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Merck Remains Committed to RNAi Despite Shuttering Its California Facility

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By Doug Macron

Merck confirmed late last week that it is closing down its RNAi research-and-development facility in San Francisco, cutting 55 jobs in the process.

However, a Merck spokesperson stressed that the company “continues to invest significantly” in the gene-silencing technology and said that the decision to close the California location was strictly a cost-cutting move.

“All of the resources and key talent [from the San Francisco lab] are going to be transferred” to Merck's facility in West Point, Pa., where the company's RNA therapeutics operations will now be headquartered, he said. “There is no change in direction” regarding the firm's work in RNAi, both as a research tool and as a therapeutic modality.

To some, the drug maker's move, disclosed on Friday, indicated that it had joined a growing list of big pharmas that had opted to turn their back on the gene-silencing technology, but the spokesperson said that this is not the case.

Closing the San Francisco site, which was acquired when Merck paid $1.1 billion for Sirna Therapeutics in 2007, was “a difficult decision,” but one that was necessary given the “challenging industry environment and the need to manage fixed costs,” he said.

The spokesman also confirmed that Jeremy Caldwell has become the head of Merck's RNA therapeutics division, replacing Alan Sachs, who has assumed an undisclosed role within the company.

He was unable to comment on whether Merck would retain the Sirna Therapeutics name.

'Potential to be Transformative'

Merck's interest in RNAi as the basis for therapeutics extends back to 2003, when the company became the first big pharma to embrace the technology through a collaboration with Alnylam Pharmaceuticals (GSN 9/12/2003).

Though that arrangement was eventually terminated by mutual agreement, Merck continued to invest in the field, most notably through the Sirna acquisition, which remains the RNAi industry's biggest deal to date (GSN 1/4/2007).

Yet Merck remained tight-lipped about its efforts with RNAi as a drug modality, never formally providing guidance on how it planned to use the technology to create new drugs. Merck officials have publicly stated that the company believes the technology faces significant hurdles before it could yield clinical candidates, while highlighting its utility for research applications, such as target validation.

For instance, in 2008 Sachs, speaking in a keynote address at the Drug Information Association Oligonucleotide-based Therapeutics Conference, said that issues continue to hamper RNAi therapeutics and that the field isn't “even close to finding a solution” to the delivery problem (GSN 10/3/2008).

Meantime, a number of big pharmaceutical players that had invested heavily in RNAi have recently backtracked, raising questions of whether Merck would follow suit, even before the drug maker disclosed its plans for the San Francisco site.

First, in September, Alnylam reported that longtime partner Novartis had decided not to exercise an option to acquire broad, non-exclusive access to the RNAi shop's intellectual property, instead deciding to limit itself to the more than 30 targets against which it was already permitted to use Alnylam's technology (GSN 9/30/2010).

A few weeks later, Roche said that it was shutting down its in-house RNAi therapeutics efforts as part of a broader cost-cutting initiative (GSN 11/18/2010). As part of the move, the company closed its Kulmbach, Germany, facility, which it bought for $15 million from Alnylam in 2007. It also closed its Madison, Wis., operations picked up through its $125 million acquisition of Mirus Bio in 2008.

Then, early this year, Pfizer said it was closing its oligonucleotide therapeutics unit, which handled the company's nucleic acid drug-development efforts (GSN 2/3/2011).

Amid these changes in big pharma's apparent perception of RNAi's potential therapeutic utility, the news that Merck was closing its San Francisco facility initially raised red flags among industry watchers that the firm had become only the latest to lose interest in the technology.

However, the Merck spokesperson said that the company continues to move forward with RNAi just as before.

“We still continue to believe that [RNAi] holds the potential to be transformative into [disease] treatments … and continue to develop it as a therapeutic modality,” he said, adding that “more than 100 employees” at the company are currently working on the technology.


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