Alnylam with Dominant RNAi Trigger IP Estate, but Woppmann not that Critical, Really

At a time when we get inundated with various intellectual property claims regarding RNAi triggers, it may seem difficult to tell the wheat from chaff to the degree that investors are now being routinely told that the IP issue is so complex that it is better left to the experts. Nevertheless, because Alnylam’s press release today about the issuance in the US of a patent from the Woppmann patent series supposedly ‘broadly’ covering RNAi Therapeutics has the potential to add to the confusion, I will still attempt to shed some light on the importance of this patent.

This is how the granted claims were summarized in the press release:

1) a double-stranded RNA (dsRNA) of any length having effectiveness in inhibiting a target gene by RNAi;

2) “overhang” and “blunt-end” design features and certain nucleotide pair motifs; and,

3) a 19-28 nucleotide region of the antisense strand that is complementary to the target gene.

It is therefore useful to look up the actually issued claims, and compare....*

At first glance, assertion 1) would appear to cover essentially all types of double-stranded RNAi triggers. The crux of the matter, however, is in the qualifier ‘having effectiveness’. It is true that the granted siRNA structures indeed describe what should make for effective siRNAs. This, however, does not mean that alternative effective siRNA structures are not possible. It is for example quite easy to design around siRNAs of which the first nucleotide of the overhang (which has to be at least 2 nucleotides) has to be a purine (A or G) and has to include at least a ‘GC’ sequence motif. In the case of a 2 nucleotide overhang (the industry standard), this means that any overhang except for ‘GC’ would get around the patent (GC is one out of at least 16 2-nucleotide combinations of which there are many more if one includes non-standard nucleotides). I am not aware that ‘GC’ have any particular advantage (well, at least the patent examiner could be convinced of that), or at least that it would be difficult to find potent siRNAs with non-GC overhangs.

This restriction almost makes it irrelevant to discuss the merit of claim 2 in the press release. But since a similar claim had created similar confusion when the European Woppmann patent issuance was announced two years ago, it is important to point out that fully blunt ended siRNAs are not covered: in addition to having to fulfill the above overhang rules, the Woppmann siRNA would have to have at least one overhang.

The ‘certain nucleotide motifs’ may allude to the requirement that one end of the covered siRNA must contain either a terminal GC base-pair or at least two of those in the last 4 base-pairs. This actually is very similar to the famous Zamore differential end-stability/ strand selection rule, to which Silence may have a claim, and of real scientific value. But again, given the above restrictions, this is more of an academic point.

Alnylam is considered the 800-pound gorilla when it comes to RNAi trigger IP, and rightly so. In fact, most competitors would give an arm and a leg for such a patent that gives broad freedom to design effective siRNAs. It is therefore difficult to understand why the company characterizes the patent in the press release as if it had broad power to exclude, while the actual claims are much more specific than that. By this, it risks to lose the trust of an already wary investor base, quite confused anyway by the barrage of press releases. Worse than that would be if Woppmann would be considered to substitute for the Tuschl patents should the lawsuit not end in Alnylam’s favor. This is not to say that it is any worse than the PR policies of a number of other competing companies in the space. However, to maintain its leadership position in RNAi Therapeutics, it is important to maintaining the credibility of a company that has suffered recently.

Disclaimer: I am not a trained intellectual property expert, and if somebody has concerns about the validity of my interpretation, he/she is free to raise those in the comments section.

*You can do so yourself by going to the following website: http://portal.uspto.gov/external/portal/pair

After you manage to decipher the password, search for patent application ‘10/560,336’. Then go on the ‘Image File Wrapper’ tab and click on the latest document type ‘claims’. This way you will be able to see the claims that should look very closely or identical to what will be issued.

Alnylam and Roche Renew Their Wedding Vows

When Alnylam essentially reminded us today Roche to be still interested in RNAi Therapeutics after having spent close to half a billion dollars on the technology, it caused a lot of anxiety in the RNAi Therapeutics investor community. The impression was that surely something must be wrong when the company chooses to issue such a PR just before it was about to host the company's Q3 09 conference call where everybody expected to get a no-nonsense update on management’s previous guidance, some considered it a promise, for 2 or more major deals by the end of the year. As an investor of Elan Pharmaceuticals, I am all too painfully aware that press releases right before or after conference calls/annual meetings to either soothe or avoid analysts’ wrath, respectively, never bode well.

Almost thankfully, what came then just confirmed that the timelines for the deals have been extended into 2010, rather than news of a clinical trial fiasco which I almost came to expect. ALN-VSP02 continues to enroll which is very good news for SNALP delivery for which I have high hopes for being the next major RNAi Therapeutics value driver, and the TTR program also using SNALP technology is on track for IND filing later this year (although the company does not plan to provide an update at the time of filing). As an armchair analyst, I have to say that this, whether pre-defined in the Roche agreement or not, very much came across as an attempt to deflect disappointment on the changed guidance, and that this was one of the occasions where a PR hurts more than it helps. Overall, I am glad, however, that Alnylam is not going to put itself in an adverse negotiating position, when it financially does not have to, and is going to announce ‘the right partnership at the right time‘. Silence Therapeutics and mdRNA for which we are still waiting to hear on deals e.g. do not share the same luxury.

On the positive side, what I hope today's turn of events signaled is a new emphasis on technology and product development rather than just IP monetization. The repeated mentioning of collaborating on specific disease areas by combining Alnylam’s RNAi platform expertise with Roche’s disease expertise is therefore positive. Also, the fact that the two companies will share access to their respective delivery technologies shows the commitment of Roche for its partner and RNAi Therapeutics. Just how much Alnylam had to pay for this in terms of being restricted of partnering programs at a later stage, however, remains to be seen. Ideally, Alnylam would build such capabilities in-house.

This was followed up in the call with more clarity on Alnylam’s lead program for RSV infection with a potential registration-type trial for RSV infection of lung transplant patients slated to start early next year (ALN-RSV01 now developed without Cubist, but with opt-in) following encouraging phase II data from a small trial earlier this year, and a second-generation, chemically modified ALN-RSV02 to be jointly developed with Cubist for the pediatric population both of which appear reasonable decisions from my perspective. Talk about successful chimp data at microRNA therapeutics spin-off Regulus for the anti-miR122 HCV infection program was also notable.

In a little bit more than two years, Roche has become a very strong force in RNAi Therapeutics rivaling the capabilities of Alnylam, and a company that has shown to have its own mind. It now has dedicated operations in Kulmbach, Germany, which used to represent half of Alnylam’s practical capabilities; Wisconsin, after snatching away Mirus for $125M and which should form a strong basis for their RNAi delivery efforts; and Nutley where it conveniently houses both centers for metabolic and oncology operations, coinciding with the areas where RNAi Therapeutics is poised to create most value near- to midterm, together with work on RNAi Therapeutics. It also had the luxury of exploring mdRNA’s RNAi IP after having paid Alnylam $300M for what appears to be essentially the same, and will be restless on other RNAi Therapeutics business development fronts as well. Importantly, it recently announced plans to move an RNAi Therapeutic candidate into the clinic in 2010.

I believe that it must be extremely challenging to navigate a potentially revolutionary technology for medicine such as RNAi Therapeutics through to fruition and reap the financial rewards along the way. Scientific progress over the last 8 years since the discovery of RNAi in mammals has been more than satisfactory with real drugs based on RNAi Therapeutics conceivable now. Just think back 4 years ago, when 50mg/kg cholesterol-siRNA conjugates in mice were considered the gold standard compared to today’s near microgram/kg SNALP, sometimes also referred to as LNPs; or the steep learning curve about siRNA-triggered immune stimulation, and only Alnylam out of the many contenders has managed to build a financially strong operation. Much of this clearly has to be attributed to management skills and a wise BOD. But shareholders tend to be a restless bunch, always afraid of a stumble that can wipe out all that’s been built and would like to be taken for adults. I believe today’s events leave a certain credibility gap which could be corrected by either removing the poison pill which I believe has served its purpose by now, or insider purchases of the stock. With the share price in the mid-17s, they might actually profit from the situation, too.

Correction (11-05-09): When re-listening to the conference call, I noticed that with respect to the chimp anti-miR122 HCV data Alnylam was not referring to work done by Regulus, but that of others, i.e. almost certainly Santaris/Stanford. After the recent emphasis on additional anti-miR122 patents issued to Regulus, I expect further tension arising as a result of Santaris' scientific leadership in the area, while Regulus appears to have the stronger IP.

Update-1 (11-05-09): February 2010 was mentioned in the conference call as the (presumably Tuschl II) trial date. This, and upcoming SNALP data, could be good reasons why deals have been delayed, in addition to the macroeconomic environment.