West Coast Editor
Both sides claimed victory in an overseas patent squabble, neither company's stock reacted much, and the rest of the world still is waiting for a well-proven drug to emerge from the RNA interference technology at the center of the skirmish.
Alnylam Pharmaceuticals Inc. said the European Patent Office "upheld key features" of its important Kreutzer-Limmer I patent, but RNAi rival Sirna Therapeutics Inc. said its objections were accepted by the office, leaving Alnylam with a patent "limited to chemical structures that, in our experience, are obsolete and essentially ineffective."
Andrew McDonald, analyst with ThinkEquity Partners in San Francisco, said he was as bewildered as anybody else - and the patent office's decision doesn't matter much at this point anyway.
"I've spoken to the CEO of Alnylam a couple of times today, and I'm still confused," he said Friday.
"You can slog it out over the intellectual prop, and it can be controversial and high profile, but until you have products in late-stage clinical development, you're really arguing over IP that has very questionable value," he added. "They're wasting their time and effort."
The patent originally covered small interfering RNAs with nucleotides of less than 49 base pairs, but that was later amended to cover uses of siRNAs with an overall length of between 15 and 21 base pairs, in order to be more specific - and that change prompted the battle, McDonald said.
Alnylam's stock (NASDAQ:ALNY) closed Friday at $14.50, up 3 cents, and Sirna's shares (NASDAQ:RNAI) ended the day at $5.49, up 31 cents.
Along with Sirna, of San Francisco, those opposing Cambridge, Mass.-based Alnylam's patent included Sanofi-Aventis Group, of Paris, and Berlin-based Atugen AG.
Alnylam got the Kreutzer-Limmer patents in the July 2003 buyout of the German firm Ribopharma AG, then renamed Alnylam Europe Ag. Ribopharma CEO and founder Roland Kreutzer became chief operating officer at Alnylam Europe in Kulmbach, Germany, and Stefan Limmer, also a founder of Ribopharma and previously its chief science officer, became chief technology officer. In the transaction, Alnylam paid $3.8 million in cash and common stock and assumed $7.1 million in debt. (See BioWorld Today, July 8, 2003.)
"It's interesting to know that Sirna was trying to buy Ribopharma at the same time," McDonald said. "If the IP is valueless, why were they trying to buy the company?"
Alnylam's IP also includes the recently issued Tuschl II patent which broadly covers methods of making siRNAs to silence any and all disease targets, as well as a separate Tuschl II series patent application. Other applications from the Tuschl II series are pending.
The lead product from Alnylam, ALN-RSV01 for respiratory syncytial virus, is slated to begin a Phase I trial in the second half of the year, with a Phase II study expected in the first half of next year. Alnylam is working with Basel, Switzerland-based Novartis AG on an RNAi compound for pandemic flu, and an investigational new drug application could be filed this year. (See BioWorld Today, Feb. 22, 2006.)
Sirna, for its part, finished a Phase I trial with Sirna-027 in age-related macular degeneration last year with partner Allergan Inc., of Irvine, Calif., and expects to move the compound into Phase II this year. A compound for hepatitis C virus, Sirna-034, is bound for Phase I by the end of the year, and Sirna has a potential $700 million-plus deal with London-based GlaxoSmithKline plc for siRNA compounds against respiratory diseases. (See BioWorld Today, April 4, 2006.)
McDonald said Alnylam also has some licensing deals that "the company would like you to believe is a validation, that they have the dominant IP in the space, but in the grand scheme of things, it's fairly nominal and it's not going to affect the company."
Those licensing are mostly "in the tools area, but some are licensing it for therapeutics" as well, he said.
Jonathan Witonsky, health care analyst with Frost & Sullivan, recently authored a report on RNAi in drug discovery, where "a lot of developments" have shown up, he said.
"At the same time, there are so much data coming from these technologies in a high-throughput setting that you're starting to hear the sentiment of, 'All this production, yet no production,'" he noted. "I go against that line of thinking."
Witonsky said, "The patent and licensing restrictions of RNAi as a research and discovery tool are far different" from those that apply to therapeutics.
In R&D, "everybody's licensing everybody else's [rights]," he told BioWorld Today. "As far as the patent landscape is concerned, they know they are going to have to proceed extremely carefully."
Increased RNAi applications, which are expected to grow at more than 30 percent each year, will provide the total RNAi market with revenues of $294.9 million in 2012, according to Witonsky's report.
Most pharma firms now use RNAi in target identification and validation, he said, but conceded that establishing the approach will work against disease is another matter.
"Although clearly the investment community should expect something to come from this technology, it's not going to come in 2006 or 2007," he said.