Eli Lilly Comes Back for More ADAR Editing

Barely two weeks after GSK took an exclusive license to the ADAR Editing industry’s leading pipeline asset (alpha-1-antitrypsin) and other ADAR targets from Wave Life Sciences, Eli Lilly and ADAR pure-play ProQR announced a major expansion of their RNA Editing partnership from a year ago.

Here, I will lay out what the deal says about the position of RNA Editing within the pharmaceutical industry, the dynamics within the RNA Editing space before going into some specifics of the deal itself.

 

ADAR Editing to exploit exploding genetic insight into disease

The deals were driven by the desire of large pharmaceutical companies to exploit their investments into understanding the genetic basis of disease by matching them with complementary therapeutic modalities. Not only is ADAR Editing as a genetic technology itself an obvious consideration for this challenge, unlike most other modalities which work by inhibiting pathways, ADAR Editing is amenable to gain-of-function and gene upregulation.

Similarly, RNA and genome editing (‘CRISPR’) are unique in their ability to generate protective variants, that is variants thought to protect a person from developing a disease such as cardiovascular disease or Alzheimer’s.

Target modulation versus all-or-nothing forever

Genome editing may have captured our imagination and overshadowed ADAR Editing for most of its existence, but for many applications its mechanism is imperfect or for technical reasons not applicable (yet).

The delivery challenge for large nucleic acids as in genome editing is, however, bigger than for ~30nt oligonucleotides which have emerged as the preferred strategy to mediate ADAR Editing.  It is therefore unsurprising that currently the greatest value of genome editing is in combination with cell therapeutics such as in immune oncology or for hematopoietic stem cell-based strategies where delivery happens ex vivo. For in vivo delivery strategies, liver hepatocytes will be its main target tissue and it is here where most of the competition between ADAR and genome Editing will play out.  

But also where there is such direct competition, there are often good reasons to not pursue a permanent change in the patient's DNA.  For example, permanently burning liver fat in an uncontrolled manner by turning thyroxin hormone receptor-beta into constitutively active versions could be dangerous.  This is where a daily (small molecule) pill or a quarterly administered oligonucleotide therapeutic like RNA Editing would be preferable.

 

In Eli Lilly’s words: ‘“We have been impressed with the progress to date with our partners at ProQR and have conviction that RNA editing can be an important alternative to other more permanent therapies.”

 

For other targets, a biallelic modification may not be tolerated by the cell.  It is for example hotly debated whether huntingtin in Huntington’s Disease should be fully ablated or whether residual huntingtin activity is important for safety reasons.

Short oligo-mediated RNA Editing is the way

It is no coincidence that GSK and Eli Lilly have partnered with the leading ADAR Editing companies that employ short oligonucleotides to both recognize target RNA and recruit endogenous ADARs.  In the earlier days of RNA Editing, a longer editing oligonucleotide expressed from DNA along with ADAR co-expression was predominantly practiced.  However, this approach not only suffers from the challenge of having to deliver larger cargos to target cells, ADAR overexpression is associated with widespread, likely intolerably high off-targeting. 

Clearly, Roche should have known about these fundamental challenges in 2021 when it sealed its collaboration with DNA-directed ADAR player Shape Therapeutics.  Roche must feel the intended approaches it is intending the technology for justify such delivery and would expect the collaboration to focus on reducing the level of off-targeting.

Eli Lilly and ProQR partnership

In September this year, when I got finally convinced to look more into the potential of ADAR RNA Editing, I could not believe how well positioned and cheap ProQR was:

ProQR had stumbled across an oligo-mediated method to achieve targeted RNA Editing about 10 years ago.  At the time I was extremely critical of the company because they pursued a form of mRNA repair (for cystic fibrosis) that in my book as an RNA molecular biologist did not exist.

Predictably, that project failed and I can imagine that failure and resulting skepticism of the technology led the company to explore other methods of repairing mRNA.  They obviously stumbled across ADAR Editing when virtually nobody, except for a few DNA-directed project teams was paying attention.  This means that their IP may be close to having gatekeeper potential for oligo-directed ADAR Editing.  

Another thing that I liked about ProQR during my research was that, unlike its closest competitor, Wave Life Sciences, ProQR is now fully exclusively focusing its cash towards the platform instead of having its budget being overwhelmed by expensive clinical trials on less exciting drug development prospects.

As such I was confident that regardless of the neglect by the public markets, the pharmaceutical industry which has gotten used to the concept of Oligonucleotide Therapeutics would be attracted by the notion of piggybacking on existing oligonucleotide delivery and chemistry progress to open up unique new genetic drug target space with RNA Editing.

So after initially buying access to 5 liver and CNS-related targets for $20M in upfront cash and an equity investment of $30M for a little over $7.5 per share, Eli is paying now $60M in upfront and making a $15M equity investment at $1.6 per share for 5 more targets.  The focus this time has shifted from the liver to central and peripheral nervous system applications, and the protective variant concept was highlighted in the press release.  Lilly now owns approx. 17% of ProQR. 

Each target comes with $250M in potential development and commercialization milestones and given the early stage of the collaboration, royalties from commercial sales are capped at single digit percentages.

Another perk for ProQR is that it may access Eli Lilly oligonucleotide know-how and technology under the collaboration.  Eli Lilly has a rather long history of developing antisense and RNAi molecules.  ProQR values such external input a lot and as such partnership deals had been limited to those companies with a substantial investment in oligonucleotide therapeutics. And that Eli Lilly happens to be the partner again speaks to the apparent success of the ongoing collaboration.

ProQR stated in the conference call that Eli Lilly has an option to gain access to a final 5 targets for $50M and that the companies would be incentivized for this to happen in 2023.

But since the enterprise value (market cap minus cash on hand) of ProQR is barely $50M, why not just attempt to acquire this gem after the 6-month standstill expires this summer?  But before that will be the JP Morgan Conference in January, a biotech dating lovefest where new relationships are formed and deals are born.  Oligonucleotide powerhouses Alnylam and Ionis, or Big Pharma, this time perhaps of the European flavor would be my candidates playing interference with Eli Lilly.

RNA Editing to Generate Protective Variants

Last week, ProQR participated at its first investor conference after a half year hiatus following a failed binary clinical read-out of a antisense splice modulator and corporate re-organisation to solely focus on RNA Editing.

To raise awareness of the company as a serious contender in this exciting field, the CEO detailed the new corporate strategy of growing the company as a major future biotechnology company.  This will be based on foundational IP, know-how and cash-generating partnerships as well as a broad internal pipeline reflecting the numerous ways RNA Editing can bring unique differentiation to addressing disease.  At the EuroTIDES two days later, the company provided scientific data illustrating the types of possible applications.

What caught my attention here is using RNA Editing for generating protective variants.  Protective variants are genetic variants in the human population that make carriers less likely to develop a disease.  PCSK9 and ApoCIII are well known in the cardiovascular field for those and have yielded promising therapeutics as a result.  Protective variants can also be found in other areas such as infectious disease (e.g. CCR5 and HIV) and Alzheimer's.

Not least because the story surprised and intrigued me for its translational potential, I will illustrate protective variant generation using RNA Editing taking PCSK9 as an example. 

 

Mimicking a PCSK9 mutation causing drop in bad cholesterol

With Inclisiran, an RNAi trigger suppressing the expression of PCSK9, RNA Therapeutics have become a commercial reality in cardiovascular disease aimed at very large populations.  A key attraction of this agent is the infrequent, semiannual dosing regimen that clamps down bad LDL cholesterol by ~-50%.

50%, however, somewhat lags the efficacy of the competitive PCSK9 monoclonal antibodies (~-60%) which have to be given at least monthly.  The fact that more robust LDL cholesterol lowering should therefore be possible also for RNA Therapeutics, the race for the most effective PCSK9 in this class is yet to be decided. 

Finding better RNA knockdown agents may be one, certainly attainable strategy, although AstraZeneca has just given up on an RNaseH antisense oligo that had looked promising in that regard.  Using an entirely new mechanism another.

Intriguingly, the sequencing of the PCSK9 gene in an individual with conspicuously low LDL cholesterol in Canadian Quebec province (Mayne et al. 2011) revealed that a Q152H variant in the heterozygous (!) state could lower circulating PCSK9 levels by ~-80% compared to the average, non-related population. This translated to a 60-70% LDLc lowering.  Subsequent cell culture experiments confirmed the causality of this mutation in regulating LDL-receptor levels via PCSK9 expression.  Curiously, while it was initially assumed that the mutation inhibited autocatalytic cleavage of pro-PCSK9, these experiments suggested that such mutant PCSK9s can also inhibit PCSK9 cleavage and subsequent export out of the cells in trans.  This dominant negative effect explains why the mutation in the heterozygous state could have such an outsized effect on serum PCSK9 and LDLc levels.

While other protective PCSK9 variants had been found before, this one was intriguing enough for ProQR to follow up on.  As histidine (H) is unlikely to be unique in messing up PCSK9 processing, ProQR chose QàR editing at the 152 site, possibly because glutamines cannot be converted into histidine via AàI editing, but also possibly because they suspected that the more highly charged arginine (R) residue could be even more impactful.

Impactful it was.  Even at only modest 25% editing (which certainly can, and has to be improved upon for further development), cleaved and secreted PCSK9 in cell culture was reduced by roughly -90%.   

It is important for the RNA Editing space to continue to advertise what the technology can do.  Because RNA Editing is not very useful as a genetic tool for general, academic molecular biology, the onus is on the companies to raise the awareness as some of the best translational ideas may come from scientists and physicians that have yet to hear about the technology.