RNA Revolutionaries - Pharmaceutical Executive


RNA Revolutionaries
Could gene silencing be the next great innovation in drug development? Led by Alnylam, Isis, and Regulus, a bold bunch of biotechs are betting on it

Pharmaceutical Executive

Alnylam's and Sirna's Quick Billions

Big Pharma and academia rushed to exploit RNAi's research prowess to accelerate discovery and validation of new drugs, while biotech rushed to place bets on its promise of breakthrough medicines. The first startup, Boston-based Alnylam, had access to co-founder Tuschl's intellectual property, and quickly consolidated its hold on fundamental RNAi patents. Among the large-caps, Novartis, Abbott, and Merck were first to come knocking, forming modest alliances.

Meanwhile, biotechs already working in RNA therapeutics leveraged their patents and expertise. In 2003, a San Francisco-based company that had had little luck turning out ribozyme drugs changed its name to Sirna Therapeutics, and its focus to RNA interference. Loading up on both venture capital and Big Pharma alliances, Sirna was soon nipping at Alnylam's heels.

"At the time, Sirna was a chemistry-based company, while Alnylam's strength was in biology," says New Leaf's Jim Niedel. "In 2003, when we were looking to invest, we chose Sirna because we thought that the issue of delivery would be best addressed by chemical modifications of the RNAi molecule."

In 2005, Novartis made a bold foray by signing a research alliance with Alnylam for more than $50 million in up-front payments (including the purchase of a 20 percent stake in the company), and a total potential deal valued at $700 million—what Alnylam's COO, Barry Greene, called "a game-changing event" for the biotech. "The Novartis deal was a significant turning point," says Barbara Bolten. "It was seen by the rest of the industry as validating Alnylam's approach to RNAi."

With 2006 came even more game-changing events. In August, GlaxoSmithKlein placed major chips on Sirna, signing a $700 million milestone deal to develop respiratory drugs. In October, Mello, then 45, and Fire, then 47, were awarded the Nobel Prize in Medicine for their discovery of RNA interference. Four weeks later, Merck won a bidding war to buy Sirna, ponying up a stunning $1.1 billion.

Sirna's stock value doubled overnight; analysts were doubled over in shock. "I don't think anyone saw it coming," Leerink Swann analyst William Tanner told MSNBC. "Big pharmaceutical companies tend to buy biotechnology companies with nearer term prospects."

More billion-dollar milestone deals have followed, and heavy up-front layouts are increasingly the rule. Last year, Roche signed with Alnylam for $331 million up front, and up to $1 billion in potential milestones to develop RNAi drugs for oncology and liver, respiratory, and metabolic diseases. In July, Takeda offered Alnylam $100 million in cash and more than $1 billion in milestones for drugs for oncology and metabolic disorders. Japan's largest drugmaker also won rights to market future Alnylam products in Asia—excluding the company's most advanced drug candidate, a phase II treatment for lung infections caused by RSV.

The Element of Risk

That the Roche and Takeda blockbuster deals were non-exclusive only confirmed skeptics in their view that the shopping spree said less about RNAi's value than it did about Big Pharma's desperation. Comparing it to the 1990s "genomics frenzy," "In the Pipeline" blogger Derek Lowe took aim at "[every large-cap's] very real fear of being left behind when a rare landscape-altering technology is potentially coming on."

The notion of a Big Pharma frenzy over an over hyped technology leaves RNAi insiders scoffing. "The details of the deals make it very clear that the Big Pharmas have done a careful risk assessment—and they're paying the amount of money that is reasonable," says Dirk Haussecker, a researcher, consultant and blogger at http://rnaitherapeutics.com/ (see "In Love with Interference".)

Exactly how risky is the technology? "The drug development risk essentially comes down to the choice of the right target, not the formulation of RNAi trigger," Haussecker says. While the drug-into-body problem looms, once safe and effective delivery technologies with appropriate pharmacologies have been developed for the various organs and cell types, these can be applied to a whole range of targets. A because the approach uses a cell's innate mechanism, relatively small doses have high potency. Nature made the approach very specific: the siRNA's patterned nucleotides are an exact fit with the target mRNA.

Screening for a potential siRNA to target a specific gene takes a matter of weeks, potentially shaving months or years off conventional drug discovery. And while small-molecule drugs and monoclonal antibodies largely been developed for a limited number of pathways, with many companies competing for the same target, the number of gene targets for RNAi is vast.

The Serious Contenders

The dynamic of the RNAi business today turns on IP—in particular, Alnylam's IP. Some RNAi shops therefore license rights to pursue siRNA drugs, others believe that by coming up with their own version of the RNAi trigger—using longer strands or unique chemical modifications—they may be able to operate independently of Alnylam's IP. However, the record suggests that Big Pharma partners do not necessarily share that view.

Alnylam is the only pure-play shop sporting a "Not for Sale" sign. Despite the soaring prices RNAi deals command, the biggest check the next decade will write is a reality check, and unproductive biotechs will go under. For the rest, survival will depend on partnerships or mergers with Big Pharma—or on striking gold in the clinic.

Here's the A-List of RNAi companies with a clear shot at survival:

Alnylam Pharmaceuticals The self-described RNAi patent gatekeeper is the 800-pound gorilla in this ring. Given the biotech's plans to pursue its own sales and marketing, its development strategy is to focus on diseases treated by specialists. "We're focused on target genes that are approachable from a delivery standpoint, and where the clinical validation is high," says CEO John Maraganore, a veteran of Millennium and Biogen Idec.

Alnylam has three leading drug candidates: ALN-RSV01, for RSV, direct delivery via inhalation, currently in Phase II; ALN-PCS01, targeting the PCSK9 gene for high cholesterol, systemic delivery to the liver via IV injection, pre-IND; and ALN-VSP01, targeting both the VEGF pathway and the KSP protein for liver cancer, pre-IND. "Behind these programs, we're pursuing Huntington's Disease, hepatitis C, PML, and pandemic flu," Maraganore says.

Alnylam has also launched Alnylam Biodefense, a public-private partnership to develop RNAi therapeutics against Ebola virus and other potential threats.

Sirna/Merck Rising out of the ashes of Ribozyme Pharmaceuticals, the San Francisco biotech capitalized on its nucleic acid technology and patents to become the first publicly traded RNAi company. In 2005, eyecare shop Allergan signed a codevelopment deal with Sirna for AGN-211745, targeting the VEGF1R gene for wet AMD via direct injection. In 2006, Glaxo inked its $700 million milestone deal for RSV and other respiratory targets. A few months later, Merck swept the biotech off its feet with its eye-popping $1.1 billion.

Alan Sachs, who took the reins after the acquisition, explains that unlike a hurry-a-product-to-market biotech, Merck has the deep pockets to take the time to "build a sustainable platform with the breadth to create best-in-class RNA molecules by focusing intensely on sequence and chemistry." In the near term, the drug giant is using RNAi as a research tool to speed up new-target discovery and validation—and increase the odds for its small-molecule and biologics pipeline. As former chief at Rosetta Inpharmatics, Sachs lived through the "Gee whiz, genomics!" bubble. "At Merck, we are way beyond the first blush of excitement about RNAi therapeutics and personalized medicine," he says. "We're way deep into actually figuring out how to get there over the next 50 years."

Silence Therapeutics A longtime biotech that moved into target validation, Silence jumped on RNAi with the acquisition of Berlin-based Atugen in 2005. Silence has an extensive and productive partnership with Quark Pharmaceuticals, a California RNAi drug and delivery shop equally new to the game; together they synthesized their own RNAi technology, dubbed AtuRx. This blunt-end siRNA lacks the classic two-nucleotide overhang, and is chemically modified for stability.

The Silence/Quark collaboration has made quick steps in the clinic. Pfizer is codeveloping their Phase IIa AMD agent, targeting the RTP801 gene via direct injection. Their drug for acute renal failure, aiming for the p53 gene via systemic delivery, is in Phase I. In addition, Silence snagged its first big deal last July when AstraZeneca offered $400 million in R&D milestones focused on respiratory diseases.

The biotech is also creating its own oncology pipeline, facilitated by a novel delivery system, AtuPlexa, which targets the endothelial cells lining blood vessels. "Our lead product, Atu027, goes after PKN3, a general cancer target involved in malignant cell growth and metastasis," says Silence CEO Jeffrey Vick, a biotech veteran. Preclinical tests showed that the blunt-end siRNA was active against a range of cancers. "But we saw exciting data against pancreatic and other GI cancers," Vick says. "The plan is to advance it into Phase I."

RXi Pharmaceuticals CytRx, a Los Angeles small-molecule discovery company, spun off its RNAi subsidiary as RXi in March. RXi's sits on some hot IP: long double-stranded RNAs, care of Craig Mello; hairpin siRNA, care of Cold Spring Harbor's Greg Hannon; and miRNA, care of its discoverer, Dartmouth's Victor Ambros.


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