NEW YORK, July 11 - Monday's merger between short interfering RNA therapeutics firms Alnylam and Ribopharma started with friendly discussions between the management at the two companies, but was heavily influenced by venture capitalists' desire to establish a dominant presence in the market.
"I think all the venture backers saw it as an opportunity of building sort of an 800-pound gorilla in the space," said Alnylam CEO John Maraganore, "as opposed to separate financings for two separate companies that would ultimately be competitive."
The combined entity, which is for now called Alnylam holdings, secured $24.6 million in funding, giving it a total of over $43 million.
Additionally, the company now has 60 employees divided between the Alnylam headquarters in Cambridge, Mass., and Ribopharma's facility in Kulmbach, Germany. It plans to expand "modestly" from there, Maraganore said.
"By bringing the two efforts together, we are effectively building critical mass more quickly than either of us would have done separately," he said.
This 'critical mass' makes Alnylam Holdings as big as Sirna therapeutics, the only publicly-traded firm in the field, which raised $48 million in a PIPE financing that closed in mid-April.
But perhaps more important than dollar amounts raised and headcount is the IP position that the Alnylam-Ribopharma merger has created.
"Both of the companies, Alnylam as well as Ribopharma, have had basic IP for the use of siRNAs as therapeutics," said Roland Kreutzer, CEO of Ribopharma and the new COO of the combined company. "That's one of the major reasons for this merger: we think we can exploit this very good and leading IP position."
Alnylam has been granted exclusive licenses for therapeutic uses to a group of patent applications from MIT, the Max Planck Institute, the Whitehead Institute, and the University of Massachusetts Medical School that refer to the efficacy of short RNAs as sequence-specific mediators of RNA interference and degradation. (Tom Tuschl, Phillip Zamore, Phillip Sharp and David Bartel are among Alnylam's founders).
But these US patent applications have not yet transformed into granted patents, and there has been controversy as to whether other intellectual property - namely a European patent by Ribopharma founders Kreutzer and Stefan Limmer, which describes a method for inhibiting expression of a gene by insertion of double-stranded RNA of less than 25 nucleotides - constitutes prior art.
With the merger of Alnylam and Ribopharma, this sleeping beast of an IP controversy has been defanged.
"We thought that consolidation early on was the best strategy," said Peter Barrett, a board member of Alnylam and principal at Atlas Ventures, one of the Alnylam's major venture backers, "because then you can actually not [be] spending your time and money on fighting other potentially important IP; you are spending your time on developing the best combined intellectual property strategy - and more importantly, creating value from that."
This combined patent portfolio, the company's executives believe, will help it accomplish what is the next big goal: a major deal with a big pharma or big biotech company. "Due to the strength of the combined patent portfolio, we certainly will be the first address for any [company] in the biotech or pharma [sector] to deal with," said Limmer, who is the combined company's new chief technology officer.
Maraganore has a goal of landing the first major pharma or biotech partnership for Alnylam Holdings by the end of the third quarter - not an easy task. "You can look at the calendar as I do every day and realize that means that we have a goal of accomplishing this within the next three months," he said.
But luring pharma is not the only formidable challenge that Alnylam Holdings faces. Like other companies trying to turn siRNA into therapeutics, the company has to figure out how to deliver the molecules in a clinically effective and non-toxic manner. Delivery is "the number one technical hurdle that has to be addressed," Maraganore said. A "major goal of the combined company," he said, and one to which a major amount of the company's financing will be devoted, "is to identify the right strategies to ensure that delivery does not become a bottleneck for this new, important class of therapies."
Lu, who is the executive vice president of Intradigm, said that both Alnylam and Sirna are talking to Intradigm because of its expertise with target delivery systems. The company has developed a pulmonary delivery system, through which siRNA can be delivered to cells in the lung, as well as a joint delivery system, a tumor delivery system, and a systematic target delivery system that can deliver siRNA to new vasculature such as tumors and inflammation.
Intradigm announced a collaboration with Qiagen Tuesday to use Qiagen's siRNA's in its therapeutic development efforts. This deal, said Lu, "means we can access their TOM [amidite chemistry] technology-based siRNA synthetic oligos, and they can use Intradigm's platform to demonstrate [that] their specific, patented oligos [are] also very useful for target validation as a research tool and potential therapeutic."
Lu emphasized that the deal is non-exclusive and that Intradigm also may decide to use siRNA from other providers.
Intradigm plans to assess the use of Qiagen's siRNA oligos in achieving endogenous knockdown in arthritis, oncology, and the SARS coronavirus. In this last area, the company has already used its pulmonary delivery vehicle to use siRNA to treat SARS virus infection in the mouse, and is now doing toxicology studies on different siRNAs.
Now, Intradigm has sent its siRNA both to the National Institute of Allergy and Infectious Diseases to test the siRNA molecules, as well as another collaborator, Top Biotech LTD, which is based in Hong Kong and Guangdong, China. Top Biotech is working with a non-human primate animal model. Intradigm is using its own funds for the project.
In research news, a team from the University of Texas Southwestern Medical Center and Proligo of Boulder, Colo., published a paper in the July 8 issue of Biochemistry, in which they described that chemical modification of RNAi increases its stability, potency, and potential clinical efficacy. They report that RNA duplexes with phosphorothioate or phosphodiester linkages were stable during long periods of incubation in serum, and that the RNAi with the phosphorothioate linkages selectively inhibited gene expression. They also found that introducing Proligo's locked nucleic acid nucleotides also increased the thermal stability of these duplexes and did not render it less effective.
While several conferences so far have integrated RNAi into their programs, the first-ever virtual conference on the subject is to take place next Tuesday, July 15, between 12:00PM and 1:30 PM EST. Nassim Usman, chief scientific officer and vice president of R&D at Sirna Therapeutics, will be the presenter, and will be monitored by Barry Polisky, vice president of research at Sirna. For more information, go to http://www.genengnews.com/seminars/rnai.htm.