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After Delays, Nucleonics to Move Hep B Drug To Clinic in '07; Firm Unveils New Rx Goals

Despite having kept a low profile over the past year, privately held Nucleonics has continued to advance its lead hepatitis drug-development programs and is now aiming to move a hepatitis B candidate into a phase I study early next year, RNAi News has learned.
Additionally, the expressed-RNAi drug developer has initiated preclinical programs in cancer and influenza, and is eyeing a Series C financing round for early next year.
Nucleonics had missed its previous goal of bringing the hepatitis B product into the clinic by the end of 2005, a setback caused as the firm wrangled with optimizing the drug’s formulation for intravenous delivery. But Nucleonics President and CEO Robert Towarnicki said the firm is now on track to file an investigational new drug application for the agent next month.
“We’ve had our pre-IND meeting” with the US Food and Drug Administration, he told RNAi News this week. “The next step for the FDA is the filing of the IND, which we anticipate will occur in December.”
But before the IND can be filed, Nucleonics is still required to present its phase I clinical program to the National Institutes of Health’s Recombinant DNA Advisory Committee.
The NIH established RAC in 1974 to address concerns over the safety of using recombinant DNA techniques to manipulate genetic material. Among RAC’s duties is to provide the NIH with “advice concerning various advances in recombinant DNA technology, as well as ethical and safety considerations associated with novel or possibly risky forms of recombinant DNA research,” according to the NIH. 
Towarnicki noted that the company is scheduled to meet with the RAC on Dec. 6, while the phase I trial is scheduled to begin in the first quarter of 2007. He said that the study’s design calls for about 18 treatment-naïve chronic hepatitis B patients to receive a single intravenous dose of the expressed RNAi drug.
“The estimation is that if we don’t hit any [safety] issues … we’ll go up to six dose levels” with three patients in each cohort, Towarnicki explained, adding that “in typical phase I fashion, if you had something of a modest [adverse event] in a single patient and it was deemed likely not to be drug-related, you’d bring in another three [patients in to receive a particular dose] before you’d escalate to the next level.”
He also noted that patients at certain dose levels will receive a second dose of the RNAi drug in order to identify any possible drug-related immune responses.
The phase I trial is expected to last 42 weeks, after which Nucleonics will begin advancing its hepatitis C drug candidate toward the clinic.
“We’re actually holding [our hepatitis C program] back,” Towarnicki said. While all the groundwork has already been laid for a hepatitis C study, “it just makes no sense to invest the money into the clinical program since it follows the same formulation for [the hepatitis B candidate] and the same safety questions will be answered — the only difference will be the safety of the shRNAs themselves. It doesn’t make sense to invest millions of dollars [to work on both programs] in parallel to find out that there is going to be a problem.”
An Unexpected Benefit
Although Nucleonics’ earlier difficulties with optimizing the formulation for its hepatitis B drug threw it off schedule, the research inadvertently led to the establishment of preclinical programs in ovarian and prostate cancer, according to Towarnicki.
While examining the efficacy of various drug formulations targeting the liver, “we discovered some very potent ability to transfect the peritoneal cavity — the organs in the cavity and the cavity lining itself,” he said.
“Ovarian cancer is a cancer that spreads within the peritoneal cavity … [and] I believe the FDA has come out and given guidance for [the disease’s] treatment … recommending [intraperitoneal] delivery of the chemo over IV delivery,” he said. “In light of the fact that we can robustly transfect the peritoneal cavity with an IP injection … ovarian cancer seems to make sense.”
Around the same time Nucleonics decided to pursue ovarian cancer, the company’s fledgling program in prostate cancer was born.
“Having worked in an oncology company before” — Cell Pathways — “I knew that the prostate was readily accessible,” Towarnicki said. “It is, in a sense, an encapsulated organ and the thought was, ‘Why can’t we inject right into the prostate?’”

“We’re actually holding [our hepatitis C program] back. … It doesn’t make sense to invest millions of dollars [to work on both programs] in parallel to find out that there is going to be a problem.”

Using a delivery system licensed from the Wistar Institute and an orthotopic mouse model of prostate cancer created by a collaborator at the Lankenau Institute for Medical Research, an affiliate of Jefferson Medical School, “we’ve shown … that we can transfect prostate cancer very robustly within the mouse prostate … giving microinjections that would be comparable to the kinds of volumes that we would provide to a human,” Towarnicki said.
He said the company is currently manufacturing an expression plasmid that expresses an shRNA for an undisclosed but well-validated target in prostate cancer, and plans to evaluate the compound’s ability to inhibit tumor growth and shrink established tumors. “If we succeed there, we’ll go back and create a multi-targeting product that would be more in line with what we’d expect to develop as a clinical candidate,” he added.
In addition to its two new cancer programs, Nucleonics has also begun working on a drug for the prevention and treatment of influenza.
The company has already identified and created shRNAs targeting conserved regions of the virus’ genome, and is currently evaluating delivery systems in ferrets, he said. “It’s likely going to be an inhaled delivery system, but we want to make sure that we’re getting to the right parts of the respiratory system for viral establishment and replication in flu.”
Taking it to the Bank
Nucleonics has also set its sights on raising additional capital. In 2004, Nucleonics closed a Series B financing round that raised $49.2 million (see RNAi News, 6/4/2004). The company still has about a year’s worth of cash on hand, but Towarnicki said that it has decided to raise additional funds.
As it stands, Nucleonics expects that the Series C will include only existing investors and will be structured in such a way as to maintain each investor’s current equity stake. Should this be the route Nucleonics takes, “we’ll probably put what we estimate to be another year’s burn into the company … somewhere around $16 million,” Towarnicki said.
“If we let new investors in — and that’s going to be [a decision for the company’s] board — … my guess is that … we’d let in another 25 to 30 percent [and] take it up to [around] $20 million,” he added. “But I don’t think the board right now wants to see us dilute significantly the existing investor base while we’re on the verge of [hitting] some value-generating events.”

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