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For Some RNAi Rx Shops, Industry Deals with Bigger Players are Par for the Course

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By Doug Macron

Securing partnerships with bigger, well-financed companies has long been the lifeblood of those developing new technologies, and players in the RNAi space have been no exception to the rule.

But while many firms have successfully met their goals of allying with big pharmas and biotechs, others have failed to do so, despite promises of forthcoming deals.

Undoubtedly, when it comes to partnering, the most successful RNAi shop has been Alnylam Pharmaceuticals. In addition to numerous licensing deals for access to its RNAi-related intellectual property for both research and drug-development applications, Alnylam has forged at least eight strategic alliances with major biopharmaceutical firms.

In 2003, Alnylam became the first RNAi company to find a big pharma partner when it struck a five-year deal with Merck (see RNAi News, 9/12/2003). Less than a year later, the companies signed another deal, agreeing to work together on ocular diseases (see RNAi News, 7/2/2004).

Ultimately, the relationship between Alnylam and Merck began to fall apart, and the two agreed to end their alliance in late 2007 (see RNAi News, 9/20/2007), a move in no small part tied to Merck’s acquisition of Alnylam rival Sirna Therapeutics (see RNAi News, 11/2/2006).

Despite losing its first key partner, Alnylam has continued to find parties interested in joining forces. In September 2005, Alnylam announced that it had inked a broad drug-discovery and -development deal worth up to $700 million with Novartis Pharmaceuticals (see RNAi News, 9/9/2005). As part of that arrangement, Novartis took a 19.9 percent equity position in Alnylam, although that stake has since fallen to around 13 percent.

Novartis recently exercised its option to extend the arrangement, originally a three-year deal, for a fifth and final year (see RNAi News, 7/23/2009).

Alnylam’s next big deal came in 2007, when it agreed to provide Roche with a non-exclusive license to its RNAi IP for use in developing various siRNA-based therapeutics (see RNAi News, 7/20/2007). The arrangement, which has a potential value of $1 billion, included Roche’s purchase of Alnylam’s German subsidiary and its 40 employees.

A similar deal was signed about a year later with Japan’s Takeda Pharmaceutical, which included non-exclusive access to Alnylam’s IP and carries a potential value of $1 billion for Alnylam (see RNAi News, 5/29/2008).

In mid-2008, Alnylam found a commercialization partner for its phase II respiratory syncytial virus therapy ALN-RSV01 in Kyowa Hakko Kogyo, which took the rights to the drug in Asian markets (see RNAi News, 6/19/2008). Then, early this year, Alnylam announced that Cubist Pharmaceuticals had acquired the rights to ALN-RSV01 in all other markets outside of Asia (see RNAi News, 1/15/2009).

In addition to these deals, Alnylam has ongoing drug-development arrangements with Medtronic (see RNAi News, 2/11/2005) and Biogen Idec (see RNAi News, 9/21/2006).

Also finding success on the partnering front its Canada’s Tekmira Pharmaceuticals, formerly Protiva Biotherapeutics, based on the strength of its stable nucleic acid-lipid particle delivery technology.

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Tekmira’s most important partner has thus far been Alnylam, which originally licensed the SNALP technology from Protiva predecessor Inex Pharmaceuticals (see RNAi News, 3/30/2006). Inex later restructured into Tekmira, which eventually merged with Protiva (see RNAi News, 4/3/2008).

Thus far, Alnylam has opted to use the SNALP technology in its phase I liver cancer program (see RNAi News, 4/9/2009) and its newly announced IND-track program in TTR amyloidosis (see RNAi News, 8/13/2009).

Meanwhile, Roche, which first gained access to SNALPs through its alliance with Alnylam, recently signed a deal with Tekmira to use the technology in its first two RNAi-based clinical candidates (see RNAi News, 5/14/2009).

Prior to its merger with Tekmira, Protiva also granted a non-exclusive license to the SNALP technology to Sirna as part of a deal settling litigation between the companies (see RNAi News, 10/18/2007). That deal remains in effect, although Sirna has yet to indicate that it plans to use the technology.

Smaller, privately held companies playing in the RNAi drug field have also managed to attract big partners, including Cequent Pharmaceuticals, which is developing an RNAi drug-delivery technology that involves engineering non-pathogenic bacteria to express shRNAs.

In 2007, Cequent pulled in an additional $3 million from the Novartis Option Fund as part of a Series A financial round (see RNAi News, 6/21/2007). As part of the deal, Novartis picked up an option to acquire Cequent’s lead inflammatory bowel disease program, although that option has not yet been exercised.

In early 2008, Tacere Therapeutics became the first company to find a big pharma partner for an expressed RNAi drug, when it announced that Pfizer had licensed its preclinical hepatitis C drug TT-033 (see RNAi News, 1/10/2008). Tacere had previously licensed the Asian rights to the drug to Oncolys BioPharma (see RNAi News, 6/21/2007).

Also finding a partner in Pfizer is Quark Pharmaceuticals, which in 2006 licensed the proprietary human gene target RTP-801 to Pfizer for certain diseases including wet age-related macular degeneration (see RNAi News, 9/28/2006). Pfizer also acquired from Quark an siRNA drug that inhibits the target, known as either RTP-801i or PF-04523655, which is now in phase I testing for AMD and diabetic macular edema.

Falling Short

While just about every RNAi drug developer has expressed a desire to strike a partnership with a big pharma or biotech, not all have managed to pull it off.

Perhaps most notable is Arrowhead Research subsidiary Calando Pharmaceuticals. Despite a series of cost-cutting steps taken by Arrowhead across all its units, the company has struggled to stay afloat in treacherous financial waters.

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Most recently, Arrowhead said that it has closed Calando’s laboratory (see RNAi News, 8/13/2009), and previously the company said that Calando would cease all research and development activities once a phase I trial of its siRNA cancer drug CALAA-01 was completed.

As early as last December Arrowhead had cautioned that it would scale back Calando’s operations unless a money-making deal, such as a collaboration or licensing deal for CALAA-01, could be forged (see RNAi News, 12/18/2009).

And despite indications from Arrowhead’s management that such an event is on the horizon, nothing yet has been announced, at least in regards to Calando’s RNAi activities. Most recently, Arrowhead President and CEO Christopher Anzalone said that upcoming phase I data on CALAA-01 is expected to help drive such a deal.

Also under the gun is gene therapy firm Targeted Genetics, which had been working with Sirna on an siRNA-based treatment for Huntington’s disease but received the full rights to the program after Merck deemed the effort as outside of its core focus (see RNAi News, 4/10/2008).

At the time, Targeted Genetics had projected that the Huntington’s disease program could reach the clinic by 2009, but only with the help of a partner. But a dwindling cash position and its inability to form any strategic alliances forced the company to virtually halt all R&D.

For months, Targeted Genetics had been warning that it would not have enough resources to make it through 2009 (see RNAi News, 11/13/2008), and last week the company confirmed that it has been unable to raise desperately needed money and would be forced to begin winding down its operations at the end of August.

Although it is not facing the kind of financial trouble plaguing Targeted Genetics or Calando, RXi Pharmaceuticals has thus far come up short in meeting its partnering promises.

Last year during an investor meeting, RXi’s CFO Stephen DiPalma said that the company was close to signing a deal with its first partner and expected to do so before the end of 2008. He added that a second deal was expected in 2009.

No such arrangement materialized last year, and thus far in 2009 the company has been quiet about the potential for any kind of deal. Company officials were not available for comment, but in a filing with the US Securities and Exchange Commission last week, RXi said that its “principal activities have consisted of … conducting business development activities aimed at establishing development partnerships with pharmaceutical and larger biotech companies,” among other things.

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