Rana Therapeutics Inc., a young firm quietly building up RNA platform technology, padded its coffers with a $55 million series B round to advance its lead programs toward the clinic and expand its in-house capabilities.
For a preclinical-stage firm still a year or two from the clinic, the oversubscribed round, disclosed Wednesday, seems particularly impressive, likely due in part to renewed attention to the RNAi space in the last few years as researchers begin to solve the delivery issues that had previously sent big pharma and investors fleeing the space. Rana's unusual approach – up-regulating genes rather than silencing them – also clearly piqued investor interest.
"There's a lot of work going on the in the RNA therapeutic space," acknowledged CEO Ron Renaud. "A lot of folks are employing oligonucleotides to silence genes, degrade genes and block translation. We're unique in our approach in that we're up-regulating genes," either turning on genes that are shut off or up-regulating genes that have been degraded or have short half-lives.
Co-founded in July 2011 by RNAi expert Arthur Krieg, Rana's platform stems from work by Jeannie Lee at Massachusetts General Hospital, who found that noncoding RNA (ncRNA), once part of the genome considered "junk DNA," actually served an important epigenetic gene-regulating function. It's a subset of ncRNAs – long noncoding RNAs, or lncRNAs – that Rana aims to exploit with its technologies.
Its most advanced program is targeting spinal muscular atrophy (SMA) and is based on Rana's PRC2, or Polycomb Repressive Complex 2, platform. PRC2 is known for repressing gene expression. By creating short, single-stranded oligonucleotide antagonists capable of blocking the binding of PRC2 to an lncRNA region, that gene expression could be de-repressed, Renaud explained.
In SMA, the idea is to up-regulate survival of motor neuron 2 (SMN2). It's been shown that SMA patients with extra copies of the SMN2 gene have less severe disease, so boosting SMN2 expression – by de-repressing it – should achieve a therapeutic outcome.
Rana's approach differs from that of RNA efforts in later-stage development such as Isis Pharmaceuticals Inc., which has launched phase III testing with partner Biogen Inc. for antisense drug ISIS-SMNRx. Novartis AG has LMI070 in phase II testing, while partners Roche AG and PTC Therapeutics Inc. suspended recruitment in a phase II trial of RG7800 earlier this year after a potential safety issue cropped up in preclinical trials.
"To the best of our knowledge, those are all splice-correcting oligonucleotides," Renaud explained. "While we may be behind [in development], we're taking a different approach. We're not correcting a splicing defect; we're taking an existing gene that is there and un-repressing it."
In fact, he added, the different mechanisms appear to be complementary in early studies. Combining Rana's approach with Isis' ISIS-SMNRx, "we saw a nice improvement in a mouse model," he said. Rana will continue developing its program as a standalone treatment, but it's "entirely possible" SMA could one day be treated by a combination regimen.
Current work is focused on optimizing an oligonucleotide, with the goal of moving into investigational new drug application-enabling studies in 2016 and clinical studies in 2017, Renaud said.
Coming along about a quarter behind the SMA program, Rana has a second program directed to Friedreich's ataxia, a disease caused by expansion of a triplet repeat in the frataxin gene, leading to reduced expression of the mitochondrial protein needed to bind iron and resulting in damage to cells in the central nervous system. The idea is to inhibit the lncRNA responsible for silencing frataxin expression.
"We're able to actually stabilize that gene and allow it to circulate much longer," Renaud said. "We're continuing to generate oligonucleotides to do that."
Beyond those programs, Rana also boasts the potential for multiple partnering opportunities. Its stabilizing messenger RNA platform "opens the door for very broad application across a number of different genes," Renaud told BioWorld Today. And Rana currently has patents for more than 70 genes, many of those "in therapeutic areas much too large for a company of our size."
Once Rana successfully demonstrates an ability to up-regulate genes and has optimized oligonucleotides in hand, the company will look at opportunities for out-licensing or collaborating. But it still aims to keep some programs for itself.
Rana has no intention of being a mere platform company. Renaud said the plan is to build out full infrastructure, and a portion of the proceeds from the series B will go toward that effort, including a move Sept. 1 to a larger facility.
"We have outgrown our current space," he said, adding that the new digs will "quadruple our space," allowing the firm "to increase our bandwidth and bring in our own internal oligonucleotide synthesis capabilities," eliminating the reliance on outsourcing.
To that end, Rana also recently brought on board Balkrishen Bhat as vice president of chemistry. The former head of chemistry at Regulus Therapeutics Inc., Bhat will oversee the oligonucleotide synthesis work at Rana.
The company has about 25 employees, most of them in R&D. More are expected to be added to roster, though "I don't have a target number of employees to have by Dec. 31," Renaud said. "We'll follow the science and see where the science takes us and identify the right skill sets to continue to allow us to build that."
Rana previously raised $20.7 million in series A funding in 2012 from Atlas Venture, SR One, Monsanto Co. and Partners Innovation Fund. All three investors returned for the series B, which was co-led by MRL Ventures, the early stage therapeutics fund of Merck & Co. Inc., and the Baupost Group LLC. Additional participation came from new investors Rock Springs Capital Management, Brookside Capital, Leerink Partners LLC and an undisclosed blue chip public investment fund, and existing investors MS Ventures, Omega Funds, Pfizer Venture Investments and SR One. (See BioWorld Today, Jan. 19, 2012.)
Joshua Resnick, president of MRL Ventures, joined Rana's board.
Renaud declined to comment specifically on the cash runway. "What's more important is that this is a significant transaction that will allow us to execute" all its near-term R&D goals and infrastructure expansion, he said.
"This is a blue chip group of investors that are really going to help Rana, really take the company to the next level."