RXi Pharmaceuticals Could Be Much More Than Skin Wound Healing

RXi Pharmaceuticals today commenced a secondary offering setting it on course to raise ~$10M, enough to finance the company for another year while expanding its pipeline and technology.  It could thus mark a new chapter in the life of this company which had shoe-boxed itself into a single-product (RXI-109 for dermal wound healing) company following a toxic 2012 financing that gave Tang Capital Partners de facto control over the company (pro tip: when you see the likes of Tang or Deerfield getting involved, it usually is not to the benefit of common stock holders). 

The news this morning that the preferred stock overhang (àTang Capital Partners) had finally been cleared, then paved the way towards the financing (amount and pricing to be determined).  

With RXI-109 winding its way through phase II studies, it became clear that RXi had to open itself up to new opportunities enabled by its promising self-delivering RNAi platform.  The financing will initially allow RXi to develop RXI-109 also for ocular (retinal and corneal) scarring-related indications such as wet AMD and cataract surgery.  First eye-related clinical trials with self-delivering RNAi triggers are expected to commence later this year.

The eye is an interesting application of sd-RNAi technology not only for the lucrative eye disease market (both genetic and age-related of considerable unmet medical need), but also because they seem to be able to penetrate throughout the eye (see image) whereas in the skin, distribution currently is limited to areas close to the injection site barring new delivery breakthroughs (patches, creams and the like).  In addition to cholesterol, it may also be interesting to test other ligands such as Vitamin A and E for enhanced uptake into certain ocular cell types.

Lots of unexplored potential

Beyond the skin and eye, self-delivering RNAi strategies hold considerable promise for other tissue targets, both by direct/local and systemic delivery.  In terms of local delivery, I would be highly interested in the biodistribution of intrathecally administered sd-RNAi triggers in non-human primates.  This is because of their long phosphorothioated single-strand overhang and thus similarity to phosphorothioate antisense oligonucleotides which are starting to show amazing results in the clinic for CNS applications (watch out for update on the infant ISIS-SMNRx study by Isis Pharmaceuticals).

In terms of systemic delivery, sd-RNAi chemistry and structure may synergize well with conjugate-RNAi approaches, both in their simple (--> Alnylam GalNAc-type) and more refined form (--> Arrowhead DPC-type).  Even without further modification, RXi-type self-delivering RNAi has shown surprising knockdown efficacy in models of pre-eclampsia as shown by respected UMass scientists Melissa Moore and Anastasia Khvorova (formerly of RXi Pharmaceuticals).  

If RXi can get the backing from serious biotech investors and eventually a new management fit to lead a modern biotechnology company, the current $16M market valuation (for RXI-109 in the clinic for dermal scarring and soon in the eye; self-delivering platform potential; stake in MirImmune) of the company could make it an irresistible investment opportunity.  If management, however, continues to dig in their heels and refuses to listen to outside advice chances are that the financial death spiral will continue. 
   

Suspicious shorting into financing

It used to be common biotech practice that investors-in-the-know were allowed to short into financing resting assured that the offering will allow them to cover at a lower share price.  It is therefore remarkable that in the days and weeks before the financing, the short interest has sky-rocketed from virtually none to around 10% of the float and possibly much more by now due to the delays in reporting short interest.

ASCO for RNAi Therapeutics in Line with Expectations, but Curious Nevertheless (Part II- Atu027)

With some delay, only mirroring the strange delay by the sponsor company, Silence Therapeutics, in disseminating the results, here are my thoughts on the Atu027 phase I results presented at this year's ASCO and some speculations on the potential corporate fate of Silence Therapeutics.  

For part I (ALN-VSP02 ASCO discussion) here.

AtuPLEX Delivery Tech Tolerated Up to Twice Dose Required for Endothelial Knockdown

In retrospect, the phase I Atu027 surprised to the upside, especially in that the relatively ‘unsophisticated’ (some would say simple = elegant) AtuPLEX formulation used was apparently well tolerated in humans at doses well above where we would expect target gene knockdown in endothelial cells, the target cell population of this RNAi delivery technology: the 0.18mg/kg in this study yielded plasma siRNA concentrations where noticeable knockdown was seen in preclinical monkey studies in endothelial cells, and 0.336mg/kg is the recommended dose for further studies.   

I should caution, however, that the PK data are strictly inferring endothelial cell knockdown in the lung (of monkeys) to knockdown in tumor endothelia.  Although the data indicate that AtuPLEX (unlike e.g. DACC for lung endothelia) has a fairly broad target spectrum of endothelia in various tissues, there are some slight differences.  

On the downside, this study in patients with advanced solid tumors failed to provide striking evidence that Atu027 has indeed anti-tumor efficacy.  Although not a primary goal of this dose-finding dose escalation study, with only a paucity of efficacy-related data collected in this trial (in stark contrast to Alnylam’s heroic efforts with ALN-VSP02), it would have been comforting to see more evidence of efficacy besides the two reported regressions of a lung and a liver met plus the ‘stable disease responses’ -which really mean little in the absence of a control group.  The biomarker data were certainly curious, but without disclosing the full dataset could have been as well a cherry-picking exercise.  On this note, I also would have liked for Silence Therapeutics to disclose the full PK dataset.  

Besides for the small patient numbers (33), an explanation for a possible failure to see anti-tumor efficacy could be the choice of target gene, PKN3 (downstream of PI3K), which is a new clinical molecular target in the oncology arena.  On the other hand, I am pleased to see others in the blogosphere point out that the choice of a higher-risk target may be more than compensated for by the differentiation value it brings.  So in this case, you not only have an RNAi mechanism of action, but also the drug target as two major value-adding differentiating factors (see the March of the Lemmings by Bruce Booth).  But if target choice eventually turned out to be a problem here, the Atu027 PK results represent an important de-risking for the AtuPLEX delivery platform.   

Financial worries to the fore 

I’m sure many will be happy that this trial has finally wrapped up (last patient dosing expected later this month).  However, this also means that the focus will now be on a much-feared financing; feared, because the last financings by Silence Therapeutics have been catastrophic to existing shareholders. It is a shame that Silence Therapeutics has failed to obtain any non-dilutive funding despite numerous opportunities.

Along with the disclosure of the ASCO presentation, the company thus announced in an quite unusual move that ‘advanced discussions’ were under way to raise 4-5M UK pounds.  Judging from the previous fund-raisings, this may well double the share count.  Despite such a dilutive capital raise, the terms for which would more likely than not be dictated by the new investors, it would still be preferable over a Marina Bio-style cash crunch.  Actually, from where I sit in my armchair, a combination between the two ‘second-tier’ players Silence Therapeutics and Marina Biotech does not look that illogical as long as can find ways to further cut down on cash burn.  Note that some of Marina Biotech’s important business relationships are with European companies: Debiopharm, Girindus, Novosom tech and IP, usiRNA IP from Denmark etc etc.  

I'll be watching intently as to what the next move will be...