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Sirna Q2 Losses Rise as Company Spends Ahead Of HCV Phase I Trial; Officials Give Study Details

Sirna Therapeutics this week released its second-quarter financial results, posting higher losses amid a sharp drop in revenues and an increase in research and development spending as it prepares for a phase I trial of an RNAi-based hepatitis C therapy, Sirna-034.
During a conference call to discuss Sirna’s finances, President and CEO Howard Robin said that the company remains on track to file an investigational new drug application for Sirna-034 before the end of the year.
“Sirna is on the eve of the next major industry advancement in RNAi therapeutics: the first human clinical trial of a systemically delivered siRNA,” he said.
Also during the call, Roberto Guerciolini, Sirna’s chief medical officer, provided some details on how the first clinical trial of the HCV drug will be structured, while CSO Barry Polisky touched on the company’s recent work with its so-called multifunctional siRNAs.
The Numbers
Sirna’s net loss in the second quarter rose to $10.1 million, or $0.15 per share, from $6 million, or $0.14 per share, in the year-ago quarter.
Revenues in the quarter slipped to $900,000 from $1.5 million a year earlier, although the company noted that deferred revenues from collaborations totaled $10.9 million.
Driving up Sirna’s losses was a surge in second-quarter operating expenses to $11.7 million from $7.6 million in the same period last year. Contributing to the cost increases was $900,000 in share-based employee compensation, as well as increased general and administrative costs, which jumped to $3.9 million from $1.6 million. Sirna noted that the G&A expenses in part reflect the cost of relocating its core scientific teams out of Boulder, Colo., to its new San Francisco headquarters.
Also driving up costs was a spike in R&D spending, which climbed to $6.9 million from $4.8 million.
“An awful lot of spending this quarter went into the toxicology programs for HCV and the preparation of manufacturing clinical materials for the clinical trial,” Robin said during the conference call. “Those were the two … largest causes of our increased expense this quarter.”
He noted that Sirna also has ongoing work in permanent hair removal and Huntington’s disease, and that the company has started programs in diabetes, which is expected to drive up the company’s burn rate in the future. However, given the early-stage nature of these projects, Robin said that Sirna’s anticipated 2006 burn rate of $30 million to $33 million “should continue on next year as well.”
Sirna finished the second quarter with no debt and $92.2 million in cash, cash equivalents, and securities available for sale. The company’s cash position includes $47.4 million in net proceeds from the company’s follow-on stock offering, which closed in May, and $12 million in cash received from GlaxoSmithKline as part of the companies’ respiratory partnership announced in April (see RNAi News, 4/6/2006).
Robin noted during the conference call that Sirna continues to anticipate forming an additional collaboration before the end of 2006. “We continue to find the pharmaceutical industry extremely receptive to our RNAi-based therapeutic platform, and we’re engaged in discussions with multiple companies who are leaders in their respective therapeutic areas,” he said.
Robin has previously stated that Sirna intends to pursue alliances focused on narrow therapeutic areas (see RNAi News, 4/27/2006), but during this week’s conference call he did not provide details on what disease area the upcoming partnership may cover.
The Pipeline
Sirna-034, which has become Sirna’s lead product candidate after the company sold off the rights to its phase I age-related macular degeneration drug to Allergan last year (see RNAi News, 10/7/2005), comprises two siRNAs targeting different highly conserved sequences within the HCV genome. The RNAi molecules are delivered via a home-grown nanoparticle technology.
“We have shown in mouse and non-human primates that these nanoparticles efficiently deliver siRNA cargo to hepatocytes,” Polisky said during the conference call. “Furthermore, we have shown that the intracellular site of delivery in hepatocytes is the cytoplasm, where the siRNA machinery resides.”
He noted that in work done during the second quarter in a non-human primate model of HCV, “we have observed dramatic reduction of HCV-like viral titers. Multiple doses of nanoparticle formulated siRNAs resulted in a 3.5- to 4-log reduction of viral titer with a 4-week duration of effect,” he said.

“We are completing our IND-enabling toxicology studies and [are] currently manufacturing Sirna-034 for the phase I trial,” Polisky added. After filing the IND, Sirna plans to “rapidly initiate our phase I clinical trial.”
Currently, Sirna’s nanoparticle technology is the subject of a lawsuit with Protiva Biotherapeutics, which had at one time been a Sirna partner (see RNAi News, 4/8/2005). The companies’ alliance hit the rocks, however, after word began circulating in the industry that Protiva may not have the full rights to its delivery technology, and Sirna sued Protiva as it withdrew from the partnership (see RNAi News, 3/2/2006).

“An awful lot of spending this quarter went into the toxicology programs for HCV and the preparation of manufacturing clinical materials for the clinical trial. Those were the two … largest causes of our increased expense this quarter.”

Sirna officials made no mention of the litigation, which is currently slated for out-of-court mediation, during the conference call. They did, however, provide some information on how the planned phase I study of Sirna-034 is to be structured.
Guerciolini noted that the trial will examine the RNAi drug as a monotherapy in patients with “genotype-1 HCV infection [who are] refractory … to conventional therapy. Those are patients with active disease [who] have been receiving treatment.”
He said that the clinical study has two components, the first of which is “a single ascending dose component … which will inform us about the extent of the viral load reduction and the duration of the viral load reduction. That will be the basis for the second part of the study, a so-called multiple ascending dose study, which will contain five doses over a possible four-week period.
“We have an adaptive design for the second part of the study, which [gives us] the option to go on a weekly basis or a more infrequent basis if the single ascending dose [demonstrates] a long-lasting effect [of the drug],” Guerciolini said.
In response to an analyst’s question, Polisky added that Sirna has also begun “studies to develop both a subcutaneous form of delivery of [Sirna-034] and, subsequently, an oral form of this material down the road. But those studies are in very early stages,” he noted.
Polisky also said that Sirna has been working on its multifunctional siRNA compounds during the second quarter and has “demonstrated that size-optimized, chemically modified multifunctional siRNAs can function in vivo to reduce target RNA levels.”
Multifunctional siRNAs are essentially siRNAs modified in such a way that both the sense and antisense strands can be used to each silence a distinct gene.
Late last year, Polisky told RNAi News that Sirna was conducting in vivo work with the molecules and preparing to submit the data to peer-reviewed journals (see RNAi News, 11/25/2005). Earlier last year, Robin had told RNAi News that the company was exploring the use of multifunctionals in a variety of indications, but that "first place you'll [likely] see it in a significant way is in asthma,” (see RNAi News, 11/11/2005).

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