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Tekmira Posts Q1 Profit on Revenue Jump, Updates RNAi Tx Plans and Lawsuit

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Tekmira Pharmaceuticals this week released its first-quarter financial results, just two weeks after having been spun out of Inex Pharmaceuticals with essentially all of the former company’s operations and assets, posting a profit on revenues from collaborations.
 
During a conference call to discuss the firm’s first-quarter performance, Tekmira President and CEO Tim Ruane (who held similar positions at Inex) also provided an update on the company’s nascent RNAi drug efforts, stating that the company expects to announce its first of three planned siRNA projects this year.
 
Earlier this year, as Inex, Tekmira acquired the right to develop three siRNA-based drugs using Alnylam Pharmaceuticals’ intellectual property as part of a broader partnership between the companies under which Alnylam has exclusive rights to Tekmira’s liposomal drug-delivery technology for RNAi therapeutic applications (see RNAi News, 7/20/2006 and 1/11/2007).
 
“The guidance we’ve given … is that by the end of the year we will execute on at least one of the siRNA draft choices,” Ruane said during the call. “It’s difficult to predict whether that will be sooner or later [in 2007, but] we’re committed to doing it at least by the end of the year.”
 
He added that Tekmira is evaluating a “a wide variety of gene targets … and [is] talking with a wide variety of academic institutions and everything from small-cap biotech companies to large pharma to … evaluate” its choices.
 
Although he did not provide any clues as to what kinds of indications Tekmira is considering as part of the target-evaluation process, Alnylam has said before that it limits the licenses it provides to its IP for therapeutic development to disease areas outside of its strategic focus.
 
Among Alnylam’s current pipeline candidates are RNAi drugs for respiratory syncytial virus, influenza, hypercholesterolemia, liver cancer, progressive multifocal leukoencephalopathy, spinal cord injury, Parkinson’s disease, neuropathic pain, and cystic fibrosis, as well as a number of undisclosed indications with collaborators.
 
Ruane also commented on Tekmira’s ongoing legal battle with Inex’s former subsidiary Protiva Biotherapeutics over the ownership of its core delivery technology, stating that the litigation “really has not progressed … since [Protiva] filed suit on us in March 2006.”
 
Protiva was spun out of Inex in 2001 to develop a gene-delivery technology for cancer and inflammatory diseases. That technology was developed into what Protiva calls SNALPs —essentially nucleic acids encapsulated by cationic and fusogenic lipids, which are surrounded by a polyethylene glycol coating to prevent clearance of the positively charged cationic lipid from the bloodstream.
 
Protiva began shopping the technology to potential licensees for use in delivering therapeutic RNAi molecules, and landed Sirna Therapeutics as a partner in 2005. That alliance fell apart about a year later when Sirna sued Protiva for fraud and breach of contract, alleging that Protiva did not own the rights to SNALPs for RNAi applications and that their alliance was therefore terminated (see RNAi News, 3/2/2006).
 
Instead, Sirna claimed, those rights remained with Inex.
 
Since then, Sirna (which is now a subsidiary of Merck) has countersued Protiva, while Protiva has filed lawsuits in both Canada and the US charging Tekmira, as Inex, inappropriately made claims it owned the SNALP technology (see RNAi News, 9/14/2006).
 

“There has been no date for court made in 2007, so we don’t think [the Protiva dispute] is, at this point, a 2007 event, if at all.”

This alleged interference, according to Protiva, led to the end of its deal with Sirna and scared away Alnylam as a possible collaborator.
 
According to Ruane, because its dispute with Protiva has been in a holding pattern, it is “really not an operational or financial focus of [Tekmira]. … There has been no date for court made in 2007, so we don’t think this is, at this point, a 2007 event, if at all,” he said during the conference call.
 
“However, we’ve maintained all along that we’re very comfortable with our legal status, our contractual status, and our rights versus the original spinout of Protiva from Inex and how all those rights fully transfer to Tekmira,” he added. “We will continue to fully exert all of our contractual rights as we are granted … to force Protiva to comply with the full rights and conditions of all of the agreements.”
 
Officials from Protiva were unavailable for comment.
 
First-Quarter Financials
 
For the first quarter, Tekmira posted a net profit of Cdn$700,000 ($636,034), or Cdn$0.02 per share, versus a year-ago loss of Cdn$3.9 million, or Cdn$0.10 per share.
 
Driving the company’s earnings was an increase in revenues, to Cdn$2.9 million from Cdn$100,000 in the first quarter a year earlier, from collaborations with partners including Alnylam.
 
Tekmira’s research and development spending in the first quarter fell to Cdn$1.2 million from Cdn$1.3 million in the same period last year, reflecting a drop in salary expenses with fewer options being issued in the quarter. Tekmira’s R&D staff increased by 11 employees to 28 in the quarter, but the growth occurred toward the end of the three-month period and had little impact on the financials.
 
Tekmira’s first-quarter general and administrative costs, meanwhile, dropped to Cdn$900,000 from Cdn$1.1 million in the same period of 2006.
 
As of March 31, Tekmira had cash and cash equivalents totaling Cdn$27.5 million ($25 million).

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