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Novartis Cuts Back on In-house RNA Therapeutics Efforts

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This article has been updated from an earlier version.

Novartis this week disclosed that it will "significantly reduce" its in-house RNA therapeutics research and development, which includes its RNAi drugs efforts. The company will, however, maintain a small group that will continue working with the gene-silencing technology.

According to a Novartis spokesperson, the decision was driven by "ongoing challenges with formulation and delivery and the reality that the current range of medically relevant targets where siRNA may be used is quite narrow."

Currently, the pharmaceutical giant has 26 full-time employees dedicated to RNA medicines research. It was not immediately clear how many will continue working in this area, and the spokesperson said that Novartis is now examining how best to allocate most of the personnel to "other projects."

Novartis has long been interested in the therapeutic potential of RNAi, but the company entered the field in earnest in 2005 when it forged a broad three-year collaboration with Alnylam Pharmaceuticals. Under that deal, Novartis bought a nearly 20 percent stake in Alnylam while picking up exclusive access to its RNAi technology and intellectual property for use against up to 31 predefined disease targets.

Novartis agreed to extend the deal for two additional one-year periods. But upon expiration of the alliance in 2010, it decided not to exercise an option that would have given it non-exclusive access to Alnylam's RNAi expertise against any target in exchange for $100 million.

Among industry watchers, the decision raised concern about the future of RNAi as a therapeutic modality — a sentiment that only grew when Roche announced later that year that it was completely shutting down its own expansive RNAi-related R&D programs and Pfizer disclosed in early 2011 that it was closing down its oligonucleotide therapeutics unit.

At that time, Novartis and Merck, which paid $1.1 billion to buy Alnylam competitor Sirna Therapeutics in 2007, were the only two big pharmas left with significant internal RNAi operations. That all changed earlier this year when Merck disclosed that it was selling off its RNAi assets to Alnylam for $175 million in stock and cash.

Despite its decision to dial down its RNAi programs, Novartis still holds onto the rights to use Alnylam's technology against the 31 targets covered under their one-time partnership, the company spokesperson noted.

And as work continues on those targets, albeit by a downsized research team, Novartis will also considering partnering opportunities in the space, the spokesperson added.

Indeed, while big pharmas have largely halted investments in their own RNAi and RNA drugs programs, in many cases these companies have shifted back to a more traditional model in which early-stage R&D is conducted by small biotechs, which then partner or license out promising clinical candidates.

For instance, in late 2011 Pfizer announced that it would acquire antisense firm Excaliard and its investigational anti-scarring drug portfolio, despite having closed its oligo unit earlier that year.

And in January, Sanofi subsidiary Genzyme inked a deal to acquire the rights to Alnylam's existing and future genetic disease therapies outside North America and Western Europe in exchange for a $700 million equity investment.

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