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RNAi Drug Industry Sees Management Changes Over Past Year Amid Challenging Business Climate

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By Doug Macron

As the RNAi therapeutics field deals with the growing scrutiny of would-be investors and pharmaceutical industry partners, the wave of management shake-ups that swept the industry over the past few years (GSN 7/15/2010) continues, with key executives from at least four firms working on the technology having stepped down over the past 12 months.

Among the companies experiencing the changes are RXi Pharmaceuticals, Alnylam Pharmaceuticals, Silence Therapeutics, and Traversa Therapeutics.

When RNAi made its first big splash in 2002 in being named breakthrough of the year by Science, enthusiasm for the gene-silencing technology was high and there was no shortage of interest.

For example, Alnylam pulled in $26 million through an initial public offering in 2004, and forged a drug-discovery deal with Novartis the next year that included a $56.8 million upfront investment. In 2006, Merck bought Sirna Therapeutics for $1.1 billion, and soon thereafter licensed its technologies to Roche for $274 million upfront.

But after RNAi failed to live up to lofty expectations, partnerships such as these began to disappear. Last year, Novartis said that it would not exercise an option to pick up additional access to Alnylam's technology, and Roche announced it was pulling out the RNAi drugs space altogether. Another big pharma that had embraced RNAi, Pfizer, soon followed, shuttering its oligonucleotide therapeutics unit, which handled RNAi.

Wall Street has been hard on RNAi therapeutics, as well. Shares of Alnylam were trading this week around $8.86, down from a 52-week high of $16.36, and far from the more than $35 the stock was selling for in mid-2008. Marina Biotech's stock, meantime, is selling for around $0.25 a share, compared with more than $5 in April last year; and shares of RXi are trading at less than $1, versus a 52-week high of $4.08.

Amid such changes outside of their walls, a number of RNAi drug shops are experiencing shifts internally, as well.

Among them is RXi, which earlier this year underwent a significant reorganization after acquiring peptide-based immunotherapy firm Apthera in a deal that expands its pipeline beyond RNAi (GSN 3/31/2011). The deal put Apthera's phase II cancer immunotherapy NeuVax at the head of RXi's development pipeline, and bumped most of the company's RNAi-related projects onto the backburner. RXi is still focused on moving its preclinical siRNA-based anti-scarring drug RXI-109 into the clinic next year, however.

As part of the transaction, RXi board member Mark Ahn took over as president and CEO of the company, replacing Noah Beerman, who had only been with RXi since November 2009 when he replaced company co-founder Tod Woolf (GSN 11/12/2009).

Also seeing the departure of its top executive is Traversa, whose founding President and CEO Hans Petersen quietly stepped down last October.

Company officials have previously declined to comment on the departure, stating only that Petersen's duties were being handled by Curt Bradshaw, vice president of research and development, while a new CEO is sought.

However, Petersen had told Gene Silencing News about a year ago that the company was in need of additional capital to fund its in-house drug-development programs, and indicated that its current cash position would only last through the third quarter of this year (GSN 4/1/2010).

Traversa has not made any announcements regarding funding since, although it did secure nearly $500,000 in grants from the Internal Revenue Service late last year under the Qualifying Therapeutic Discovery Project Program that was created by the Patient Protection and Affordable Care Act of 2010.

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Alnylam has also undergone some changes at the executive level, with CSO Kenneth Koblan stepping down this month to “return to big pharma … for personal reasons,” according to CEO John Maraganore (GSN 6/09/2011).

Koblan's decision comes as Alnylam fends off litigation filed by partner Tekmira Pharmaceuticals that charges Alnylam with misappropriation of trade secrets and other confidential information related to lipid delivery technologies (GSN 3/17/2011). Tekmira recently expanded the suit to include Canadian start-up AlCana Technologies (GSN 6/9/2011).

Notably, before Koblan joined Alnylam in late 2010, the company had been without a CSO since August 2009, when John Schmidt departed. It is not clear whether Alnylam will replace Koblan; a week after his resignation was announced, the company said it had promoted Akshay Vaishnaw, its senior vice president of clinical research, to the newly created position of chief medical officer.

One management change-up that is still in the works is at Silence, which is undergoing a corporate reorganization that will include the closing of its California-based location and the replacement of its CEO Phil Haworth.

Silence, which is headquartered in England and has research and development operations in Germany, established a US presence through its acquisition of Intradigm in 2009. The cost of doing business in three countries, however, has proven too much.

After negotiations with an unnamed party regarding a potential merger or acquisition fell through earlier this year (GSN 2/20/2011), Silence announced that it would restructure itself as a European firm as “the geographical diversity of the group creates considerable operational difficulties, as well as increased operating costs.”

As part of the move, Haworth, who is based in California, agreed to step down. He remains at the company until a replacement is found.


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