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Alnylam Shares Still Flying on ATTR Results, But Not All RNAi Drug Firms Get as Big a Boost on Data

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This story has been updated to include information about Arrowhead Research's reverse stock split.

Shares of Alnylam Pharmaceuticals continued to soar this week on the heels of the release of positive phase I data on its TTR-mediated amyloidosis treatment ALN-TTR02, which gave the stock a much-needed shot in the arm.

In early Monday morning trading, the shares were selling around $20 apiece, just $0.63 shy of a 52-week high and well above the roughly $12.50 bid price at which the stock was trading prior to the release of the results three weeks ago.

Despite Wall Street's positive reaction to the ALN-TTR02 results, Alnylam — and other publicly traded RNAi drug developers, for that matter — haven't always received such a warm reception from investors following good clinical trial data, which are sometimes overshadowed by other business issues.

ATTR is caused by mutations in the TTR gene, which result in the accumulation of pathogenic deposits in multiple tissues, according to Alnylam. ALN-TTR02 comprises siRNAs designed to silence both the wild-type and mutant versions of the gene, delivered using a second-generation lipid nanoparticle technology.

Three weeks ago, Alnylam announced that the drug not only proved safe in healthy volunteers, but that it also triggered up to 94 percent reductions in levels of its target protein after a single dose — a key achievement since reductions as low as 50 percent are believed to be sufficient to stabilize or even improve the disease (GSN 7/19/2012).

“The overall results were highly statistically significant,” Alnylam CMO Akshay Viashnaw said during a conference call held at the time. “Even at doses as low as 0.15 milligram per kilogram, substantial serum TTR suppression was achieved, where a mean 82 percent reduction was observed at nadir.”

To Rodman & Renshaw analyst Michael King, the fact that ALN-TTR02 triggered such robust target knockdown was largely responsible for the enthusiastic investor response, despite being in healthy volunteers.

He noted that Alnylam had already demonstrated proof of concept in ATTR patients in a phase I study with ALN-TTR01, a version of the drug that used an earlier-stage delivery lipid (GSN 5/10/2012).

“The assumption was that if [ALN-TTR01] is active in patients and [ALN-TTR02] is active in normals, then it doesn't take a huge leap of faith to say that [the second-generation drug] must be active in patients, as well,” he told Gene Silencing News.

Importantly, ALN-TTR02 has also received orphan drug status in the US, where there are no approved treatments for ATTR, offering Alnylam a potentially shorter and cheaper road to the market than for non-orphan conditions since the developers of such drugs are given benefits including tax incentives, clinical research subsidies, and extended patent protection.

“And yet, they can charge an attractive price” for the therapy should it reach the market, King noted.

A phase II trial of the drug in ATTR patients is already underway (GSN 6/7/2012).

Although Alnylam has had setbacks with other clinical programs, including its respiratory syncytial virus drug ALN-RSV01, which failed to meet the primary endpoint of a recently completed phase II study (GSN 5/31/2012), the company has generated good human data in the past, yet these have not had the same impact on its stock as ALN-TTR02.

For example, Alnylam announced in April that a single dose of its hypercholesterolemia drug ALN-PCS, which targets proprotein convertase subtilisn/kexin type 9, significantly and durably lowed both its target and low-density lipoprotein cholesterol levels in a phase I trial (GSN 4/26/2012).

The firm's stock, however, saw only a modest boost of 6 percent to close at $10.62 that day.

Already well validated, PCSK9 is a popular target for a number of drugmakers, including Sanofi and Regeneron Pharmaceuticals whose PCSK9-targeting antibody recently entered phase III testing and is predicted to hit the market by 2015, in part tempering enthusiasm over the potential for ALN-PCS. Alnylam, in fact, has said it will only advance its drug if it is able to find a partner for it.

Also experiencing a tepid investor response to positive clinical data was Silence Therapeutics, which last June reported preliminary results from a phase I study of its cancer drug Atu027 (GSN 6/9/2011).

The siRNA therapeutic is designed to silence the protein kinase PKN-3, which is associated with cellular morphology and locomotion in endothelial and cancer cells. Both the drug and its proprietary lipid delivery system were acquired by Silence when it acquired Atugen in 2005.

At last year's American Society of Clinical Oncology meeting, Silence announced that Atu027 proved well tolerated in a trial of 24 solid tumor patients, with nine of the 20 patients who completed the study achieving stable disease after repeated dosing. Six cases were confirmed after three months, and one patient with neuroendocrine cancer showed partial regression of pulmonary metastases, while another with breast cancer showed a “slight regression” in liver metastases.

The phase I trial was completed last month, and full data is expected to be reported shortly.

Even with the findings, which Silence said also validated its delivery technology, Silence's shares barely moved on the London Stock Exchange after the company disclosed the data in early June. Playing a role in hampering the stock is the company's continued struggle to secure non-dilutive financing.

In June 2011, Silence successfully closed a nearly $10 million stock offering, but only through the issuance of nearly 300 million new shares. Around that time, the company had been dealing with the costs of maintaining operations in both the US and Europe; it has since shuttered its California-based facility amid a broad corporate reorganization (GSN 4/28/2011).

Silence shares currently trade around 1.37 pence ($0.02).

Another company whose stock has failed to benefit from advances with its RNAi technology is Calando Pharmaceuticals owner Arrowhead Research.

Calando became the first company to advance a formulated siRNA drug candidate into human testing when in 2008 it began a phase I trial of its cancer treatment CALAA-01, which is made up of siRNAs against the M2 subunit of ribonucleotide reductase and delivered in a linear, cyclodextrin-based polymer.

Two years later, the firm published data from that study showing the drug could knock down its intended target mRNA and protein inside a tumor through an RNA interference mechanism when delivered intravenously (GSN 3/25/2010).

The company's stock got a boost on the news, but it was a temporary one. The shares surged from $0.54 a piece to over a dollar on the news, but fell back down by the next year as Arrowhead dealt not only with Calando but issues related to its various other non-RNAi subsidiaries and investments.

Still, since then, Arrowhead's shares have risen to trade at more than $3.50 apiece, largely because of a 1-for-10 reverse stock split effected in November 2011, but in part reflecting the effect of the company's consolidation of its businesses and high-profile acquisition of Roche's former US RNA therapeutic operations in late 2011 (GSN 2/16/2012).

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