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Quark Sees Nitto Denko Deal as 'Harbinger' of Future Partnerships

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By Doug Macron

With freedom to operate in the RNAi therapeutics space and an established presence in Japan, Quark Pharmaceuticals sees its recent drug-development deal with Nitto Denko as an indicator that additional partnerships in the Asian market are forthcoming, a company official told Gene Silencing News this week.

"We are looking at the Nitto Denko deal as, hopefully, a harbinger of additional deals," Quark CEO Daniel Zurr said. "We do have the freedom to operate [with our intellectual property] in the siRNA space. This is the first deal [in which] we are actually using it, and it’s a validation that we have such a position."

Under the deal, announced last month, Quark and Nitto Denko will develop siRNA-based drugs for fibrotic diseases (GSN 7/15/2010). The arrangement will join Quark's RNAi expertise and technology with Nitto Denko's drug-delivery technologies.

According to Zurr, Nitto Denko will fully fund all research related to the collaboration up until the investigational new drug application-filing stage, at which point the companies will negotiate the details surrounding the clinical development and commercialization of any resulting drug candidates.

Key to the deal, he noted, is Quark's patent position, which allows the company to create modified siRNAs that "rely only on our IP. … Because we have our own [proprietary] modifications that give us the freedom to operate … we can prepare a drug ... with no need to take any licenses from a third party."

Zurr said that while the details of Quark's proprietary RNAi molecules have not been disclosed publicly, they comprise "many different structures" incorporating a variety of chemical modifications.

"There is no kind of generic modification that you can apply to every sequence," he explained. "You actually have to tailor-make the modifications to the sequences.

"Some companies say they have a [single] generic modification … [but this is] a fallacy because every sequence needs to [have] its own modification," he added. "Our advantage is that we have a host of chemical modifications, none of [which] infringe [the IP of] Alnylam [Pharmaceuticals] or other companies."

With such freedom to operate, he said, Quark was able to woo Nitto Denko as a partner, and the company expects to be able to do so with additional pharmaceutical firms eyeing the RNAi field.

"We are talking to several companies on similar deals where we use our expertise and freedom to operate," Zurr said. He added that Quark anticipates having an advantage when it comes to partnering in Japan, the world's second largest individual drug market behind the US, given its history in that country.

"We have a long history in Japan with many deals around our gene-discovery program years ago," he said. For instance, in 1999, Quark inked a deal with Fujisawa Pharmaceutical to discover genes as therapeutic targets in stroke. That same year, the company agreed to help Sankyo discover genes associated with type II diabetes.

"So we know the Japanese market quite intimately and have a very good name there. I hope that this [deal with Nitto Denko] will create a kind of snowballing effect in Japan," Zurr said.

For any biotech player, partnerships are a key source of funding, and while Quark closed a $10 million private financing in June (GSN 6/10/2010), the company remains on the lookout for additional money, Zurr noted.

"We are constantly looking for more money," he said. "What is preventing us from increasing our portfolio [of clinical candidates] is cash."

One source of money that remains on Quark's radar is an initial public offering in the US.

About three years ago, Quark filed with US regulators to float its shares on the Nasdaq at between $12 and $14 a share. A few months later, however, the company pulled the plug on the IPO due to unfavorable market conditions and an unwillingness to cut its proposed share price (GSN 8/2/2007).

Since then, the company has kept its IPO plans on the backburner. And while Zurr said this week that Quark remains interested in going public at some point, he noted that "the market is not so great at the moment."

"Of course, the IPO is on the horizon, but the time [right now] is not exactly appropriate," he said.

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