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Under New Leadership, Dicerna Focuses on Raising Interest from Investors, Partners

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By Doug Macron

Despite having just replaced its founding CEO, Dicerna Pharmaceuticals remains on track to begin a Series B financing round in the next few weeks, which is expected to raise in the neighborhood of $25 million, the company's newly appointed top executive told RNAi News this week.

At the same time, Dicerna remains focused on securing additional industry partnerships — a key aspect of its overall strategy — which could possibly include a deal for the firm's lead drug program currently in preclinical development, CEO Doug Fambrough said.

Last week, Dicerna announced that Fambrough would replace CEO and Co-Founder Jim Jenson. Fambrough is also a Dicerna co-founder and had been serving as a general partner at venture capital firm Oxford Bioscience Partners.

Notably, Fambrough helped spearhead Oxford's early investment in RNAi drug shop Sirna Therapeutics, which was acquired by Merck for $1.1 billion in 2007.

According to Fambrough, Jenson's departure was the result of Dicerna's ongoing maturation from startup to full-fledged drug developer. Given his experience with both business development and RNAi, his appointment as CEO "seemed like a natural fit."

Now at Dicerna's helm, Fambrough has already begun charting the company's course, beginning with its planned Series B financing, which is expected to officially begin before the end of the month.

"Venture capitalists are always comparing their portfolios to others' and trying to figure out when companies are going to be doing new rounds," he told RNAi News. As a result, Dicerna has already been contacted by a number of investment firms, leading to informal discussions.

"But we haven't formally kicked off the Series B," he said. "That is something that we'll do in a couple of weeks," with the completion of the round expected before the end of 2010.

Earlier this year, Jenson told RNAi News that he expected the preparation of Dicerna's first investigational new drug application to be a key "value proposition" for the Series B, with the filing of the IND occurring around the time the fundraising effort concludes (RNAi News 1/7/2010).

Fambrough, however, said this week that an IND would not be filed in 2010, and declined to offer any kind of guidance on when the application might be submitted to US regulators. However, he indicated that the company's lead program, which is in oncology, is still expected to help drive investor interest in Dicerna given the unique nature of the target being pursued.

While undisclosed, the target "is one that takes particular advantage of the properties of RNAi, such as the ability to get at things that aren't easily druggable by other mechanisms," while also being well-validated, he explained.

According to Fambrough, the target is currently addressed by drugs already on the market. But as the cancer advances, the target mutates in such a way that the existing therapies no longer are effective.

"When you get past the druggable form and it mutates to the undruggable form, then it is essentially untreatable by the same mechanism of action that does very well until the mutation," he said. As a result, the target "has the validation in the strongest form of the word, which is to say, a drug on the market … while also being undruggable.

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"So when [our program] moves forward to actually [yield] a drug on the market … it would be for post-mutation to undruggable form," he noted. Therefore, the program "achieves the confidence that this mechanism of action is actually going to have benefits to patients, but it also gets at what is one of these otherwise unreachable problems that [RNAi] that the potential to solve."

When it comes to wooing investors, Fambrough is also banking on the novelty of Dicerna's core Dicer-substrate technology.

RNAi is a "very IP-constrained field," Fambrough said. "The discovery of the activity of the Dicer-substrate class, [which comprises molecules] longer than 25 nucleotides, enables a new doorway … for working with RNA interference" since they fall outside of much of the field's fundamental intellectual property covering traditional 21 nucleotide-long siRNAs.

In addition to showing high potency and a long duration of action, Dicer-substrates appear very amenable to modification with targeting moieties, he noted. "Because the end of the molecule is cleaved off [during the RNAi process], and that end is sterically unhindered, we have a very natural attachment point for targeting reagents to mediate targeted delivery.

"Utilizing this handle on our molecules for targeted delivery to diseased cells … is a major drug-delivery effort within the company," Fambrough said. "We have a broad program [focused on conjugating] our molecules with a series of agents that bind to receptors on the surface of cells and are internalized," including aptamers; various small molecules; peptides; and larger amino acid structures such as antibodies and antibody fragments.

Although luring investors is one of Dicerna's top goals for the year, capturing the interest of industry partners remains a key aspect of its overall business strategy, Fambrough said.

"Our business model is based on concluding partnerships with larger companies," he said, pointing to the deal the firm struck with Japan's Kyowa Hakko Kirin in December to develop a Dicer-substrate-based cancer drug.

Fambrough declined to provide specific details on what future deals may look like, noting that their structure "is going to vary depending on what [each company's] interests are." However, he did state that Dicerna isn't ruling out an alliance covering its lead drug program, even before it moves into clinical development.

"Deal values in RNAi have been very strong," he noted. "RNAi partnering has been substantially more valuable than, for example, antibody partnering. Thus, the economics of early-stage deals can be very attractive, particularly for programs that are well-chosen and uniquely enabled by your technology.

"So the economics need to be right for us, but in this particular field, I don't think that precludes doing something preclinical," he added.

Ultimately, however, Dicerna wouldn't consider simply handing off the program to a partner in exchange for payments and royalties, Fambrough stressed.

"I think it's important that we … [not just] out-license it," he said. "We may well end up engaging a partnership around it, but not one where we wouldn't maintain a material economic stake in it."

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