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Three RNAi, miRNA Firms Record Strong Gains in Stock Value Since the End of 2008

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Despite continued weakness in the economy, which has battered shares of virtually all public biotechnology and pharmaceutical firms, three of the publicly traded players in the RNAi and microRNA space have seen significant gains in the value of their stocks in recent months.

Perhaps the most significant increase was recorded by Israeli miRNA specialist Rosetta Genomics, which went public in early 2007 (see RNAi News, 3/1/2007). Although the company's shares remain well off their initial public offering price of $7 each, they have advanced significantly since Dec. 31, when they were trading at around $1.18.

On Monday, Rosetta shares closed at $3.15 apiece.

Helping to fuel investor interest in the stock has been Rosetta's successful commercialization of three miRNA-based diagnostics, making the company one of the first to start realizing value from the nascent technology. By the end of 2008, the company had launched miRview Meso, which differentiates lung cancer from mesothelioma; miRview Mets, designed to determine the source of cancers of unknown primary origin; and miRview Squamous, which differentiates squamous from non-squamous non-small cell lung cancer (see RNAi News, 12/31/2008).

Importantly, Rosetta has also met a key goal of finding a US marketing partner for the diagnostics in Prometheus Laboratories, which picked up the exclusive rights to sell the tests domestically in exchange for milestones or research funding, as well as royalties on product sales (see RNAi News, 4/16/2009). Prometheus also agreed to take a roughly 14 percent stake in Rosetta under a separate arrangement.

The deal, which follows a similar arrangement with Teva Pharmaceuticals for the Israeli and Turkish rights to the tests (see RNAi News, 1/8/2009), is expected to free Rosetta to focus on its newly defined priority of non-invasive tests designed to screen for, rather than diagnose, disease.

Also gaining ground have been shares of MDRNA, which has faced an uphill climb since its creation out of failed intranasal drug-delivery firm Nastech Pharmaceutical (see RNAi News, 8/7/2008).

Although the company has struggled under corporate restructuring costs and limited cash resources, with new management and a new focus on RNAi therapeutics, MDRNA has been able to ink a series of money-making deals that have encouraged Wall Street. On Monday, shares of MDRNA closed at $0.76 each, up from a closing price of $0.34 a share at the end of December.

In February, the company licensed a portion of its technology platform to Roche in exchange for an undisclosed one-time, non-refundable licensing fee (see RNAi News, 2/19/2009). About a month later, MDRNA non-exclusively licensed its liposomal-based siRNA-delivery platform to Novartis in exchange for an upfront payment of $7.25 million (see RNAi News, 3/26/2009).

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MDRNA has also been able to eke additional value out of the assets inherited from Nastech. Earlier this month, the company sold off its Hauppauge, NY-based contract manufacturing facilities, as well as an abbreviated new drug application for a non-RNAi product, to Par Pharmaceuticals (see RNAi News, 4/2/2009).

Although terms of that deal were not provided at the time, in its annual report filed with the US Securities and Exchange Commission this month, MDRNA said that it received an upfront payment from Par and stands to receive a portion of the profits related to the non-RNAi product for five years.

Additionally, MDRNA has taken steps to control its costs, namely the narrowing of its pipeline to a single indication: liver cancer. When the move was announced last month, MDRNA President and CEO Michael French noted that the company deemed it "somewhat irresponsible and impractical" to sustain a multi-indication pipeline in a difficult financial climate.

Another RNAi drug shop that has seen its stock regain some of its lost value is Vancouver, British Columbia-based Tekmira Pharmaceuticals, which joined the RNAi drugs race last summer when it was created out of the merger of Protiva Biotherapeutics and Inex Pharmaceuticals (see RNAi News, 6/5/2008).

Although shares of Tekmira have been hit hard, falling to CDN$0.38 ($0.31) on Dec. 31 from a 52-week high of CDN$1.45 just after the merger, they have since rebounded and closed at CDN$0.86 Monday on the Toronto Stock Exchange.

Contributing to the increase has been Tekmira's move to develop its own RNAi therapeutics, rather than just enabling delivery technologies. This month, the company announced that it had filed an investigational new drug application for an siRNA-based treatment for elevated low-density lipoprotein levels (see RNAi News, 4/16/2009). A phase I study of the drug candidate is expected to begin around the middle of the year.

At the same time, Tekmira continues to generate revenues through partnerships related to its delivery expertise. Among the company's publicly disclosed collaborations are ones with Bristol-Myers Squibb (see RNAi News, 3/26/2009); Johnson & Johnson Pharmaceutical Research & Development, which has been using SNALPs to deliver siRNAs against targets in the liver; Alnylam Pharmaceuticals, which recently confirmed that it would use SNALPs in its liver cancer program (see RNAi News, 11/13/2008); and Roche.

Overall, between Dec. 31 and April 27, the stock prices of Rosetta, MDRNA, and Tekmira have increased 167 percent, 124 percent, and 126 percent, respectively. By comparison, the Nasdaq Biotechnology Index has risen just 8.5 percent, from $672.37 to $729.54, over the same period.

But not every publicly traded, pure-play RNAi shop has made such headway.

Alnylam Pharmaceuticals, while still king of the RNAi hill, has seen its shares tumble 31 percent since the end of 2008, from a closing price of $24.73 a share on Dec. 31 to $17.04 on Monday. Shares of RXi Pharmaceuticals, meanwhile, have slid about 17.5 percent over that time period, from $5.75 to $4.74.

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