests that this is in fact the case: sub-nanogram per cm2 amounts of relatively cheap T7 in vitro transcribed RNA were sufficient to specifically and effectively silence essential genes in the entire body (!!!).  As a result, the growth inhibition caused by the pest was much reduced after ingesting the RNA.  I guess that the delivery work is aimed at even further reducing the required amount of RNA by a log or two.

The mechanism of this amazingly efficient gene silencing is likely the same as the early finding in nematode worms (another group of agriculturally important pests no less) that feeding them with E. coli bacteria expressing dsRNAs can cause potent and long-lasting silencing.  This phenomenon is referred to as ‘systemic RNAi’ and involves RNA amplification.  Although such systemic RNAi is unlikely to operate at the same high efficiency in all pest species, harnessing it in a species like WCR would already be highly commercially lucrative.  Monsanto apparently is close to commercializing such an RNAi-based insectizide.

Transkingdom RNAi and ddRNAi

When thinking about RNAi in plants, DNA-directed RNAi (ddRNAi) usually comes to mind, the type of RNAi where long hairpin RNAs are expressed from a transgene inserted into the host genome.  Certainly, a ddRNAi approach e.g. in corn against the same transgenes is also possible and indeed this has proven to be equally effective when compared to sprayable RNAi in the 2007 Nature Biotech paper.  It should also be added that unlike in your typical protein-expressing transgenic crop, ddRNAi per se does not involve transgenic protein expression, thereby lowering the regulatory hurdles.

When thinking about oral RNAi, especially in light of the RNAi history of feeding dsRNA-expressing bacteria to nematode worms (the first ‘transkingdom RNAi’ example), one may also consider the ‘Transkingdom’ RNAi technology by Marina Biotech (originally from Cequent).  One can speculate that Monsanto’s interest in Marina Biotech is related to this as part of a wider RNAi initiative by the Ag giant. An issue of feeding pests with such bacteria, however, is that again you release transgenic organisms into the wild.  While this may not be so much an environmental or health problem, you know that there are many out there that are religiously against anything ‘GM’, smashed windows and all.

Has Tekmira vs Alnylam been settled?

If we assume that LNP delivery is part of the package in the Alnylam-Monsanto deal and that Monsanto is the Ag company that has been working with Tekmira (until at least just two weeks ago), one can come up with at least three hypotheses for how the deal reflects on the Alnylam-Tekmira litigation:

1)     Tekmira and Alnylam competed, and Alnylam won;

2)     Monsanto will also tap Tekmira to cover all bases;

3)     There is an understanding that Alnylam will use the $30M to settle the lawsuit, and as part of the settlement/M&A, Monsanto will gain access to Tekmira technology.  Announcing the Monsanto deal before settlement is beneficial as it further bolsters Alnylam’s reputation and balance sheet. In that line of reasoning, the Regulus IPO should come SRTL.

The next weeks will tell.

Gradalis Swiftly Moves ddRNAi-Enhanced Cancer Vaccine Candidate through Clinic

I’ve been reminded a number of times by the staunch Benitec-supporters here that Texas-based biotech company Gradalis has been moving a ddRNAi-enhanced cancer vaccine candidate (‘FANG’) aggressively through clinical development. Virtually out of nowhere, Gradalis initiated clinical trials two years ago and there are now two active phase II trials, one in ovarian cancer and one for advanced melanoma. A peer-reviewed publication on the phase I trial was also just published (Senzer et al.) arguably making FANG the lead RNAi candidate in oncology.

The phase I study involved over 40 patients with advanced solid tumors and demonstrated the safety and logistic feasibility of the approach. Although evidence of suggestive of efficacy was presented such as a clear correlation between an immune response and survival, it would be premature to conclude anything with regard to efficacy. Having now followed a number of cancer vaccines, most of which have eventually failed, it seems to me that correlations such as this could be just as well as a reflection of the fact that those with more responsive immune systems will do better anyway.

‘FANG’ comprises of plasmid DNA from which a single RNA polymerase II promoter drives the expression of an upstream GM-CSF open-reading-frame followed by a pair of downstream RNAi hairpins. This plasmid is introduced by electroporation in a petri dish into the patients’ own cancer cells which have been obtained from a tumor resection. After allowing some time for the expression of the transgenes, the cells are irradiated so as to kill off their proliferative potential and are then re-introduced like many other vaccines by intradermal injection.

The GM-CSF component, wildly popular in the cancer vaccine field and also part of Dendreon’s famous prostate cancer vaccine PROVENGE, is supposed to serve as an attractant, proliferation and maturation factor for dendritic cells which are supposed to ingest, present and thereby stimulate an immune response against the antigens unique to a tumor; the pair of ‘bifunctional’ hairpins meanwhile both target furin which is thought to be an important protease for the maturation of the various isoforms of TGF-beta, a well-known immunosuppressant often overexpressed in cancer.

‘Bifunctional’ here means that one hairpin is perfectly matched and therefore mostly relies on the so-called Ago2/cleavage-dependent mode of RISC activation, whereas the other hairpin contains a central bulge due to mismatching changes introduced in the passenger strand arm of the hairpin thus relying on the non-cleavage pathway of RISC activation which can be facilitated by all four human Argonautes (both predicted to yield the identical guide strand). This strategy of distributing the RNAi between the various Argonaute proteins is certainly an interesting idea, but I’m not sure whether even Gradalis knows what consequences of this is both in terms of efficacy and safety.

A general lack of detailed molecular mechanistic studies is probably my biggest concern with this candidate and when thinking about Gradalis in general. It also at least partly explains why FANG has been moving so rapidly through the clinic. I find it particularly troubling that I have seen no detailed studies by Gradalis looking at the relationship between furin knockdown and TGFbeta inhibition which is key for Gradalis' strategy. This already has caused difficulties in interpreting some of the phase I data where possible assay problems complicated reconciling apparently only modest reductions in furin with much more pronounced down-regulations of TGFbeta. This not only makes it more difficult to make the right development decisions, but also when it comes to finding a partner for the program. On the other hand, you could argue that a cancer vaccine candidate involving both GM-CSF expression and TGFbeta inhibition already has a good chance at succeeding, and sweating out the technical details would only cause delays without making us much the wiser.

As I had mentioned, the Benitec supporters are following Gradalis’ development with much interest as such an advanced ddRNAi candidate may be a prime licensing opportunity for Benitec which controls an important part of the ddRNAi patent landscape. I’ve certainly looked at the hairpin structures involved in light of Benitec’s patent claims (esp. the ‘099 Graham patents) and there is a good chance that Gradalis ought to take a license as it further monetizes this candidate, although their structures may give them a bit of wiggle room.

Mirna Therapeutics selects Marina Biotech’s SMARTICLE delivery tech

In another notable development last week, cancer microRNA Therapeutics company Mirna Therapeutics said that it would use Marina Bio’s SMARTICLE liposomal delivery technology for the development of microRNA replacement therapy for cancer. Based on conference presentations, the two companies had been collaborating on the delivery of microRNA mimics before announcing the deal. An attraction of the SMARTICLE delivery technology, which Marina had acquired from Novosom, is certainly the fact that there is already clinical experience after SMARTICLE-enabled ‘DNAi’ compound by ProNAi has begun dosing a year ago. Similar to related agreements between Mirna and Silence, and InteRNA and Silence, insightful details about the financials were not disclosed. For Marina, which have diluted shareholders by what seems like a 100-fold over the last 3 years (unreal, really), it is good news as its extensive technology offering is finally getting takers.

Solid Calimmune DNA-directed RNAi Therapeutics Candidate for HIV Nearing Clinical Development

With the backing of a $20M grant from the California Institute of Regenerative Medicines (CIRM), Calimmune has made progress in advancing a DNA-directed RNAi (ddRNAi) Therapeutics candidate for the treatment of HIV/AIDS towards clinical development in early 2012 (here a recent blurb in the Financial Times). Similar to an HIV candidate developed by City of Hope (CoH) and Benitec before it, the new treatment involves the modification of a patient’s own blood stem cells (hematopoietic stem cells, HSC) with a gene therapy comprising of an expressed small hairpin RNAi trigger. Although Calimmune is not prepared yet to share the details of this program, based on my review of the research conducted by groups associated with Calimmune, the likely candidate has the potential to become one of the most exciting ddRNAi Therapeutics product candidates to enter the clinic yet.

HIV therapy today and motivation for gene-based stem cell therapies

The treatment of HIV has made tremendous progress. Once a certain death sentence, for those with access it has instead largely become a chronic infection that can be kept in check with cocktails of small molecules targeting a variety of stages in the viral life-cycle (highly active antiretroviral therapies or hAART). Nevertheless, the need for taking daily pills for life comes at the cost of side effects, generally reduced quality of life, and the emergence of viral resistances. There is no cure yet for HIVAIDS.

Actually, there might be one example of a cure for HIV. In 2006, an AIDS leukemia patient, aka the Berlin patient, underwent a bone marrow transplant as a treatment for his leukemia. The doctors selected a bone marrow donor whose cells carried defects in the CCR5 gene on both chromosomes. After the transplantation, the patient was not immediately put back on antiretroviral therapy to allow for recovery of his new hematopoietic system. Surprisingly, despite the absence of drug treatment, the virus has not recurred to this day leading more and more experts to talk of the first functional cure of HIV/AIDS.

In hindsight, this result did not come totally as a surprise. CCR5 had been known to be an important entry receptor for the common CCR5-tropic HIV isolates. Epidemiologic evidence gathered in the mid 90s indicated that people with certain CCR5 deletions on both chromosomes were protected from HIV infection, and those with a CCR5 defect on only one chromosome had, on average, delayed disease progression and improved life expectancies. In fact, this research led to the development and recent approval of a class of drugs blocking the CCR5 protein (e.g. Maraviroc by Pfizer).

There remains, however, great interest in developing gene-based stem cell medicines against CCR5 (and other HIV viral and host targets) in the hope of generating HIV medicines with less side effects, reduced chance of viral resistance (one way of HIV resistance to drugs targeting the CCR5 protein is to bind to CCR5 in the presence of drug), and maybe even a cure. The Berlin patient indicates that CCR5 may be an ideal target for such gene-based stem cell therapies.

Two possible mechanisms by which such a strategy may succeed are based on eradication of HIV-permissive cells as they are killed off by the virus while the CCR5-impaired cells persist, or by improving the immune function of CCR5-impaired cells thereby allowing them to fight HIV infection in other places.

City of Hope/Benitec and the first DNA-directed RNAi Therapeutic for HIV

Calimmune’s ddRNAi candidate is not the first one for HIV. The City of Hope, with the financial backing of Benitec, already entered one into clinical development (rHIV-shl-TAR-CCR5RZ), results from which were reported last year in Science Translational Medicine. Recognizing the advantages, if not need, for targeting multiple stages of the HIV life-cycle at once, this candidate was not a pure ddRNAi therapeutics, but a triple RNA therapeutic that in addition to the shRNA RNAi trigger which targeted the viral tat/rev mRNA involved an expressed TAR RNA decoy and an expressed (RNA) ribozyme targeting CCR5. Notably, all three expression cassettes were driven by U6 promoters.

The expression cassettes were placed in a shared lentiviral vector and thus introduced ex vivo, i.e. outside the body, into hematopoietic stem cells isolated from the enrolled AIDS lymphoma patients. Because hematopoietic stem cell transplantation with full bone marrow ablation is associated with risks, but is standard second-line therapy for AIDS-related lymphoma, this patient population was chosen so that the trial participants would simultaneously receive a treatment benefit for their lymphoma while participating in this experimental trial. As an added measure of precaution, the majority of hematopoietic stem cells were left untreated and given together with the modified stem cells to ensure that the immune system would be reconstituted even if something went wrong with the gene therapy.

Four patients were treated per protocol in the phase I trial. Unfortunately, while there was no obvious significant adverse event as a result of the gene therapy, the molecular analyses indicated that rHIV-shl-TAR-CCR5RZ may not be the most promising RNA therapeutics candidate for HIV. Specifically, while the initial transduction efficiency was in line with what would have been expected for lentiviral delivery (~20%, see X-linked adrenoleukodystrophy trial here), the transduced cell population declined rapidly and the ones that persisted were just about detectable- too few to be therapeutically promising.

If this candidate were to be further developed, an important goal would be to increase the fraction of stem cells that are modified. This could either be by improving the transduction efficiency, by only providing stem cells that were treated with lentivirus instead of providing the untreated stem cells as a backup, or by using a protocol that chemically selects for the modified stem cells after their re-infusion. Still, I am skeptical that this would solve the problem as in light of other lentiviral and retroviral clinical experiences the observed decline in transduced cells seemed to be specific to rHIV-shl-TAR-CCR5RZ. It is therefore possible that some inherent toxicity of the expression cassette itself, possibly due to the use of U6 promoters, accounted for the poor long-term persistence of modified stem cells.

The Calimmune approach: A non-toxic, H1-driven shRNA targeting CCR5

The reason why I feel that Calimmune’s approach may have better prospects is that it has fully accounted for the U6-related shRNA toxicities and selected an H1 promoter-based RNAi expression cassette that was shown to be both safe/stable and, equally important, highly efficient in CCR5 knockdown in human and rhesus HSC-derived cells. Also, I like the fact that it is an RNAi trigger, and not a ribozyme, that is targeting CCR5, as I believe this to be the more efficient knockdown modality.

While Calimmune has yet to fully disclose their eventual clinical candidate, the one reservation that I have about the putative candidate at this time is that they may have failed to take advantage of the combinatorial potential of RNAi Therapeutics. With combinatorial potential I do not necessarily mean here combining ddRNAi with other RNA (like CoH/Benitec) or protein expression modalities- in fact, it may be scientifically 'cleaner' to use just RNAi for now- but targeting at least two HIV-related genes instead of one to minimize the emergence of viral resistance.

The panels on the left depict what in my mind have been the most impressive dataset from the development program. It shows the results from a rhesus monkey model in which the ddRNAi trigger was introduced into blood stem cells from two monkeys (RQ3570 and RQ5427 for those with good eyes) which (panel A) led to solid, long-term (!) 6-20% cell marking in the various cell lineages of the blood. Moreover, when the cells were sorted into those that were transduced (black bars, panel B) versus those that were not (grey bars, panel B) and the CCR5 levels measured in the respective cell populations, the CCR5 was found to be down-regulated by 80-90% in the transduced cells. And since your experiment is only as good as your negative controls, data from a control animal that received a lentivirus without the RNAi trigger (2RC003) show no differences in CCR5 levels between the two cell populations.

While I have yet to see the obligatory HIV in vivo challenge studies with this putative candidate, based on CCR5 genetics, a candidate with such transduction levels and knockdown potencies should stand a good chance at improving CD4+ T-cell counts for enhanced immune system vigor and delaying or maybe even eradicating HIV over time.

It is debatable to what degree a full CCR5 knockout compared to a highly potent CCR5 knockdown would bring additional benefits. Sangamo Biosciences for example has made tremendous progress in increasing the efficiency of gene disruption using their Zinc Finger Nuclease technology. Not surprisingly, this company also has a CCR5 hematopoietic stem cell candidate in the early pipeline. In a 2010 Nature Biotechnology paper, Sangamo reported an estimated frequency of 5-7% homozygous CCR5 gene disruption in human hematopoietic stem cells, and another 10% heterozygous gene disruptions.

Simplistically, taking upper estimates, ddRNAi may provide for 90% CCR5 knockdown in 20% of cells whereas ZFN technology may delete CCR5 altogether in 7% of cells and knockdown CCR5 by half in another 10%. Because these numbers are close and a clean knockout in some cells may make up for the slightly decreased overall knockdown levels, I would be even more excited to see Calimmune's current lead candidate paired with at least another shRNAi trigger, thereby exploiting said combinatorial potential of ddRNAi Therapeutics which ZFNs cannot provide as easily.

Benitec license?

Benitec, of course, will follow Calimmune’s developments with great interest as the company has rights to critical ddRNAi trigger patents. Curiously, both companies are based in Australia, but have significant roots also in the US South-West, so it should be possible to come to an amicable agreement.

License or not, it will be good for the entire field of RNAi Therapeutics, and ddRNAi Therapeutics in particular, for this trial to get underway in 2012 as it should attract significant general interest to a what looks like a solid RNAi Therapeutics candidate.

Acknowledgement: The idea for this blog came from a reader that alerted me to this interesting RNAi Therapeutics candidate that had flown below my radar, and maybe also to placate another reader that complained that the Tekmira-Alnylam feud was taking up too much space and there were other interesting things happening, especially in ddRNAi Therapeutics. So if you know of exciting RNAi Therapeutics developments that you believe I may be missing, please let me know by email (first name dot last name at gmail dot com). In most cases, I won’t be able to write about it immediately, but it won’t be forgotten either.

Update: On March 5, 2012, Calimmune acquired a global, non-exclusive license from Benitec to use ddRNAi in HIV/AIDS.

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

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

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

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

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

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

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

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

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

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.

What’s the Problem with DNA-directed RNAi?

I apologise for having been somewhat quiet recently on the blog. It is not that I lost my belief in RNAi Therapeutics, quite the opposite actually. RNAi has already been shown in hundreds of research labs to be a gift of biology (or God, as one famous biologist, whom I shall leave here anonymous, once noted), and it is now up to many of us individuals and organisations to carefully uncover its therapeutic potential.

One area where progress has been slow is DNA-directed RNAi (ddRNAi). Except for Nucleonics’ Hepatitis B Virus RNAi program, all other clinical studies currently make use of synthetic small interfering RNAs (siRNAs) for therapeutic gene knockdown. While I agree that siRNAs have many advantages over ddRNAi for many applications applications, ddRNAi may be in principle superior to siRNAs e.g. where durable gene knockdown is desirable or where viral delivery methods may get to more efficiently than formulated siRNAs. One can agree that it is an interesting concept to immunise the immune system against HIV by giving the patient stem cells that generate T-cells expressing shRNAs directed against HIV (actually such a trial is imminent at the City of Hope). Why has progress been so slow? ddRNAi-based companies have had great difficulties in attracting funding. Benitec, arguably one of the early contenders to be the darling of ddRNAi, eventually ran out of money, had to cut down most of their development programs and went back to Australia to wait for something good to happen. Instead of focusing on research and investor relations, money was spent on lawyers in early patent battles about rights to ddRNAi. It is interesting that while patent issues are being talked about in the siRNA space, full-blown legal battles about the core siRNA patents have been the exception. It is expected that these will be sorted out at later stages through cross-licensing and royalty agreements, closer to the approval of the first siRNA-based drugs. Makes sense. Another problem is that ddRNAi carries the stigma of being a traditional gene therapy with all the historical ballast of immunogenicity and cancer through insertional mutagenesis.

So how could ddRNAi stage a comeback? One way might be to consolidate the IP in one company and remodel it as a champion of ddRNAi, similar to what Alnylam is for siRNA Therapeutics. This would make investors feel confident that their company has the freedom to operate and attract funding and clinical support through collaborations. This also requires credible management that has access to key decision makers in big biopharmaceutical companies. Failure to do so would not only put the technology at risk of ever being fully developed, but also rob patients of important treatment options.

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

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

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

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

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