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As RNAi Therapeutics Field Matures, Some Early Players Depart Amid M&As

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In the seven years since Science magazine declared RNAi its breakthrough of the year, the gene-silencing technology has grown into one of the highest profile areas of biotechnology.
 
At the same time, the commercial corner of the science has experienced its share of growing pains and has seen a number of players disappear, mostly through mergers and acquisitions.
 
One such company is Sirna Therapeutics, which holds the title for executing the most successful exit from the RNAi drugs scene. Once the top rival to RNAi juggernaut Alnylam Pharmaceuticals, Sirna had a wet age-related macular degeneration drug in phase I testing, which was ultimately licensed to Allergan (see RNAi News, 10/7/2005), and a number of preclinical drugs moving through its pipeline when it agreed in late 2006 to sell itself to Merck for $1 billion (see RNAi News, 11/2/2006).
 
At the time, Sirna Vice President of legal affairs Bharat Chowrira told RNAi News that the RNAi shop hadn’t been looking for an acquirer, but that Merck’s offer of $13 per share in cash — a 100 percent premium over Sirna’s stock price at the time — proved too sweet to turn down.
 
“Ultimately, what we do is build shareholder value,” Chowrira said at the time. “And when the shareholders are going to realize a 100 percent premium [through a buy-out offer], it’s hard not to take it seriously.”
 
Currently, Sirna operates as Merck’s Center of Excellence for RNA technology. Although the company had been pursuing a number of different indications before it was bought, Merck has remained tightlipped on the status of those efforts other than its Huntington’s disease program, which was handed off to partner Targeted Genetics earlier this year (see RNAi News, 5/8/2008).
 
Other companies that have been transformed through acquisitions include Germany’s Atugen and Acuity Pharmaceuticals.
Atugen was originally a spin out of Ribozyme Pharmaceuticals (which later become Sirna) focused on drug discovery and target validation. In early 2004, the company began working in the RNAi therapeutics field (see RNAi News, 2/12/2004), but mounting expenses eventually prompted the company to seek a buyer.
 

“Ultimately, what we do is build shareholder value. And when the shareholders are going to realize a 100 percent premium [through a buy-out offer], it’s hard not to take it seriously.”

By mid-2005, Atugen had been acquired for $7.5 million by British biotech SR Pharma (see RNAi News, 7/29/2005), which two years later changed its name to Silence Therapeutics to reflect its new identity as a pure-play RNAi drug developer (see RNAi News, 4/5/2007).
 
Silence currently expects to move its first in-house drug candidate, Atu-027, a treatment for gastrointestinal and pancreatic cancer, into phase I testing this year (see RNAi News, 1/17/2008).
 
Meanwhile, Acuity Pharmaceuticals was acquired by Opko Health early last year, in part because of its wet AMD drug bevasiranib, which was the first RNAi drug candidate to reach phase III testing (see RNAi News, 3/29/2007).
 
Like Acuity, Opko bills itself as an ophthalmics firm with interests that include small-molecule drugs and instrumentation. But RNAi appears to remain a top priority for the firm; earlier this month, Samuel Reich, executive vice president of Opko’s ophthalmics division, told RNAi News that in addition to bevasiranib, the company has several other early-stage programs utilizing the gene-silencing technology (see RNAi News, 6/5/2008).
 
Disappearing Act
 
Not all departures from the world of RNAi have been as graceful as Sirna’s, Atugen’s, and Acuity’s.
 
One example is Galenea, which was created in 2003 with a dual focus of siRNA therapeutics for influenza and calcineuron-related therapeutics for cognitive disorders (see RNAi News, 10/15/2004).
 
Despite the early work of one of its founders in using RNAi to target the flu virus, the company found itself going head-to-head with Alnylam Pharmaceuticals, a potential partner that later declared its intention to develop a drug for the virus on its own (see RNAi News, 6/3/2005).
 
Before Alnylam shelved its flu program in 2007 (see RNAi News, 8/16/2007), Galenea ran into trouble competing with its bigger rival for key government funding while keeping its attention on two separate fields at the same time. By early 2006, the company had sold off its RNAi assets to Nastech Pharmaceutical (see RNAi News, 2/23/2006).
 
Earlier this month, Nastech changed its name to MDRNA to reflect its new focus on RNAi after its non-RNAi efforts ran aground (see RNAi News, 6/12/2008).
 
Also looking to bow out of the RNAi drugs space is Nucleonics, which recently began shutting itself down amid financing difficulties.
 
As reported by RNAi News last week, the company has been unable to raise significant additional capital since closing a $50 million Series B round in 2004, prompting it to lay off almost its entire staff, begin selling off its laboratory equipment, and start searching for a buyer for its technology and intellectual property (see RNAi News, 6/19/2008).
 
At the same time, Nucleonics halted enrollment in a phase I trial of its lead product candidate, an expressed RNAi treatment for hepatitis B termed NucB 1000. Nucleonics President and CEO Robert Towarnicki told RNAi News that re-starting the trial will depend on “a potential acquirer’s interest in whether they will move that [program] forward or not.”
 
Spin Cycle
 
Taking a different path away from the RNAi drugs arena was CytRx, which was one of the earliest companies to begin working in the space when it licensed the rights to key University of Massachusetts RNAi-related intellectual property in the areas of obesity, type II diabetes, and amyotrophic lateral sclerosis in early 2003.
 
A couple of years later, however, the company had begun to shift its attention away from the gene-silencing technology and onto nearer-term opportunities with small molecules and vaccines. As first reported by RNAi News, CytRx President and CEO Steven Kriegsman began weighing the possibilities of spinning out the company’s RNAi assets as early as 2005 (see RNAi News, 11/11/2005).
 
Though it had trouble finding the cash to do so, CytRx eventually spun out its RNAi operations into RXi Pharmaceuticals early last year (see RNAi News, 1/11/2007). By March of this year, RXi had begun trading on the Nasdaq exchange and disclosed its intention to file its first investigational new drug application in 2009.
 
CytRx, meanwhile, continues to operate as a small-molecule drug developer.

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