Arrowhead Research Corp.'s pick-up of the entire RNAi portfolio of Novartis AG earlier this month, including rights to a host of intellectual property (IP) and assets – among them, an existing license agreement with RNAi powerhouse Alnylam Pharmaceuticals Inc. – all but closed the door to big pharma's decade-long experiment in RNAi-based drugs.

On average, 11 RNAi-based deals closed in each of the years between 2007 and 2011, according to Vinay Singh, senior deals analyst at Thomson Reuters Recap. That average swooned, to four deals per year, in the ensuing four years.

Deal size also plummeted, from an average of $1.1 billion annually in the 2007 to 2011 time period to just $260 million annually in 2012 through year-to-date 2015, according to Singh.

The "lull in the deal-making landscape" affected oligonucleotides, in general, and RNAi-based assets, in particular, he said.

"If we look at specific deals, a lot of the activity is related to big pharma stepping away from the RNAi space," he told BioWorld Insight, calling the deal between Arrowhead, of Pasadena, Calif., and Basel, Switzerland-based Novartis "a perfect example" of the trend.

In the mid-2000s, nearly every big pharma had an RNAi play, but those assets largely have been ceded to biotech, according to Singh – an observation confirmed by Cortellis Competitive Intelligence (CI). Over the past decade, Roche AG, of Basel, Switzerland, exited or abandoned eight programs, Merck & Co. Inc., of Whitehouse Station, N.J., dumped 10, London-based Glaxosmithkline plc (GSK) and New York-based Pfizer Inc. each discontinued four, Johnson & Johnson, of New Brunswick, N.J., suspended three and Novartis exited two.

That's not to suggest the RNAi pipeline is dry. Cortellis CI cites more than 275 RNAi-based drugs in development – the lion's share still in discovery – with small biotechs accounting for roughly 85 percent of those assets. The Novartis-Arrowhead deal was a great illustration of the advantages biotechs have over pharmas in conducting early stage R&D, according to Chris Anzalone, Arrowhead's president and CEO.

"A small biotech is able to focus its entire aim on a single platform or set of technologies," Anzalone told BioWorld Insight. "Big pharma can't do that. There's something magical that happens with that sort of focus. It enables you to break through walls and to move very quickly."

And big pharma is not altogether absent. Roche, GSK and Astrazeneca plc, of London, are among those with active partnered programs, according to Cortellis CI. But Sanofi SA, of Paris, is the biggest pharma still "invested in the space," Singh said, through deals with Cambridge, Mass.-based Alnylam to develop its lead RNAi program, patisiran, and with Regulus Therapeutics Inc., of La Jolla, Calif.

PHARMA IS NOW LOOKING FOR PRODUCTS'

Persistent challenges in overcoming barriers to formulation and delivery, for the most part, drove pharma from the space.

"History tells us that pharma has not been particularly successful in transforming early stage technologies into a clinical stage approach," observed Alnylam CEO John Maraganore. While biotechs moved forward with RNAi discoveries, pharma was reluctant to make the up-front investment and take the development risk needed to address the delivery shortcomings.

"They failed miserably at the technology," Maraganore maintained, noting that erstwhile partner Merck, from which it acquired one-time rival Sirna Therapeutics Inc., would be the first to admit its drubbing in the space. (See BioWorld Today, Nov. 1, 2006, and Jan. 14, 2014.)

"Pharma is now looking for products," he added. "That's where they want to participate in this technology."

"Big pharma is seeking quicker returns," Singh agreed. "They haven't seen tangible results yet. But we've seen other companies step up and stamp their place."

Singh characterized Alnylam as the "breadwinner" in RNAi. The company is the unquestioned leader in terms of assets in development – 10 in the clinic and another 15 in discovery, according to Cortellis CI. Alnylam expects readouts from five programs in 2015, including data on hard clinical endpoints that go "beyond knockdown of disease genes" and set the company up for "an exciting year," Maraganore said.

Key findings include 12-month clinical endpoint data from the phase II open-label extension study of patisiran in familial amyloid polyneuropathy, or FAP, at next month's annual meeting of the American Academy of Neurology and six-month clinical endpoint data on revusiran in transthyretin-mediated familial amyloidotic cardiomyopathy, or FAC, by year-end. (See BioWorld Today, Oct. 14, 2014, and Dec. 15, 2014.)

According to Maraganore, Alnylam also plans to report data on ALN-AT3 in hemophilia, ALN-CC5 in complement component C5 and ALN-PCS – partnered with The Medicines Co., of Parsippany, N.J. – in proprotein convertase subtilisin/kexin type 9, or PCSK9. (See BioWorld Today, Feb. 5, 2015.)

One of Alnylam's strategic partners, Tekmira Pharmaceuticals Corp., is increasingly active in RNAi in its own right. In 2012, the companies amicably resolved a licensing dispute, with Alnylam retaining full rights to use and sublicense certain intellectual property, including the lipid nanoparticle, or LNP, delivery technology important for its RNAi work, while patents related to the lipid MC3 were assigned to Tekmira. (See BioWorld Today, Nov. 14, 2012.)

Tekmira's hepatitis B virus (HBV) program, TKM-HBV, designed to eliminate HBV surface antigen expression, began enrolling a phase I study in January. The same month, the company agreed to merge with privately held Oncore Biopharma Inc., expanding its HBV pipeline to eight candidates. (See BioWorld Today, Jan. 13, 2015.)

The Vancouver, British Columbia-based company also has an RNAi-based antiviral, TKM-Ebola-Guinea, and a PLK1 gene modulator, TKM-PLK1, targeting hepatocellular carcinoma, in phase II development. (See BioWorld Today, Oct. 8, 2014.)

Just last week, Tekmira reported preclinical data at the Keystone Symposia Conference on Liver Metabolism and Nonalcoholic Fatty Liver Diseases in Whistler, British Columbia, on an early stage RNAi asset, TKM-HTG. The findings suggested super-additive effects on plasma triglycerides by silencing the apolipoprotein C3 and angiopoietin-like 3 genes, expressed in the liver, in a validated model of hypertriglyceridemia. TKM-HTG is being developed as a multi-component RNAi therapeutic that simultaneously targets a combination of genes expressed in the liver, known to play a role in triglyceride metabolism.

RNAi A 'TRANSFORMATIONAL TOOL'

Sirnaomics Inc., which is headquartered in Gaithersburg, Md., with operations in Suzhou and Guangzhou, China, also has a strong discovery pipeline that includes a dozen short interfering (siRNA) agents. STP705, which inhibits the PTGS2 and TGFB1 genes, is the first siRNA therapy submitted in China under the innovative drug classification referred to as 1.1, targeting the treatment of hypertrophic skin scars. (See BioWorld Today, Jan. 20, 2015.)

Dicerna Pharmaceuticals Inc. is another whose pipeline remains, for the most part, in discovery or preclinical development. However, the Watertown, Mass.-based company, which had no trouble raising private equity before handily completing its IPO last year, has moved its lead program into a phase Ib/II study. DCR-MYC, an RNAi therapeutic targeting the MYC oncogene, is being evaluated in patients with advanced hepatocellular carcinoma. (See BioWorld Today, Jan. 31, 2014.)

Dicerna perked up the RNAi space in 2010 when it inked what was then the richest deal in RNAi with Tokyo-based Kyowa Hakko Kirin Co. Ltd. (KHK) to discover, develop and commercialize drug delivery systems and siRNA-based oncology therapies using Dicerna's Dicer Substrate Technology. As part of deal, which has a potential payout of more than $1.4 billion, KHK is responsible for global development of a product candidate targeting the oncogene KRAS, which is frequently mutated in numerous major cancers, including non-small cell lung, colorectal and pancreatic cancer. (See BioWorld Today, Jan. 5, 2010.)

Arrowhead's deal with Novartis provided the company with significant momentum in RNAi – a space it entered in 2012 through a licensing deal with Alnylam for IP related to HBV that eventually would become ARC-520, now in phase II development. The Novartis arrangement, which Arrowhead sewed up for just $35 million plus milestones, gives the company three preclinical assets and an expanded patent estate. (See BioWorld Today, May 7, 2013, and March 6, 2015.)

"We've thought for some time that RNAi is a transformational tool for a multitude of diseases, because it's so hyper-specific," Anzalone said. "The idea of knocking down a single target in a cell type is really stunning."

Although delivery issues have held the technology back, "I think we're just entering the golden age of RNAi, where companies are starting to overcome the delivery challenges," he added. "We'll start to see not just good science but good medicines."

SCORES OF CANDIDATES IN DISCOVERY

A number of other biotechs also have multiple RNAi plays. At Regulus, of La Jolla, Calif., RG-101 is leading the drumbeat. The GalNac-conjugated anti-microRNA (miRNA) therapy targets miRNA-122 to treat hepatitis C virus as monotherapy. The La Jolla, Calif.-based company, whose potential $750 million deal with Sanofi is aimed at discovering miRNA-based drugs in fibrosis, last month reported promising phase I data with its lead candidate. Regulus also has miRNA deals with Astrazeneca and Cambridge, Mass.-based Biogen Idec Inc. (See BioWorld Today, June 23, 2010, Aug. 16, 2012, and Feb. 10, 2015.)

Privately held Quark Pharmaceuticals Inc. stands to bank $680 million, including $10 million up front, under a 2010 deal granting Novartis an option for an exclusive worldwide license to develop and commercialize QPI-1002, its p53 temporary inhibitor siRNA drug. The company's lead compound, PF-655, is a synthetic siRNA designed to inhibit the expression of Quark's proprietary target, RTP801, and is licensed to Pfizer. Quark also holds a license from Alnylam to technology for RNAi therapeutics targeting multiple genes. (See BioWorld Today, Aug. 19, 2010.)

Another interesting company in the space is Rxi Pharmaceuticals Corp., co-founded by RNAi pioneer Craig Mello, who sits on the company's scientific board. Rxi is beginning to move programs based on its "self-delivering" RNAi oligonucleotides, or sd-rxRNA, compounds into the clinic to treat eye and skin scarring issues.

Last year, the company reported that intravitreal injection of lead compound RXI-109 reduced connective tissue growth factor (CTGF) protein levels in an animal study, showing its potential to fight retinal and corneal scarring as a result of injury or disease. The data suggested that RXI-109 lowers CTGF protein levels in a dose-dependent manner in the retina of non-human primates and that the drug sufficiently migrated to the cornea to lower CTGF levels there, as well. (See BioWorld Today, May 5, 2014.)

Rxi approached the delivery conundrum by eschewing conventional encapsulation of RNAi therapeutics. Instead, the company built drug-like properties into the RNAi compounds, themselves. The goal is to replicate the natural process of RNAi, which occurs "by the cell, in the cell, for the cell," explained Geert Cauwenbergh, Rxi's president and CEO.

"We have been able to change the structure of an RNAi drug to the extent that it still maintains good selectivity and lack of toxicity but now penetrates easily into the cells without causing damage to cell walls," he told BioWorld Insight.

Others among the long list of companies pursuing multiple RNAi candidates include Miragen Therapeutics Inc., of Boulder, Colo., Mirna Therapeutics Inc., of Austin, Texas, Gradalis Inc., of Dallas, and Silence Therapeutics plc, of London. (See BioWorld Today, May 1, 2012, Oct. 25, 2012, and May 16, 2013.)

The up-and-comers encompass an even longer list. All told, more than 90 biotechs have one or two RNAi candidates in discovery through phase II development, according to Cortellis CI, including companies such as Sevion Therapeutics Inc., of San Diego, Ugichem GmbH, of Innsbruck, Austria, and Silenseed Ltd., of Jerusalem. (See BioWorld Today, Aug. 21, 2013, and June 18, 2014.)

RNAi PUTS THE RISK PROFILE OF DEVELOPMENT 'ON ITS HEAD'

The key to bringing pharma back into RNAi is to demonstrate results in the clinic, according to Singh.

"For the most part, investments from these partnerships were driven by technology platforms, or the potential of RNAi technology platforms," he said. "If we see clinical successes that are more product-driven than platform-driven, that could get pharma to step up to the plate again."

A single breakthrough in RNAi drugs could have major implications for the space, Anzalone agreed, since "the time frame for development is much faster than traditional small molecule drugs and the chances of having off-target effects are much lower – and generally knowable, frankly, before you get to the clinic. RNAi takes the risk profile of drug development and puts it on its head, and it allows you to address previously undruggable indications."

The RNAi field has advanced to the point where delivery to the liver is "reasonably good," he said, and that's exactly where Arrowhead's initial indications are focused. "The next great breakthrough will occur when we can move outside the liver. The company that is able to do that will create a ton of value, because that will create a lot of space between it and the other RNAi companies."

Anzalone predicted progress in targets outside the liver will occur within several years. In the meantime, "within the liver, there are plenty of good targets for unmet medical needs," he said, pointing to the company's work in HBV and alpha-1 antitrypsin deficiency, or AATD, as clear examples.

"We think there's a pretty straight line between knocking down the protein that causes liver disease and alleviating that liver disease," he said. "We're excited that, over the very near term, we're going to see real clinical outcomes in those patient populations."

Maraganore was even more optimistic, maintaining that Alnylam has "solved delivery of RNAi therapeutics to the liver" with its technology, which includes lipid nanoparticles that encapsulate the siRNA molecule as well as the newer generation conjugation of GalNAc to an siRNA molecule, allowing dosing with a wide therapeutic index for knockdown of liver-expressed disease genes.

"Delivery beyond the liver is still in the research phase, and I'm optimistic that we'll address that over time in a systematic way," Maraganore told BioWorld Insight. "We're not particularly bothered by that, because we have our hands full and are drinking from a fire hose of opportunities with our liver platform and our liver-expressed disease genes."

Rxi took a different approach, targeting connective tissue growth factor for RXI-109, which opened indications such as hypertrophic scars and keloids. The approach was practical for a small company, Cauwenbergh said, because dermatology and ophthalmology represent lower-cost areas to conduct clinical trials, thanks to ease of access to the organs, while providing a variety of indications with high prevalence and unmet medical need.

"If you can bring the drug close enough to the target tissue, it will be absorbed," he pointed out. "If you work in the liver, as some of the larger companies are doing, there are more issues to consider. What is the retention time in the liver? How much gets metabolized and how quickly does it get metabolized? Does it get into the entire organ or is it focused more in the areas around the major blood vessels?"

PAYOFF 'POTENTIALLY TOO LARGE TO IGNORE'

RNAi faced the same vagaries of pharma interest that occurred across other therapeutic classes, Cauwenbergh maintained.

"The pharma companies are exuberant in the beginning and then go through a period of mourning," he told BioWorld Insight, citing the cycle that occurred in antibodies and, later, antisense, before pharmas began to show faith in those technologies. With major progress now occurring on RNAi delivery issues, "I think we are set for a rebirth of interest by big pharma companies in the space," Cauwenbergh said.

In the meantime, the capital markets have stepped in to fill the funding void as some of the lead RNAi players round the bases for home. Singh cited Dicerna's IPO, which raised $90 million, and Arrowhead's $120 million follow-on last year. (See BioWorld Today, Jan. 31, 2014, and Feb. 20, 2014.)

Meanwhile, shares of Alnylam (NASDAQ:ALNY) hit a one-year high of $121.93 this month.

"A lot of the companies that have placed a foothold in the RNAi space are driving investor interest," Singh said.

RNAi developers don't expect that interest to evaporate anytime soon.

"The value propositions are just too compelling," Anzalone said. "Investors in biotech need exposure in this field because the payoff is potentially too large to ignore."

"Over the next 12 to 18 months, we are expecting to see a continued drumbeat of clinical data that demonstrate the power of this approach for medicine," Maraganore added. "We're really just at the beginning stages of how big and broad this opportunity can be."

Ultimately, players in RNAi drug research don't expect to go it alone. Alnylam has built, perhaps, the most intricate web of partnerships, but most companies in the space expect to partner with pharma for the commercial end game.

"As these drugs start to move toward the markets, big pharma will be back in a big way," Anzalone said. "Big pharma does an awful lot of things very well. Big pharma is very good at determining high-value targets, and big pharma sells drugs very well. These skills are needed for RNAi, just as they're needed for any other modality. RNAi will be part of every big pharma's portfolio at some point."