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Fresh Off Merger, Tekmira Posts Drop in Q2 Losses, Says New Delivery Deals on Horizon

Tekmira Pharmaceuticals last week reported its second-quarter financial results, posting a drop in losses despite sharply increased research and development spending and lower revenues.
The news comes about two and a half months after Tekmira completed its merger with Protiva Biotherapeutics, a move that ended a protracted legal battle between the companies over the ownership of one of the RNAi drug field’s most important delivery technologies (see RNAi News, 4/3/2008).
Despite the slip in revenues and mounting expenses, a number of ongoing collaborations for Tekmira’s core siRNA delivery technology, called stable nucleic acid lipid particles, have put the development-stage company in a position to generate near-term revenues as it advances its own pipeline program. As a result, Tekmira expects to be able to fund its operations through the end of next year.
At the same time, Tekmira’s President and CEO Mark Murray said during a conference call last week that the company is eyeing new licensing deals for its SNALP technology and may be poised to ink one with Japanese drug giant Takeda Pharmaceutical. 
Tekmira announced earlier this month that it had formed a research collaboration with Bristol-Myers Squibb focused on using SNALPs to deliver siRNAs to specific organs and tissue outside of the liver. Tekimira expects to record about $450,000 in revenues related to that deal over the remainder of 2008.
Tekmira, in an earlier incarnation as Inex Pharmaceuticals, had also licensed the SNALP technology to Alnylam Pharmaceuticals (see RNAi News, 3/30/2006), which has made the technology available to its partner Roche (see RNAi News, 7/12/2007) and microRNA joint venture Regulus Therapeutics (see RNAi News, 9/13/2007).

“We haven’t yet had an opportunity to interact with Takeda. But since they are a licensee of the technology and they are interacting with Alnylam, we expect they have an understanding of our technology and will be interested in it.”

According to Tekmira, it is eligible to receive milestones of up to $16 million for each SNALP-backed RNAi drug successfully developed by these companies, in addition to royalties on product sales.
Merck, meanwhile, holds a non-exclusive license to the SNALP technology as part of an agreement that ended litigation between its subsidiary Sirna Therapeutics and Protiva (see RNAi News, 10/18/2007). Under that arrangement, Tekmira stands to receive up to $17 million in milestones for each drug developed using SNALPs, as well as royalties.
Then, in May, Alnylam announced that it had signed a deal giving Takeda worldwide, non-exclusive access to its RNAi intellectual property and technology to help develop drugs for cancer and metabolic diseases (see RNAi News, 5/29/2008), opening the door for another Alnylam collaborator to grab a license to the SNALP technology.
Given the recentness of that deal, Tekmira’s Murray said during the conference call that “we haven’t yet had an opportunity to interact with Takeda. But since they are a licensee of the technology and they are interacting with Alnylam, we expect they have an understanding of our technology and will be interested in it,” he noted.
“We are also conducting feasibility research activities with several other pharmaceutical companies who are evaluating our SNALP technology,” he added. “We will continue to foster these evaluations, each of which has the potential to evolve into a more significant license agreement.”
Drop in Loss, Revenue
In the second quarter, Tekmira’s net loss fell to $4.8 million, or $0.14 per share, from $5.1 million, or $0.21 per share, in the same period a year earlier.
During last week’s conference call, Tekmira Executive Vice President and CFO Ian Mortimer noted that the second-quarter results include the consolidated operations of Protiva, meaning that the results include two months of Tekmira’s operations pre-merger and one month as a combined entity.
Revenues in the quarter fell $500,000 to $2.5 million and were almost entirely generated through the company’s arrangement with Alnylam.
Tekmira’s R&D costs in the second quarter surged to $5.7 million from $1 million in the year-ago period as the company built its internal R&D staff to its current size of 93 employees. These expenses also include about $800,000 related to Protiva’s own RNAi-based drug-development programs.
Currently, Tekmira is developing siRNA-based drugs for hypercholesterolemia and cancer, and expects to file an investigational new drug application for each in 2009 (see RNAi News, 7/24/2008). The company also expects to announce a third RNAi program next year.
General and administrative costs in the second quarter edged up to $1.8 million from $1.7 million.
As of June 30, Tekmira had cash and cash equivalents totaling $37.9 million. During the conference call, Mortimer said that the company anticipates that its monthly net burn rate will be roughly $1.5 million through the end of 2009.
Given this, “we expect our funds on-hand, plus expected interest and revenue, to be sufficient to continue our product development until the first half of 2010,” he said.

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