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Benitec's Hepatitis C Drug Resurrected by Startup Company and Industry Veterans

When Benitec shuttered its US operations earlier this year, the company also put all of its in-house drug programs on hold. Now, one of those programs has found new life with RNAi drugs startup Tacere Therapeutics, which said this week that it has exclusively in-licensed Benitec’s expressed RNAi drug candidate for hepatitis C.
Finding a licensee for the hepatitis C therapy, which has been renamed TT-033i, had been a key goal for Benitec since it began a major restructuring effort in the wake of serious financial and legal setbacks (see RNAi News, 9/14/2006 and 10/5/2006). And given Tacere’s management, the company seems to be a natural choice to take over the drug’s development.
Tacere was co-founded by former Benitec CEO Sara Cunningham Hall, who will serve as the new firm’s president and CEO. Cunningham Hall was also a co-founder and vice president of intellectual property and business development at Avocel, which initiated development of TT-033i and was acquired by Benitec in 2004 (see RNAi News, 5/21/2004).
Other Benitec alums now with Tacere include CFO and co-founder Mike Catelani, who was Benitec’s former CFO, and Vice President of Research and Development Linda Couto, who previously was Benitec’s preclinical director.
From Cunningham Hall’s perspective, TT-033i “is a compound we’ve worked on for quite a while,” and the formation of a new company to take over its development ensures that that work hasn’t been wasted.
She told RNAi News this week that as she and others from Benitec’s management looked to raise funds for the struggling company over the past year, they received “quite a lot of feedback … that there were a lot of complications associated with Benitec as a company — not just the [Australian Stock Exchange] listing, but some of the agreements and legacy issues associated with the lawsuits.”
However, they were also told that “if we were able to take the clinical program [in hepatitis C] … and put it into a more investable vehicle, there would be [financial] backing in the US. That’s essentially what we’ve done,” Cunningham Hall said.
Aside from Cunningham Hall, Catelani, and Couto, a number of others from the RNAi world have come together to create Tacere. The company’s scientific advisory board includes two former Avocel SAB members: Paul Pockros, director of the Scripps Clinic Research Foundation, and Robert Lanford, a scientist at the Southwest Foundation for Biomedical Research.
It was also co-founded by Amit Kumar, CEO of CombiMatrix, which signed an RNAi technology cross-licensing deal with Benitec last year and which has been eyeing the RNAi-based drugs field for some time (see RNAi News, 2/25/2005).
John Monahan, founder and former CEO of gene therapy firm Avigen, is another co-founder of Tacere, and Jonathan Coates, founder and former CEO of Avexa, sits on the privately held company’s SAB.
Lessons Learned
Founded with an undisclosed amount of seed financing from Hokkaido Venture Capital, Tacere is now in the process of raising additional capital through a Series A round. According to Catelani, the company aims to raise about $10 million over the next six to nine months.
That money will allow Tacere to add a few more people to its staff, all on the science side of the company, and begin to move TT-033i toward the clinic, he added.
Although at Benitec Cunningham Hall had predicted the hepatitis C drug would enter phase I testing by the end of 2006 (see RNAi News, 5/24/2005), she now said that this timeline has been pushed back by as much as two years.
“One thing we learned [from Avocel and Benitec] is that there still are issues to be dealt with … with systemic delivery of RNAi,” she said. “We are all realizing that — everyone’s timelines have been pushed out except in ocular indications. The IND filing dates [for all RNAi drug developers] are nothing like what they were expected to be a couple of years ago.”
Cunningham Hall added that the hepatitis C timeline is somewhat flexible, and that the exact timing will be dictated by Tacere’s fundraising efforts.
“With [systemic] RNAi drugs at this stage … you’re starting to get into the relatively expensive external studies [such as] rat tox studies and … chimps,” she said. “We would hope to be filing an IND by the end of 2008 with the RNAi drug, but that will largely be dictated by funding — how quickly we close the Series A.”
Cunningham Hall also said a key lesson taken from her time with Benitec was that while the public markets provide a handy source of financing, being public can prove overwhelming for a small biotech.
“It’s good for us to have been able to take a step back and synthesize everything we’ve learned over the past several years with fundraising around RNA interference, the interest in it, the excitement that continues,” she said.
Through Tacere, the company’s co-founders have been able to “take that into a new structure — [one that is] private, venture-backed, where we’re not going to have the same pressures as a public company of having to do a lot of deals to keep investors engaged.”
Having experienced those pressures firsthand, “we’ve chosen to stay private, stay focused on hitting clinical milestones, and not have to worry about PR,” she added.

If we “were able to take the clinical program [in hepatitis C] … and put it into a more investable vehicle, there would be [financial] backing in the US. That’s essentially what we’ve done.”

Not Just RNAi
Cunningham Hall said that although TT-033i would be Tacere’s primary in-house focus, the company will also explore small molecules for hepatitis C.
“We are in the process of putting together a strategic alliance with another company that we’ve worked with off and on over the past couple of years, which is an infectious disease company that has a drug in phase IIb for HIV,” she said.
“They also have some hepatitis C [small molecule] compounds, [and] while they’re very strong in the chemistry and clinical side of things, we’re much stronger on the biology side and on hepatitis C,” she added. “So we’re doing a strategic alliance with them looking to move forward a number of small-molecule compounds targeting hepatitis C.”
Cunningham Hall didn’t specify which company Tacere would be working with, but said that an announcement about the partnership would be forthcoming.
“We recognized that our core competence isn’t just RNAi, but hepatitis C — we spent so much time working on that as a clinical indication that we knew a lot about it as a disease target,” she explained. As such, “we really didn’t need to be limited as far as therapeutic modality.”
She noted that through this strategic alliance, “it will take us about six months to get a lead [small-molecule] compound. At that point, it would be lead optimization and [timing becomes] hard to predict. We’re looking at compounds from several different libraries and they’re fairly undecorated, as it were, so from a lead optimization standpoint there are a lot of available sites to tweak,” she said. “That will really dictate the pace of how fast they go into the clinic.”
Despite its inclusion of small molecules into its pipeline, Tacere hasn’t ruled out a future in RNAi, Cunningham Hall said.
“We know RNAi well and we know hep C, and I think it’s going to come down to whether we come out with a really good lead compound from the small-molecule side, [in which case] we’ll stay more focused” on hepatitis C, she said. “But we also have connections within RNAi, and there are certainly indications that aren’t being pursued right now that could be.”
As such, “I wouldn’t rule out” other RNAi programs, she said. “We know and love the RNAi world and definitely believe in the potential of the technology.”