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In 2007, RNAi Grabs Attention Of Big Pharma and Big Bucks

The past year was marked by many milestones in the business of RNA interference, including the initial public offering of microRNA shop Rosetta Genomics (see RNAi News, 3/1/2007) and the addition of a number of new faces to the RNAi drug-development scene (see RNAi News, 12/13/2007).


But key industry insiders will most remember 2007 for big pharma’s increasing recognition of RNAi’s therapeutic potential.
In the first days of 2007, Merck closed a $1.1 billion cash buyout of Sirna Therapeutics (see RNAi News, 1/4/2007). About seven months later, Alnylam Pharmaceuticals and Roche announced a drug-discovery alliance worth as much as $1 billion to Alnylam (see RNAi News, 7/12/2007), and Silence Therapeutics and AstraZeneca inked an siRNA-based drug-discovery deal worth as much as $400 million (see RNAi News, 7/12/2007).

In late December, Santaris Pharma and GlaxoSmithKline announced that they had struck a drug-discovery and -development alliance, valued at up to $700 million to Santaris, that gave the British drugs giant an option to develop Santaris’ microRNA-targeting hepatitis C drug candidate SPC3649 (see RNAi News, 12/20/2007).


And in a smaller deal over the summer, startup Cequent Pharmaceuticals secured $3 million in funding plus an undisclosed upfront fee from Novartis as part of an arrangement that gave the big pharma an option to Cequent’s nascent inflammatory bowel disease program (see RNAi News, 6/21/2007).


These deals “spoke loudly and clearly” about big pharma’s interest in RNAi as a therapeutic modality, according to John Rossi, a City of Hope researcher and co-founder of RNAi drugs startups Dicerna and Calando Pharmaceuticals.
William Marshall, president and CEO of microRNA drugs newcomer Miragen Therapeutics and former vice president of technology and development for Dharmacon parent firm Thermo Fisher Scientific, agreed.
Calling 2007 a “landmark year” for RNAi therapeutics, he said that he observed “a heck of a lot more interest across the board from drug developers in the potential of the technology” as they look to fill gaps in small-molecule drug pipelines.
Swiss Miss
Although big pharma had been testing the RNAi waters as early as 2003 (see RNAi News, 9/12/2003), it took two more years before the pharmaceutical industry would begin to truly embrace the technology, according to Douglas Fambrough, a Dicerna co-founder and general partner at Oxford Bioscience Partners, which was an early institutional investor in Sirna Therapeutics.


It was then, in 2005, that Novartis signed a broad drug-discovery and -development deal with Alnylam that included the Swiss drugs giant taking a nearly 20 percent stake in the RNAi shop (see RNAi News, 9/9/2005), making Novartis “clearly an early adopter” of RNAi, according to Fambrough.


“There are, I suspect, a lot of people mulling in these big pharma companies that haven’t done anything in RNAi [about] how and whether they should get in. And it’s not easy to get in [since] the intellectual property is quite consolidated.”

“I don’t think there were other big pharmas that were interested in doing a deal of that magnitude at that point,” he said. But “starting sometime in 2006, there was this intellectual/philosophical change within some of the … more innovative research-based big pharmas [in which they decided that] they needed to be paying attention and have access to RNA interference.”
Before the end of that year, Merck also announced that it would pay $1.1 billion in cash for Sirna (see RNAi News, 11/2/2006).


That deal, which closed a few months later, “set the tenor of ’07,” Fambrough told RNAi News, and led to what he considered one of the momentous events of the past year: the deal between Roche and Alnylam.
Under that arrangement, Roche paid $274 million upfront for non-exclusive access to Alnylam’s intellectual property estate, $15 million for Alnylam’s European subsidiary, and $42 million for a nearly 5 percent stake in the RNAi firm.
But by then, Roche was playing catch-up, Fambrough said.
“I don’t think I’m betraying too dear a secret when I suggest that Roche was a losing bidder for Sirna,” he said. “It is a bit of a bitter pill for Roche to get in line behind Novartis … [and] yet Roche did this major alliance with Alnylam, which is subject to the prior right of first refusal on targets that Novartis already had [tied up in their deal].”
According to Fambrough, “Roche clearly felt like … they weren’t going to lose [out on the RNAi game] a second time [so] they turned around immediately and started negotiating with Alnylam to do the best they could given that Novartis had already done a very broad deal with Alnylam.”
Though Roche’s arrangement with Alnylam may have been less than ideal, it did give the big pharma a way into the RNAi drugs space. But it also further narrowed the options for other pharmaceutical firms that may want a slice of the RNAi pie.
“There are, I suspect, a lot of people mulling in these big pharma companies that haven’t done anything in RNAi [about] how and whether they should get in,” Fambrough said. “And it’s not easy to get in [since] the intellectual property is quite consolidated,” primarily in the hands of Alnylam and Merck.
In 2008 and beyond, Fambrough said, companies like Silence Therapeutics, Dicerna, and Nastech Pharmaceutical, which boast RNAi technologies that fall outside of the IP covering traditional siRNA, may become hot targets for pharmaceutical players — “if they play their cards right.”

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