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Rosetta, Eyeing IPO in 07, Plans to Partner On miRNA Dx, Tx R&D; IP to Drive Alliances

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CAMBRIDGE, Mass. • In line with its goal to become a US-based, publicly listed developer of microRNA-based diagnostics and therapeutics, Israel's Rosetta Genomics has begun setting up operations in New Jersey and has launched a program to find collaborators from academia and industry, RNAi News has learned.

Rosetta, which plans to launch an initial public offering in 2007, is also keeping its eyes open for companies that might want to license certain aspects of its intellectual property estate, which Chairman and CEO Isaac Bentwich told RNAi News this week is broad enough to give the company a claim to a large majority of all miRNA research and development efforts.

Although it was about a decade ago that the first microRNA was discovered, interest in the field has only recently started to become widespread as it becomes clear that the small, non-coding RNAs play a significant role in cellular processes. But for Rosetta, miRNAs have been the key focus since its inception in 2000.

"We started out in 2000 by developing technologies that allow us to detect microRNAs," Bentwich told RNAi News on the sidelines of the Nucleic Acid World Summit here this week. "We did that until 2002 [and then] dedicated the next three years to perfecting it and hunting microRNAs. And we've done that too • we've identified what seems like the majority of microRNAs in humans."


"Rosetta will have ownership of 50 to 80 percent of the microRNAs in the world [based on its US and international patent filings.] The patents we have filed basically claim anything and everything beyond the 200 [miRNAs] that were found by others."

According to Bentwich, Rosetta used an internally developed bioinformatics platform to scan the entire human genome and identify about 6,000 likely miRNAs. Nearly 200 were sequenced and confirmed as human miRNAs, and the company is in the process of validating another 300. In the end, he said, Rosetta anticipates that as many as 1,000 human miRNAs will be identified.

Ultimately, "Rosetta will have ownership of 50 to 80 percent of the microRNAs in the world" based on its US and international patent filings, Bentwich said. "The patents we have filed basically claim anything and everything beyond the 200 [miRNAs] that were found by others.

"The proportion of [which miRNAs Rosetta owns] is a function of how many microRNAs there are," he added. "If there are indeed 1,000 microRNAs • and this is the common view right now • then we will have 800. But even if we don't go to that extreme, right now half of everything is ours."

With this IP portfolio, which is primarily patent applications at this point, Rosetta is embarking on the second stage of a three-platform strategy that consists of developing miRNA research kits, then miRNA-based diagnostics, then miRNA-targeted therapeutics • all in collaboration with partners, Bentwich said. "We are always going to do these things, at this stage, through collaboration," he noted.

In September, Rosetta reached its first goal when it signed a deal under which Ambion would create research kits by adapting its miRNA platforms to detect, quantify, and functionally characterize Rosetta miRNA sequences. Bentwich noted that the first kit from this arrangement is on the market, and that Rosetta anticipates it will see between $2 million and $5 million from the deal "in the coming years."

Now, he said, Rosetta is negotiating deals with other companies to co-develop miRNA diagnostics.

"We're going to focus on diagnostics [next] because that is something we can take to market very quickly," Bentwich said. "We have reason to believe, based on our discussions with strategic partners, that … it is reasonable to expect something to [reach the market] in two years … [which will] provide revenues, as well as validation of the technology."

Although evidence cropping up suggests that miRNAs have a part in diseases ranging from obesity and diabetes to genetic disorders, Bentwich said, cancer will be the initial focus of Rosetta's diagnostic-development work.

"MicroRNAs are excellent biomarkers for cancer • there is no doubt," he said, citing a paper by the Broad Institute's Todd Golub and colleagues in June's Nature describing how the use of a bead-based flow cytometric miRNA-expression profiling method determined that miRNA expression could be used to classify cancers. Bentwich also pointed to a paper in the Oct. 27 issue of The New England Journal of Medicine by Ohio State University researchers that found that miRNA expression profiles can be used to distinguish normal B cells from malignant B cells in patients with chronic lymphocytic leukemia.


"We're not going to re-invent the wheel. We realize this is a complex question, and we're only going to do it in collaboration with laboratories and companies that are leaders in this field."

"For diagnostics, cancer is first and foremost," Bentwich said. "The question is, 'What type of cancer?' Right now we're … doing initial studies on several types of cancer including lung and prostate." Beyond this, Bentwich said that Rosetta will explore other diseases where miRNA-based diagnostics could prove valuable • again through collaborations such as the one the company has established with Columbia University's Oliver Hobert, who published a paper in the Proceedings of the National Academy of Sciences in August describing two miRNAs that control a neuronal cell fate decision in C. elegans.

Rosetta's third goal • and the one that holds the promise of the biggest payoff • is to develop miRNA-targeted therapeutics, conducting research and development through phase II testing before out-licensing the drug candidate to a bigger player.

"Work on therapeutics is something that is a second priority [to diagnostics, but] we're doing it in parallel," Bentwich said. "We have initial proof-of-concept [in vitro data on] suppressing growth of prostate [tumor] cells, and we will be announcing, hopefully, some relevant information on a commercial collaboration that we expect to achieve relating to this therapeutic effort shortly."

It is perhaps in the drugs field that Rosetta's overarching collaboration strategy will be most vital. Despite its promising in vitro data, Bentwich noted that the company has done no in vivo work related to miRNA therapeutics. In fact, targeting miRNAs in vivo has been a particular challenge for all researchers • although a new class of oligo's from the lab of Rockefeller University and Alnylam collaborator Markus Stoffel may change that (see story, this issue).

When asked if Rosetta had any in vivo miRNA-silencing technologies in the hopper, Bentwich declined to comment specifically, but said that the company's approach to the issue would be to "collaborate and use whatever is the best technology.

"We're not going to do anything on our own," he added. "We're not going to re-invent the wheel. We realize this is a complex question, and we're only going to do it in collaboration with laboratories and companies that are leaders in this field."

Prepping for an IPO

Amidst its efforts to carry through with its plans, Rosetta is also preparing for a planned IPO in 2007 as it sets up shop in the US (although it plans to maintain R&D operations in Israel). Bentwich said that the company has met with investment bankers and expects to be able to float its shares publicly if it can meet certain milestones.

Firstly, the company needs to "have three or four … significant, money-making deals with leading biotech and major pharma companies for the co-development/licensing of our microRNAs [for] diagnostics and/or therapeutics," he said, adding that having commercialized at least one diagnostic is not a prerequisite for an IPO.

Secondly, the company needs to have its IP claims granted as patents, "or at least [show] some indication of progress in this direction," he said. Finally, Rosetta needs to establish "a broad net of collaborations with academia," and to have market conditions be right for a public offering.

Although collaboration is a key aspect of Rosetta's long-term plans, Bentwich noted that the company remains interested in licensing opportunities for its IP in areas that are determined to be outside of its core focus. Additionally, he said the company would consider joint ventures or "a partial M&A of this or that division of Rosetta. We're definitely looking to segregate what we have and leverage it separately to separate players."

- Doug Macron ([email protected])

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