"We think, unquestionably, we're the leaders," said Van Miles, senior vice president of business development for Alnylam Pharmaceuticals Inc., talking last week about RNA interference.
Howard Robin, CEO of Sirna Therapeutics Inc., saw the matter differently.
"I stand by our position that we have the dominant estate" in small interfering RNA, Robin said, noting that his firm is completing its Phase I program with siRNA against macular degeneration, whereas Alnylam's efforts are preclinical - and, by coincidence, include an arrangement with Merck & Co. Inc. to develop a compound in that indication.
"We're the only company to have human data" in this area of research, Robin said. Still, it was Alnylam that drew last week the potential $700 million deal with Novartis AG, which is buying almost 20 percent of Alnylam as part of the deal.
Under the terms, Novartis will make initial payments of about $56.8 million, consisting of up-front payments and the purchase of about 4.2 million shares of the company's stock at $11.11 per share. (The exact amount of stock to be bought will be determined before the closing of the deal, and will equal 19.9 percent of Alnylam's outstanding shares.)
Alnylam also could get, across multiple programs, research and early development funding, plus milestone payments for progress including preclinical and clinical advances, as well as sales. Royalties are part of the deal, too, which last for three years but is extendable for two more one-year periods,
Already, Alnylam's patent portfolio had been impressive enough to secure eight other agreements providing nonexclusive rights, including four deals this year. Licensing RNAi property for research were MWG Biotech AG, Sigma-Aldrich Corp. and Eurogentec.
In July, Nastech Pharmaceutical Co. entered an exclusive licensing deal with Alnylam to discover, develop and commercialize RNAi therapeutics directed against the protein TNF-alpha. That deal was the third partnership with Alnylam's InterfeRx program, two others being with GeneCare Research Institute Co. Ltd. and Benitec Ltd.
And now, Novartis has stepped in.
Alnylam's stock soared 43.8 percent as a result Wednesday to hit $13.75, after trading as high as $14.04 - well beyond the $13 target price assigned by Piper Jaffray a week earlier while reiterating its "outperform" rating. RNAi, which has been hot for several years, is growing up. (See BioWorld Financial Watch, Feb. 23, 2003.)
Miles said the field, though once regarded by some as the next step after antisense, deserves better than that.
"We separate them," he said. "In one respect, they both target messenger RNA, but we think there's a significant difference. RNAi is a natural mechanism that uses machinery present in all cells. And that machinery is catalytic."
When antisense was first discovered, he noted, "people wanted to use it as a target validation tool." Progress has been made, Miles acknowledged, but "with RNAi, as soon as it was discovered, [researchers] were quickly able to find multiple potent molecules for every gene they were interested in. It has become the target validation tool of choice, because you can very quickly knock down the gene."
The applications promise to be broad, said Jeremy Levin, global head of strategic alliances for Novartis.
"Things we had previously looked at for small molecules, and didn't work, now are approachable," he said. "It's a new armamentarium" since - at least in theory - practically any gene could be silenced.
Sirna's Robin agreed about the possibilities.
"Antisense has been a failure because you're not dealing with an endogenous or natural mechanism," he said. But the "machinery [involved in RNAi] is already poised to do what you want it to do, and if you look at other drugs in biotech, those are the types of drugs that have been successful."
But he would not agree that Alnylam is ahead in the RNAi race.
"Sirna is leading the way in advancing this technology," he said, adding that "there will certainly be patent debates going down the line." Sirna has 43 issued patents and 250 pending, he said, an estate "almost entirely home grown at Sirna."
To determine who is entitled to do what "takes an awful lot of in-depth understanding," he said - and just might require a judicial ruling eventually, though Robin stopped short of predicting as much.
Novartis' Levin said Alnylam "is a recognized leader and they've got an established [intellectual property]." He called the RNAi landscape "very complicated" and declined to speculate on "how that plays out later on."
The field, Levin said, is "no different from many areas we've been in. Novartis is very skilled in understanding IP issues" - and still chose to go with Alnylam rather than, say, Sirna.
"There are lots of reasons that companies do certain things," Robin said. "This is just the beginning of the deals you see get done. I can't predict what Novartis or other companies might do," though he called the Alnylam deal "outstanding for the field of RNAi. I was pleased to see it."
Sirna has an RNAi oncology partnership with Eli Lilly and Co., and Robin said "extensive discussions with very large pharmaceutical companies" are under way by his firm, with a hoped-for disclosure about a deal by the end of this year.
"Look, we have made tremendous progress, in the sense that we now have impressive human data," he said, pointing to data published in July in Nature Biotechnology showing a 95 percent knockdown of hepatitis B virus using the company's chemically optimized siRNA at 1, 3 and 5 mg/kg together with encapsulating and delivery technology provided by Protiva Biotherapeutics Inc.
The siRNA formulation was administered by intravenous injection to mice carrying replicating HBV. Researchers also saw reductions in hepatitis B surface antigen protein levels, and reported that antiviral activity persisted for at least seven days.
"We're now up to systemically delivered siRNA," Robin said. "I have no doubt that Alnylam will make excellent progress, as well, but there really are only a handful of companies in this space to work with exceptionally complicated chemistry."
Alnylam has published some interesting work of its own. In the Nov. 11, 2004, issue of Nature, researchers reported lowering cholesterol in mice via RNA-mediated silencing of the apoB gene. ApoB is a critical protein required for the formation of low-density lipoproteins, and blocking apoB interferes with the transport and metabolism of both dietary and endogenous "bad" LDL cholesterol.
The scientists designed siRNAs that would prevent their degradation in the blood and enable their efficient delivery - by conjugating the apoB-siRNA to cholesterol itself, thus creating a sort of Trojan horse.
Does Novartis' choice of Alnylam put the screws to Sirna, in terms of nailing down a major pharma partner quickly?
"I wouldn't look at it that way," Robin said. "Our market caps are just about the same right now. I don't see it as a sense of urgency. What is very important is that we stick to our strategy."