This article has been updated from a previous version to include comments from MDRNA's CEO.
MDRNA announced this week that it has decided to focus its drug-development efforts exclusively on liver cancer using RNAi technologies developed in-house, effectively shelving a number of other programs, including ones incorporating Dicer-substrates, that the company had unveiled less than a year ago.
Speaking during a conference call to discuss the company's fourth-quarter financial results, MDRNA President and CEO Michael French indicated that the troubled economy was a major factor forcing the firm to trim projects from its pipeline.
"We think it is somewhat irresponsible and impractical to have a multi-indication [pipeline] in this [economic] environment," he said. Instead, "we're going to cut off what we think we can chew and pursue liver cancer."
Last August, MDRNA announced that it was developing siRNA-based treatments for hypercholesterolemia, bladder and lung cancer, rheumatoid arthritis, and inflammatory bowel disease (see RNAi News, 8/7/2008).
Since then, however, the company has struggled to stay afloat. By late last year, the company had only enough cash to last into the first quarter of 2009 as it dealt with a severely deflated stock price (see RNAi News, 11/20/2008).
Yet there is the possibility that the halted programs could find new life in light of a technology-licensing deal between MDRNA and Novartis announced yesterday.
Under that arrangement, MDNRA has granted a non-exclusive license to its liposomal-based siRNA-delivery platform to Novartis in exchange for an upfront payment of $7.25 million.
Additionally, the companies signed a separate agreement under which Novartis has been granted an undisclosed exclusive period during which it may negotiate a research-and-development collaboration with MDRNA and obtain increased access to the RNAi shop's delivery technology.
Although he declined to comment specifically on the Novartis deal, French told RNAi News this week that "we could easily and readily re-start any one of those programs if we had partnering interest."
At the same time, the Novartis deal has provided MDRNA with much-needed capital, and French noted during the conference call that the $7.25 million, along with funding from a technology-licensing deal signed with Roche last month (see RNAi News, 2/19/2009), is expected to give the company the resources to fund its operations into the third quarter.
Until then, MDRNA is focusing on its newly minted flagship program in liver cancer, which is a particularly attractive indication given the early success the company has had in delivering siRNAs to the liver, CSO Barry Polisky said during the call.
He noted that siRNAs formulated using the company's so-called DiLA2 platform, which allows for the creation of liposomal delivery vehicles from amino acids, have shown to "traffic efficiently to the liver."
And while these findings don't necessarily mean that liver cancer cells will be as readily accessible to the siRNAs as healthy cells, "we anticipate that tumor cells in the liver will take up the particular formulation" MDRNA researchers have developed, he said.
The company has thus far been "working extensively on multiple gene targets relevant to liver cancer," and is in the midst of in vivo animal testing, Polisky added.
"Data in a mouse model of liver cancer will be a key decision point in our liver cancer program," he noted. "Various studies are in progress, and … current efforts are focused on selection of molecular target or targets, dose levels, dose schedules, and durability of RNAi in vivo."
Data from those mouse studies are expected in the third quarter, and the company anticipates reporting them at upcoming scientific conferences, he said.
Importantly, Polisky noted that MDRNA will not use its Dicer-substrate technology in its liver cancer program, but will rather focus on proprietary siRNA constructs such as meroduplexes, which are essentially siRNAs with a nick or gap in the sense strand, and its so-called usiRNAs, which are siRNAs modified with non-nucleotide acyclic monomers known as unlocked nucleobase analogs. According to MDRNA, these features are designed to minimize off-target effects and undesired passenger strand activity.
In 2006, MDRNA acquired the right to use Dicer-substrates against five undisclosed therapeutic targets from the City of Hope (see RNAi News, 11/9/2006), and had been considering using the roughly 27-nucleotide long oligos in its various drug-development programs. However, the company said today that it has terminated its arrangement with the City of Hope and no longer holds the rights to use the Dicer-substrate technology.
Commenting on the decision to end its licensing deal with the City of Hope, French told RNAi News that, in addition to showing promise in preclinical testing, MDRNA's in-house siRNA constructs are expected to give the company an edge when it comes to forging industry alliances.
"As we look at establishing partnerships and the challenges of [doing so] when you're using somebody else's technology, [we determined it was] far better for us to focus on things we exclusively own and control," he said.
The Fourth Quarter
For the three months ended Dec. 31, MDRNA's revenues dropped to $200,000 from $6.4 million in the same period a year earlier. The company noted that revenues in the fourth quarter of 2007 included roughly $5.5 million in previously deferred revenue from a non-RNAi program with Procter & Gamble, which has since been terminated.
Research and development spending in the quarter fell to $9.7 million from $12.8 million, a decrease the company attributed to its restructuring, which saw the firm change from intranasal drug-delivery firm Nastech Pharmaceuticals to MDRNA (see RNAi News, 6/12/2008). This decrease was partially offset by a $200,000 restructuring charge.
Total operating costs dropped to $12.4 million from $18.7 million.
The company's net loss in the quarter edged up to $12.3 million, or $0.39 per share, from a year-ago loss of $12 million, or $0.47 per share. The increase was in part driven by $5.5 million in non-recurring items including non-cash stock compensation, accrued severance for the company's former CSO, and accrual of a legacy intranasal patent milestone settlement.
MDRNA finished 2008 with about $3.4 million in cash and cash equivalents.