24 November 2010

Roche cuts workforce, and drops RNAi R&D

By |2018-12-03T23:50:26+00:00November 24, 2010|Drug Development, Drug Discovery, Haberman Associates, RNAi, Strategy and Consulting|

An early example of RNA interference. Source: http://bit.ly/gbXhli

As the author of the recently published book-length report RNAi Therapeutics: Second-Generation Candidates Build Momentum (Insight Pharma Reports, Cambridge Healthtech Institute), in addition to my other involvements with the RNAi therapeutics R&D community, I feel an obligation to comment on the recent announcement from Roche.

As many of you already know, on November 17, 2010, Roche announced that it would cut 4800 jobs (about 6% of their workforce), as part of a $2.4 billion cost-reduction plan. The company also plans to transfer 800 jobs internally, and 700 jobs “to third parties”.

Most of the positions to be cut will be in sales, marketing and manufacturing (especially in Roche’s primary care sales organization) in the United States. However, in R&D, Roche plans to discontinue development of some preclinical drugs. And, most notably for the RNAi research community, Roche will discontinue R&D in RNAi therapeutics, including its RNAi research center in Kulmbach, Germany.

Roche attributed its need to make the cuts to several setbacks in its drug development programs, as well as effects of government health care policy changes in the United States and Europe. The company has also been hit by a drastic falloff in demand for its influenza treatment Tamiflu. Roche is outsourcing sales of Tamiflu to a contract sales organization.

Among Roche’s drug development setbacks have been delays in development of its antidiabetic taspoglutide and its breast cancer drug T-DM1, as well as late-stage clinical failures in studies of its best-selling cancer drug Avastin in prostate, stomach, and early colorectal cancers.

Taspoglutide is a glucagon-like peptide-1 (GLP-1) analog, which Roche has been co-developing with Ipsen. In September 2010, the companies suspended Phase 3 clinical trials due to unexpected adverse effects. in August 2010, the FDA rejected an application for Accelerated Approval of T-DM1, which Roche has been codeveloping with ImmunoGen. The companies will have to complete Phase 3 trials before resubmitting the drug to the FDA, and plan to do so in 2012.

As we said in a February 2010 blog post, Roche (as well as Novartis), unlike most Big Pharmas, had not been emphasizing layoffs and R&D cuts up to that time. However, because of the above setbacks, Roche now sees the need for large reductions in their workforce. Nevertheless, Roche’s R&D cuts appear to be much more selective than those of other Big Pharmas, including those which like Roche have undertaken large acquisitions in 2009, such as Pfizer and Merck.

RNAi therapeutics R&D

Roche’s exit from RNAi therapeutics R&D comes despite the company’s strategic platform alliance with RNAi therapeutics sector leader Alnylam Pharmaceuticals (Cambridge, MA), which was initiated in 2007. That agreement included $313 million in up-front payments, and the purchase of Alnylam’s European research site in Kulmbach, Germany. This site became Roche Kulmbach GmbH, Roche’s Center of Excellence for RNAi therapeutic research, which Roche now plans to close. Roche also had an alliance with RNAi delivery platform company Tekmira Pharmaceuticals (Burnaby, British Columbia, Canada), which also partners with Alnylam to develop and manufacture delivery vehicles for several of Alnylam’s drug candidates.

The withdrawal of Roche from therapeutic RNAi research is the second blow to Alnylam’s alliance strategy this fall. In September 2010, Novartis decided to end its 5-year partnership with Alnylam. As the result of Novartis’ decision, Alnylam carried out a corporate restructuring, including an approximately 25-30% reduction in its workforce. However, Novartis remains very much in the therapeutic RNAi field, as the result of the technology and the rights that it acquired as the result of its partnership with Alnylam. And Alnylam is entitled to receive milestone payments for any RNAi therapeutic products that Novartis develops based on the 31 targets that it has acquired exclusive development rights to from Alnylam.

According to Alnylam’s CEO, John Maraganore, Alnylam was surprised to hear about Roche’s decision to exit therapeutic RNAi. He said, however, that the Roche move would not materially affect Anylam’s financial position or its future plans.

Tekmira’s CEO, Dr. Mark J. Murray, said in a press release that it does not expect Roche’s decision to have a substantive impact on their business. The majority of Tekmira’s revenue comes from its exclusive manufacturing relationship with Alnylam, and its growing relationship with the U.S. government’s Transformational Medical Technologies (TMT) program. This refers to the $140 million contract awarded to Tekmra by the TMT Program, to develop an RNAi-based product for protection against infection with the deadly Ebola virus. Tekmira expects these programs to be its main sources of revenue through 2011, together with its ongoing R&D collaborations with Pfizer, Takeda and Bristol-Myers Squibb (BMS).

As a result of Roche’s exit from RNAi therapeutics R&D, several commentators have been speculating on what other Big Pharmas with internal RNAi programs and/or RNAi alliances (e.g., Pfizer, Merck, BMS, Takeda, Novartis, GlaxoSmithKline, AstraZeneca) might do, and on whether Roche’s move might dampen the prospects for funding of smaller RNAi companies. Others speculate that Roche’s move may simply open up the RNAi market for other competitors. However, this early after Roche’s move, no one knows how valid any of this speculation might be.

As we discussed in our July 13, 2009 blog post, and in more detail in our RNAi Insight Pharma Report, the therapeutic RNAi (and microRNA) field represents an early-stage area of science and technology, with not one drug that has successfully gotten beyond Phase 2 of clinical development. The field may even be technologically premature, as was the monoclonal antibody (MAb) drug field in the 1980s. There are still knowledgeable analysts and industry researchers and executives who believe that RNAi will never yield marketable drugs, or that marketable drugs will be few in number (as is the current situation with antisense and aptamer drugs) and/or be decades away. This is despite the apparent progress in overcoming hurdles to therapeutic RNAi development, and in developing specific drug candidates, as outlined in our report.

In the case of MAb drugs, in the 1980s and early 1990s researchers developed enabling technologies that made it possible for companies to overcoming the hurdles to successful development of marketable products. As a result, in the late 1990s the MAb drug field took off, and is now one of the most successful areas of pharmaceutical development. RNAi companies have been developing enabling technologies (e.g., delivery vehicles, new oligonucleotide structures with greater potency or self-delivering properties) to overcome hurdles to successful RNAi therapeutic development. However, it remains to be seen whether and when such technologies will enable the RNAi therapeutics field to take off the way that MAbs did in the late 1990s.

Why would Big Pharma be interested in getting into such an early-stage and perhaps premature field as RNAi therapeutics? We discuss this issue in detail in our Insight Pharma Report. Among these reasons are the need to fill weak pipelines, and the desire to stake out a commanding position in the RNAi field once it becomes successful, by getting into it early. Big Pharma is trying to avoid repeating its experience with MAb drugs, where it failed to get into the field early, considering it too high-risk. When the MAb sector became highly successful, it was expensive for large pharmaceutical companies to acquire a major stake in it.

Roche, because of its relatively early purchase of a stake in MAb leader Genenetech, and its acquisition of Genentech in 2009, and its strategy to integrate itself with Genentech so as to become essentially a large biopharmaceutical company, may feel less of a need to have internal programs and large alliances in RNAi therapeutic research than other Big Pharma companies. Roche/Genentech currently has a rich pipeline of biologics and small-molecule drugs in clinical development, and in particular continues to develop innovative MAb drugs. For example, the FDA approved Roche/Genentech’s Actemra (tocilizumab) for the treatment of moderate to severe rheumatoid arthritis in January 2010. Actemra is the first interleukin-6 (IL-6) receptor-inhibiting MAb approved for that indication. With its leading position in the MAb/biologics field (including already approved Roche/Genentech blockbusters trastuzumab [Herceptin], bevacizumab [Avastin], and rituximab [Rituxan]), Roche may consider RNAi R&D a “nice to have” instead of a “must have”. Thus, faced with the setbacks that it has experienced in 2010, Roche may feel that it was in its best interests to drop RNAI therapeutics R&D. Other Big Pharma companies with different circumstances may continue with their RNAi internal operations or alliances as part of their long-term pipeline strategies.

Moreover, Roche may have left itself a means to continue to participate in the therapeutic RNAi field without the need to manage internal operations and/or alliances in that area. Roche has a history of spinning off some of its discontinued internal operations as independent companies, while retaining a stake in these entities or options on outlicensed products, and/or collaborating with the spin-offs on newer products. For example, in 1997 Roche researchers started Actelion Ltd., to continue a research program on endothelin receptor antagonists which they had been working on but which Roche decided to discontinue because the projected market was too small for Roche. The spin-out was financed by the venture capital firms Atlas Venture and Sofinnova Partners, which together contributed about $11 million to Actelion’s Series A round. Today Actelion is Switzerland’s largest biotech company (with a U.S. subsidiary), and one of its products, Tracleer (bosentan) for treatment of pulmonary arterial hypertension, has annual sales of more than $1 billion.

In 2000, Roche spun off Basilea Pharmaceutica Ltd. in 2000 to pursue antibiotic and antifungal R&D when Roche decided to exit that area. Basilea was formed by about 50 Roche scientists and executives, with five experimental compounds and 206 million Swiss francs ($214 million) in funding from Roche. Although 51% of the company was sold to private investors, Roche kept options on some of the experimental drugs. Today, Basilea markets Toctino (alitretinoin), a retinoid compound for treatment of severe chronic hand eczema (CHE) which does not respond to the standard topical corticosteroids. It also has a pipeline of antibacterial and antifungal compounds, and conducts earlier-stage research in anti-infectives and oncology. By spinning out Basilea, Roche was able to recoup its investment in anti-infectives.

According to Roche CEO Severin Schwan, Roche might spin off or find partners for its discontinued RNAi therapeutics operations.

We believe that Roche Kulmbach GmbH, Roche’s Center of Excellence for RNAi therapeutic research, might be a good potential candidate for a spin-off. The Kulmbach facility started in 2000 as an independent biotech company, Ribopharma AG. Ribopharma, a spin-off of the University of Bayreuth in Germany, claimed to be the first company to focus on RNAi therapeutics. Alnylam acquired Ribopharma in 2003, and Roche acquired the facility in 2007 as part of its agreement with Alnylam. Might the Kulmbach Center of Excellence become an independent company again as the result of a spin-out? Roche is also planning to close its Madison, Wisconsin facility, which has been conducting therapeutic RNAi R&D. That facility was also once an independent company, Mirus Bio; Roche acquired Mirus Bio in 2008. Roche RNAi researchers in Kulmbach and Madison had collaborated closely. Might Roche/Madison also be a spin-out candidate, either as a stand-alone operation or as part of a combined organization with Kulmbach? At this point, this is all speculation.

If Roche spins out one or more RNAi operations, and retains a stake in these companies, this might provide a way for Roche to participate in the therapeutic RNAi area, without having to manage day-to-day operations. And it might give Roche an opportunity to participate more actively in the field, especially as RNAi-based drugs advance toward market entry. Currently, Roche collaborates with its spin-out company Actelion on development of the selective S1P1 receptor agonist ACT-128800/RG3477 for treatment of multiple sclerosis.  In the future, Roche could enter into similar collaborations with any RNAi companies that it might spin out in 2010/2011.

As the producers of this blog, and as consultants to the biotechnology and pharmaceutical industry, Haberman Associates would like to hear from you. If you are in a biotech or pharmaceutical company, and would like a 15-20-minute, no-obligation telephone discussion of issues raised by this or other blog articles, or of other issues that are important to  your company, please click here. We also welcome your comments on this or any other article on this blog.

18 November 2010

Entrepreneurs and venture capitalists–piercing the “pall of gloom” over obesity drugs

By |2019-04-16T21:58:26+00:00November 18, 2010|Drug Discovery, Metabolic diseases, Strategy and Consulting|

Brown fat deposits in a young woman. Source: Hellerhoff. http://bit.ly/9RNG69

As we said in our November 3, 2010 blog post, “The withdrawal of Meridia from the market, coupled with the FDA rejections of lorcaserin and Qnexa, has cast a pall of gloom on the obesity drug market. Some commentators have declared the field to be dead….”

Nevertheless, a few hardy entrepreneurs and venture capitalists continue to found and fund start-ups, whose goal is to discover and develop truly innovative classes of drugs for obesity and metabolic disease.

A November 3, 2010 Xconomy article focused on the Cambridge, MA startup biotech firm Energesis Pharmaceuticals. Energesis was confounded by Olivier Boss, PhD (formerly of Sirtris Pharmaceuticals), Brian Freeman, MD (former Venture Partner at GreatPoint Ventures), and Jean-Paul Giacobino, MD (Professor Emeritus, University of Geneva Medical School, Switzerland). Dr. Boss serves as Energesis’ Chief Scientific Officer, and Dr. Freeman as its Chief Operating Officer.

Energesis focuses on the discovery and development of drugs for the treatment of obesity, diabetes, and related metabolic diseases. The company plans to develop therapeutics that work by increasing energy expenditure, rather than the usual approaches of decreasing appetite or blocking absorption of fat in the gut. Energesis researchers intend to discover and develop drugs that increase the amount and/or activity of brown adipose tissue (BAT) to combat obesity and other metabolic diseases. BAT is a type of mitochondria-rich adipose tissue that burns fat and dissipates the energy as heat rather than storing it. The mitochondrial protein UCP1 (uncoupling protein 1) is the key biomolecule that makes this process possible. BAT has long been known to be central to non-shivering thermogenesis in rodents, for example to maintain body temperature when they are exposed to cold.

Until recently, researchers believed that in humans, significant populations of BAT cells were found only in infants. However, in recent years researchers found that adult humans possess reservoirs of brown fat in the neck region and other areas of the upper body as well as in skeletal muscle. (See the figure above.) Adult human BAT can be stimulated by acute exposure to cold and via the sympathetic nervous system, and by various pharmacological agents. Energesis’ drug discovery technology is based on the use of brown fat stem cells. The company has provided few details on its technology in published sources.

In October 2010, Energesis was named as one of the winners of the 2010 MassChallenge Global Startup Competition, where it was the top life sciences company. In that competition, Energesis was also one of the top 111 entrants that were invited to participate in a 3-month accelerator program. This provided intensive mentoring, and access to such resources as office space, legal counsel, and introductions to funding sources. Energesis, which has temporary office space in the Cambridge MA incubator Dogpatch Labs (created by venture capital firm Polaris Ventures), is now seeking additional seed-stage funding.

Brian Freeman is key to Energesis’ financing strategy. As a Venture Partner at GreatPoint Ventures, Dr. Freeman cofounded another Cambridge MA company that focuses on obesity, Zafgen. Zafgen was founded in 2005. We discussed Zafgen briefly in an earlier blog post. Zafgen’s drug discovery and development profile is based on targeting the vasculature of adipose tissue, similarly to targeting tumor angiogenesis. Zafgen already has a compound, ZGN-433 (which is a methionine aminopeptidase inhibitor), in Phase I development, and is working on earlier-stage compounds. Thus, like Energesis, Zafgen targets a novel weight-control mechanism that does not involve appetite control in the CNS or fat absorption in the gut.

Zafgen has venture funding not only from GreatPoint, but also from Atlas Ventures and Third Rock Ventures. It was named as one of the “Fierce 15” leading biotechnology companies of 2009 by FierceBiotech.

Meanwhile, another Cambridge MA biotech company, Acceleron Pharma, discovered a compound, ACE-435, which targets BAT.  ACE-435 inhibits signaling of members of the TGF-beta protein superfamily. in preclinical studies in obese animals, ACE-435 increased brown fat, decreased white fat, increased skeletal muscle, and dramatically lowered serum cholesterol and triglyceride levels. Acceleron is developing ACE-435 for treatment of metabolic diseases. The company was named as one of the “Fierce 15” biotech companies in 2010.

Acceleron, which was founded in 2004 and has three products in the clinic, has raised three rounds of venture capital, and has a major corporate alliance with Celgene. In September 2010, it also signed a $498 million agreement with Shire to develop muscular dystrophy drugs. Acceleron is thus a more mature company than Zafgen or Energesis. Unlike Zafgen and Energesis, Acceleron works in several therapeutic areas, not just obesity and metabolic diseases.

The entrepreneurs who founded obesity specialists Zafgen and Energesis–as well as the venture capitalists who funded Zafgen, and the executives and researchers at Acceleron who have been developing ACE-435–are working on obesity drug development despite the pall of gloom caused by the failures of nearly every antiobesity drug, and the increasing currency among leaders of health insurance companies and health care providers of the old idea that obesity is entirely the fault of the obese, due to “lack of personal responsibility” or “food addiction”. This is despite the abundant evidence that obesity is a complex disease with a large genetic component. Health care leaders, as well as obese people themselves, are frustrated with the lack of solutions to the growing obesity problem, and thus may be tempted to fall back on old, discredited explanations.

The entrepreneurs, researchers, and venture capitalists behind Energesis, Zafgen, and Accleron, however, see the failure of most antiobesity drugs as an opportunity. The failed drugs target common neurotransmitter receptors in the CNS, and thus would be expected to have serious adverse effects, since these receptors are involved in multiple physiological processes in the CNS and elsewhere in the body. Drugs that target physiological pathways other than appetite control in the CNS, and which are based on superior biology-driven drug discovery strategies, may avoid the safety problems of the CNS-acting drugs, as well as exhibiting much greater efficacy. Such drugs may fulfill the major unmet medical need in the obesity area, where there are currently no good solutions.

The founding of Zafgen and Energesis also flies in the face of the current negative situation in the venture capital and credit markets, and in the economy in general.  Small companies (especially including startups) continue to find it difficult to raise cash. More established biotech companies, as well as pharmaceutical companies, also feel the need to cut budgets and especially to cut their workforces to save cash. In the Boston area, Big Biotechs Genzyme (which has been facing a hostile takeover from Sanofi Aventis, and which is in discussions to sell itself to Takeda) and Biogen Idec have slashed workforces and budgets, as has contract research firm and animal model supplier Charles River Laboratories. Acceleron also cut its workforce in November 2010.

Nevertheless, both Acceleron and Zafgen (the latter under the leadership of Brian Freeman) have managed to raise significant amounts of venture capital in this tough market. In the case of Zafgen, this is despite the generally gloomy prospects for antiobesity drugs, which are its dedicated focus. We hope that Energesis, in Dr. Freeman’s capable hands, will also be able to bring in Series A venture funding.

The type of entrepreneurial innovation shown by Energesis, Zafgen, and Acceleron has implications beyond the obesity area. In a recent speech, the CEO of Lilly, John C. Lechleiter, Ph.D. outlined the components of an environment that supports medical innovation. (We citied Dr. Lechleiter’s speech in an earlier blog post on the obesity drug market.) Among these components is what Dr. Lechleiter called “a larger ‘ecosystem’ that allows innovation to flourish”.  Such an ecosystem would include an “atmosphere” that allows innovation to thrive, “nutrients” in the form of monetary investments, and the “seeds” of human talent in relevant scientific disciplines.

The development of Zafgen and Energesis illustrates the importance of the Boston area biotech and pharmaceutical innovation hub in fostering the initiation and growth of biotech companies with innovative strategies that are potentially game-changing, by providing such an ecosystem. This has included entrepreneurial researchers with innovative ideas and intellectual property, lead venture capitalists willing to back their ideas (and, as in the case of Brian Freeman, to leave their venture capital firms and to join with the researchers in a start-up), universities such as Harvard, MIT, Tufts, and Boston University, the large numbers of biotech companies, both large and small, in greater Boston, the presence of Big Pharma facilities including Novartis’ R&D world headquarters, incubators such as Dogpatch Labs, and entrepreneurship competitions such as the MassChallenge and the MIT Enterprise Forum’s 100K competition.

The United States has other biotech/pharma innovation hubs as well, most notably the San Francisco Bay area and greater San Diego. As shown by the example of ZymoGenetics (see our November 11, 2010 blog post), Greater Seattle has been such an innovation hub, although biotech leaders in Seattle are afraid that their hub has been eroded by acquisitions such as that of ZymoGenetics by Bristol-Myers Squibb and the earlier Amgen-Immunex merger, with the resulting substantial layoffs. Other major U.S. biotech/pharma hubs include the Research Triangle Park area of North Carolina and greater New York/New Jersey/Philadelphia. Canada and several Western European countries also have biotech/pharma innovation hubs.

Various other cities and states in the U.S., as well as cities and countries in Europe and South and East Asia, are working to build new biotech hubs to bolster their economies. Big Pharma companies, with their massive need to acquire or partner for new, innovative drugs, must also develop strategies to foster ecosystems for innovation, both within their own organizations and in seedbeds for potential partners such as existing and emerging biotech hubs. The example of the role of the greater Boston area in spawning such companies as Energesis, Zafgen, Acceleron, and several others that have been covered in this blog may provide case studies to help Big Pharmas in formulating new strategies to foster innovation.


As the producers of this blog, and as consultants to the biotechnology and pharmaceutical industry, Haberman Associates would like to hear from you. If you are in a biotech or pharmaceutical company, and would like a 15-20-minute, no-obligation telephone discussion of issues raised by this or other blog articles, or of other issues that are important to  your company, please contact us. We also welcome your comments on this or any other article on this blog.

11 November 2010

Haberman Associates in Nature Biotechnology article on Bristol-Myers Squibb acquisition of ZymoGenetics

By |2018-09-13T22:59:48+00:00November 11, 2010|Cancer, Drug Development, Haberman Associates, Infectious Disease, Strategy and Consulting|

Logo for illustration purposes only.

I was quoted in an article entitled “Bristol-Myers Squibb reaps biologics in ZymoGenetics windfall”, by freelance journalist Emma Dorey (Brighton, UK), in the November 2010 issue of Nature Biotechnology. The article focused on the acquisition of ZymoGenetics (Seattle, WA) by Bristol-Myers Squibb (BMS). To read the article, go to the Nature Biotechnology website.

Interestingly, I was also quoted in a Nature Biotechnology article on an earlier BMS acquisition–that of the monoclonal antibody (MAb) company Medarex–in September 2009. You can read our blog post that references that article, and which discusses the MAb sector in terms of technology strategy and innovation strategy, here.

The November 2010 Nature Biotechnology article discusses the acquisition in terms of the ZymoGenetics pipeline, the financial aspects of the deal, and the competitive landscape.

Most commentators believe that BMS’ main motivation for acquiring ZymoGenetics was to gain full ownership of ZymoGenetics’ pegylated interferon-lambda (Peg-IFN-λ) program for treatment of hepatitis C (HepC). The two companies had been been collaborating  to develop Peg-IFN-λ since January 2009.

HepC is a viral disease of the liver that in its chronic form can cause cirrhosis of the liver and other serious disease manifestations. The standard treatment is with a combination therapy of peginterferon-alfa-2a (Roche’s Pegasys) or peginterferon-alfa-2b (Merck’s PEG-Intron) plus ribavirin (generic). Approximately 50% of patients with chronic HepC do not respond to therapy, with patients infected with HepC virus (HCV) genotype 1 having the worst prognosis. The treatment also has significant adverse effects, ranging from flu-like symptoms to severe adverse events such as anemia, cardiovascular events and psychiatric effects such as depression and suicidal ideation. The disease therefore has a high unmet medical need.

The receptor for IFN-λ (which is designated as a type III interferon) has a more restricted cellular distribution than for type I interferons such as the interferon-alphas. The IFN-λ receptor is present on hepatocytes of the liver, so Peg-IFN-λ should be applicable to treatment of HepC. However, because of the more restricted distribution of its receptor, researchers hypothesize that Peg-IFN-λ should have fewer adverse effects than the peg-interferon-alphas.

The HepC field is very competitive. Companies with Phase III agents include Vertex, (Telaprevir, or VX-950, an oral protease Inhibitor, Phase III), and Merck (Boceprevir or SCH 5034, an oral protease inhibitor, Phase III). Vertex recently announced positive Phase III data for Telaprevir; it expects to file an IND later this year.

In addition to the collaboration with ZymoGenetics on Peg-IFN-λ, BMS had several small-molecule HepC drugs in development. None are more advanced than Phase II. Among these drugs are the protease inhibitor BMS-791325, and the RNA protease/helicase NS3 inhibitor BMS-650032. Perhaps the most interesting BMS HepC small-molecule drug is BMS-790052, an oral inhibitor of the HCV NS5A protein. NS5A has no known enzymatic function; thus BMS-790052 has a unique mechanism of action.

In in vitro studies, BMS-790052 appears to be the most potent HCV inhibitor reported so far. In published Phase I clinical results in patients with chronic HCV infection, this agent gave a 3.3-log reduction in mean viral load that was sustained over 120 hours in two patients. In the results of a Phase II clinical trial of a combination therapy of BMS-790052 with peginterferon alpha-2a and ribavirin (presented at the April 2010 meeting of the European Association for the Study of the Liver [EASL]), the three-drug combination therapy gave a significantly higher antiviral response than the standard therapy alone. The results support further development of BMS-790052 in combination with the standard therapy, and/or with other antivirals.

Other anti-HCV medications (e.g., protease and polymerase inhibitors, and the NS5A inhibitor) are intended to be administered together with the standard therapy. Peg-IFN-λ, however, is intended to replace the interferon-alpha component of the standard therapy.

The purchase of ZymoGenetics adds another promising drug to BMS’ hepatitis C portfolio, and allows it to be competitive with such rivals in the HepC market as Merck and Johnson & Johnson (Vertex’ principal partner for Telapravir).

ZymoGenetics and BMS completed and presented data from a Phase 1a study designed to evaluate the safety and tolerability of Peg-IFN-λ in healthy subjects. The data showed that Peg-IFN-λ was well-tolerated at pharmacologically active doses, supporting the decision to go forward and initiate studies in HepC patients. In November 2009, the companies presented final results from a Phase 1b study of Peg-IFN-λ as a single agent and in combination with ribavirin to assess safety and antiviral activity in patients with chronic genotype 1 HCV infection. In the study, Peg-IFN-λ demonstrated anti-viral activity at all dose levels tested in both relapsed and treatment-naïve HCV patients. A majority of patients across all treatment arms achieved a greater than 2 log reduction in HCV RNA.  Adverse effects appeared to be minor, at pharmacologically active doses below the limiting dose.

A Phase 2 study designated EMERGE is ongoing, in which Peg-IFN-λ and ribavirin are administered to treatment-naïve patients with chronic HCV infection. The EMERGE study began with a Phase 2a open-label study (which has been completed) that explored a range of doses to be tested in the second part of the study. In the second part of EMERGE, a still-ongoing Phase 2b randomized, controlled study, researchers are assessing the safety and antiviral efficacy of Peg-IFN-λ-ribovirin therapy as compared to the standard Pegasys-ribovirin therapy.

Enrollment was completed in the Phase 2b part of EMERGE on August 25, 2010. Thus the results of the Phase 2 trial will not be determined until well into 2011.

Any small-molecule HepC drugs now in the clinic that achieve FDA approval will be approved for use in combination with a Peg-IFN-alfa and ribovirin. However, according to the Nature Biotechnology article, companies are also attempting to move toward therapies that combine two small-molecule drugs and do not include a pegylated interferon. For example, Vertex and Gilead are testing combinations of protease and polymerase inhibitors in Phase 2 clinical trials. The reason for attempting to develop interferon-free HepC therapies is that pegylated interferons are expensive, require subcutaneous injection, and at least in the case of pegylated interferon-alpha products, have significant adverse effects. If these small-molecule combination therapies prove to be safe and efficacious, they could limit the commercial potential of Peg-IFN-λ. However, BMS could also develop combinations of its small-molecule drugs as an alternative. Moreover, the safety and efficacy of any combinations of small-molecule drugs for treatment of HepC remains unproven.

As also discussed in the Nature Biotechnology article, ZymoGenetics has other pipeline drugs. These especially include interleukin-21 (denenicokin) for treatment of metastatic melanoma, which now in Phase 2b development. (Natural interleukin-21 is a regulator of natural killer cells and cytotoxic T cells.) According to the Nature Biotechnology article, interleukin-21 gave impressive results in an open-label Phase 2a trial in 39 patients with stage IV melanoma. The patients had a median overall survival of 12.4 months, and the percentage of patients surviving at 12 months was 53%. Some analysts. noting that BMS purchased ZymoGenetics mainly for its Peg-IFN-λ HepC program, say that BMS is getting ZymoGenetics’ other pipeline drugs and its marketed product (Recothrom, a recombinant thrombin product, for controlling bleeding after surgery) “for free”.

As we discussed in our September 2009 blog post on the BMS acquisition of Medarex, the BMS-Medarex acquisition represents part of a larger trend, the growing emphasis on biologics in large pharmaceutical companies, which have traditionally relied on small-molecule drugs. The acquisition of ZymoGenetics is also part of BMS’ efforts to expand into biologics. Biologics are a highly successful class of drugs that have mainly been developed by biotech companies. Big Pharma companies have been working to acquire biologics (and the companies that develop them) in order to stave off the depletion of their marketed and pipeline drugs by patent expiries and by clinical failures.

Mergers and acquisitions have been the major factor in the building of biologics franchises by large pharmaceutical companies. BMS refers to its strategy for moving into biologics (and innovative small-molecule drugs) via acquisition and partnerships as its “String of Pearls”strategy.  BMS has been forming a series of acquisitions, alliances and partnerships with biopharmaceutical companies, involving both small molecules and biologics. Medarex is the largest of these “pearls”, and ZymoGenetics is the newest. According to BMS, the String of Pearls strategy has enabled BMS to expand its pipeline by nearly 40 percent. About one-third of BMS’ pipeline drugs are biologics.

Interestingly, the 2010 BMS acquisition is not the first time that a large pharmaceutical company has acquired ZymoGenetics. ZymoGenetics was founded (as Zymos) in 1981 by three University of Washington professors. In 1988, the Danish pharmaceutical company Novo Nordisk acquired the company. For the next twelve years, it functioned as the US research arm of Novo Nordisk, and helped develop several Novo products, including ZymoGenetics products mentioned in the Nature Biotechnology article that are outlicensed to Novo (e.g, the insulin product Novolin and the Factor VIIa drug NovoSeven). In late 2000, Novo Nordisk spun out the company as ZymoGenetics, which completed an initial public offering in 2002.

That brings up the issue as to what BMS should do with ZymoGenetics. BMS might, having acquired ZymoGenetics for Peg-IFN-λ and other assets such as interleukin-21, liquidate ZymoGenetics, selling the Seattle location, offering some ZymoGenetics staff jobs at other BMS locations, and laying off the rest. Or it might realize that ZymoGenetics has proven to be an important drug discovery engine, from the days in which it was a division of Novo Nordisk, and continuing on into 2010. BMS might especially want the ZymoGenetics team to keep working on its partnered programs without interruption, bringing in milestone payments and royalties. In that case, BMS might keep ZymoGenetics as an R&D-oriented division in Seattle, only eliminating redundant functions and staff, and plan to reap any new drugs that ZymoGenetics might discover and take into the clinic. The latter strategy worked for Novo Nordisk. Might it work for BMS?


As the producers of this blog, and as consultants to the biotechnology and pharmaceutical industry, Haberman Associates would like to hear from you. If you are in a biotech or pharmaceutical company, and would like a 15-20-minute, no-obligation telephone discussion of issues raised by this or other blog articles, or of other issues that are important to  your company, please contact us. We also welcome your comments on this or any other article on this blog.

5 November 2010

Haberman Associates RNAi Therapeutics report published by Cambridge Healthtech Institute

By |2018-12-03T23:50:26+00:00November 5, 2010|Haberman Associates, RNAi, Strategy and Consulting|

Figure by Daniel Ramsköld, Karolinska Institutet. http://tinyurl.com/37n36qh

On November 4, 2010, Cambridge Healthtech Institute (CHI) announced the publication of our new book-length report, RNAi Therapeutics: Second Generation Candidates Build Momentum.

Since the Nobel Prize-winning discovery of RNAi (RNA interference), there has been intense interest by the biotech, pharmaceutical, and investment community in developing oligonucleotide drugs based on RNAi technology. First-generation candidate RNAi therapeutics met with serious obstacles related to potency, stability, immunogenicity, and delivery. However, these issues are being addressed by the current second-generation RNAi therapeutics making progress through preclinical and clinical development.

This new Insight Pharma Report examines the science behind therapeutic RNAi and miRNA (microRNA), technologies for design of therapeutic oligonucleotides that work via an RNAi or miRNA-modulating mechanism, technologies for design of delivery vehicles, and leading specialty companies in the therapeutic RNAi/miRNA industry sector. These include such companies as Alnylam, Quark, RXi, Silence, Tekmira, Regulus, and Santaris.

The report also discusses the role of large pharmaceutical companies in the therapeutic RNAi/miRNA sector, including alliances with RNAi specialty companies and in-house drug development. Also covered are companies that focus on development of miRNA-based diagnostics. The report also includes a discussion of the outlook for the therapeutic RNAi/miRNA industry sector, including strategic issues such as technological prematurity and the development of enabling technologies, the role of Big Pharma investment, the impact of patent litigation and cross-licensing in shaping the RNAi/miRNA sector, and a scenario for the development of RNAi and miRNA-based drugs.

The report also includes transcripts of interviews with five leaders of biotech companies in the RNAi/miRNA industry sector.

The Biopharmconsortium Blog includes two articles on the therapeutic RNAi/miRNA sector, published in 2009. You can access these articles here. The new CHI Insight Pharma Report provides a much more extensive–and updated–exposition of the state of RNAi and miRNA therapeutic development, and of the exciting, fast-moving industry sector that is working to develop these drugs.

For more information on RNAi Therapeutics: Second Generation Candidates Build Momentum, or to order it, see the CHI Insight Pharma Reports website.

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