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Alnylam, Rosetta Post Higher Q1 Losses on R&D Increases, Provide Liver Cancer Updates

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Alnylam Pharmaceuticals and Rosetta Genomics this week reported their financial results for the first quarter, with both companies posting increased losses on higher research and development spending.
The firms also provided some new details about their preclinical liver cancer programs during conference calls to discuss their financial results. Alnylam offered some insight into the selection of the genes its siRNA-based drug candidate targets, while Rosetta gave an update on the status of its collaboration with Isis Pharmaceuticals to develop an antisense-based therapy for the disease.
 
Last month, Alnylam announced that it had added ALN-VSP01 to its formal development pipeline as a treatment for liver cancer and other solid tumors (see RNAi News, 4/19/2007). The drug comprises two siRNAs, one targeting vascular endothelial growth factor, which is associated with angiogenesis, and the other targeting kinesin spindle protein, which has been linked to cell proliferation in various cancers.
 
Alnylam expects to file an investigational new drug application on ALN-VSP01 in 2008.
 
During Alnylam’s first-quarter conference call, President and CEO John Maraganore commented that the company’s decision to go after VEGF and KSP in its liver cancer program was due to the well-established roles the targets play in cancer.
 
“For reasons related to existing validation around tumor pathophysiology pathways, we and our advisors felt that a … combination of a blocker of angiogenesis with a very potent blocker … of cell proliferation … provides a compelling profile,” Maraganore said. “It really was the review of the available targets that have sufficient clinical validation or high-quality cellular validation that led to the selection of those two specific targets.”
 
He added that although Alnylam thinks that targeting two different cancer-related pathways will prove more effective than hitting multiple targets within the same pathway, this point remains speculative.
 
“Should you go after two targets in the same pathway versus two different pathways? … Frankly, it’s a philosophical discussion until you evaluate this in man,” he said.
 
In response to a financial analyst’s question as to whether Alnylam will also look at novel targets, rather than just well-validated ones, in its future cancer programs, Maraganore said that the company’s work with ALN-VSP01 is going to “open the door” for RNAi as a therapeutic modality for cancer and present “opportunities for multiple targets in multiple tumors.”
 
Nonetheless, “we’re looking for our friends in [academia] to do [early-stage validation] work,” he added.
 
As for Rosetta’s liver cancer program, President and CEO Amir Avniel said during a conference call with investors and analysts that the company’s roughly one-year-old collaboration with Isis to discover and develop antisense drugs that regulate microRNAs for the treatment of hepatocellular carcinoma has entered the lead selection stage.
 
“We have procured over 100 samples of HCC tumors from patients, as well as relative mouse models and cell lines,” Ranit Aharonov, executive vice president of intellectual property and computational biology at Rosetta, added during the call. “We [are using] this very large sample collection to identify … approximately 100 potential microRNA drug targets and determine the most appropriate in vitro cell lines.”
 
She noted that Isis has already synthesized antisense agents against these potential targets, and that Rosetta has “recently embarked on functional assays performed in vitro to determine potential leads for the therapeutic program.
 
“So far, we have identified four microRNAs that, when inhibited in vitro, lead to a decrease in liver cancer cell proliferation,” Aharonov said.
 
The Financials
 
For the first quarter, Rosetta’s net loss climbed to $2 million, or $0.23 per share, from a year-ago loss of $1.5 million, or $0.57 per share.
Rosetta’s research and development spending surged during the quarter to $1.2 million from $886,000 in the same period a year earlier, primarily due to increased purchasing of tissue samples and other research materials related to the company’s efforts to develop a diagnostic test for cancer of unknown primary origin.
 
Last week, Rosetta announced that it had signed a deal to acquire tumor samples for testing from the Henry Ford Hospital (see RNAi News, 5/3/2007), although the financial terms of the arrangement were not disclosed. The company is expected to sign a similar deal with another tissue sample provider some time this year.
 
Rosetta’s marketing and business development spending dropped slightly during the first quarter, to $375,000 from $387,000 a year earlier. Meanwhile, general and administrative costs jumped to $680,000 from $211,000, reflecting the legal and professional expenses associated with completing the firm’s initial public offering (see RNAi News, 3/1/2007).
 

“Should you go after two targets in the same pathway versus two different pathways? … Frankly, it’s a philosophical discussion until you evaluate this in man.”

Rosetta’s income rose to $200,000 in the first quarter from $33,000 the year before, but was primarily derived from interest on bank deposits and income from marketable securities. The company posted zero revenues in the quarter and does not expect to record any revenues for the rest of 2007.
 
As of March 31, Rosetta had cash, cash equivalents, short-term bank deposits, and marketable securities totaling $36.3 million.
 
Alnylam’s first-quarter net loss, meanwhile, surged to $21.6 million, or $0.58 per share, from $8.9 million, or $0.30 per share, in the year-ago quarter. According to the company, the increase was primarily due to an $8.3 million license fee paid in cash and stock to Tekmira Pharmaceuticals (formerly Inex Pharmaceuticals) for rights to a drug-delivery technology (see RNAi News, 1/18/2007).
 
Alnylam’s R&D spending in the quarter jumped to $26.7 million from $11.7 million, again as a result of payments to Tekmira, as well as costs associated with the company’s phase I respiratory syncytial virus program and other preclinical drug-development projects.
 
General and administrative expenses, meanwhile, edged up to $4.5 million in the first quarter from $3.8 million in the same period a year earlier.
 
Alnylam’s first-quarter revenues climbed to $7.2 million from $5.7 million in the same period last year and included $4.1 million in expense reimbursement from partner Novartis (see RNAi News, 2/23/2006) and $3.1 million in expense reimbursement from partner Biogen Idec (see RNAi News, 9/21/2006). 
 
At the end of March, Alnylam had cash, cash equivalents, and marketable securities worth $204.5 million. The company said it expects to have about $180 million in cash, cash equivalents, and marketable securities by the end of 2007.

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