Pointing to his company’s work on “the next frontier in small molecules,” Ribometrix Inc. CEO Mike Solomon said the potential $1 billion-plus deal with Roche Holding AG offers evidence of big pharma’s mounting interest.

Expertise in RNA folds helped Ribometrix nail down an agreement with Basel, Switzerland-based Roche’s Genentech arm that brings $25 million up front and potential milestone payments beyond $1 billion, as the pair discovers and develops RNA-targeted small-molecule therapeutics. Genentech gains exclusive rights to several predefined targets, including an exclusive global license for the development and commercialization of molecules.

Buck Phillips, chief financial officer and chief operating officer for Ribometrix, told BioWorld that the up-front payment “needs to be considered in the context of the number of targets,” about which the company could not provide details under the terms of the pact. Given his firm’s obligations, the payment is “reasonable and attractive,” he said, and the rewards are “appropriately divided” between the up-front and milestone amounts.

Privately held Ribometrix, of Durham, N.C., deploys a platform with methods that include structural analytic know-how to identify 3D motifs in the folds of RNA molecules and then design binding candidates for therapeutic effects. “There are compounds that exist that bind to the secondary structure of RNA,” Solomon noted, but they’re non-selective and “not quite drug-like.” Ribometrix’s 3D capability fixes that. The pair will pursue discovery and preclinical development together, with Genentech taking programs the rest of the way. The setup includes tiered royalties, too.

Mike Solomon, CEO, Ribometrix

Research by founder Kevin Weeks, professor of chemistry at the University of North Carolina at Chapel Hill, fueled the company. RNA SHAPE technologies, invented in his laboratory, are used worldwide as the gold standard for studying the structure of RNA, Solomon said. Ribometrix “enhanced [Weeks’ approach] significantly and built other technologies around it,” he said, and the methods evolve with the profiling, screening and optimization of more compounds. “Each step in that process informs us of something we can do better,” he said.

In September 2019, Ribometrix tied the bow on an agreement with Vertex Pharmaceuticals Inc., of Boston, centered on as many as three therapeutic programs, including an ongoing discovery effort from Ribometrix. Vertex paid about $20 million up front, which included an equity investment. Terms called for Ribometrix to undertake two discovery programs with Vertex, with the latter holding an option to add a third. Vertex also was granted an option, after discovery and optimization, to take an exclusive global license for the development and commercialization of molecules in that program. All told, Ribometrix could bank more than $700 million in payments related to research, development, regulatory and commercial milestones, as well as royalties.

Solomon compared the prospects in RNA to those of kinases. “Imagine having that same kind of opportunity, but 10 times” the magnitude across many therapeutic areas, he said. Ribometrix’s own programs target oncology. The firm could tally more deals if the terms line up. “We’re in pretty good shape financially now,” he said. “We’ll continue to have discussions and see where they go.”

Vertex, for its part, last month made a second foray into the growing space, pledging $40 million up front as well as up to $2.2 billion in milestone payments to Skyhawk Therapeutics Inc., of Waltham, Mass. Recognized as a foundational program in the field is Evrysdi (risdiplam), an RNA splicing modulator, co-developed by South Plainfield, N.J.-based PTC Therapeutics Inc., the Jackson, Wy.-based not-for-profit SMA Foundation and Roche. The FDA approved the drug last summer for treating spinal muscular atrophy (SMA). Its mechanism involves boosting the translation of mRNA encoded by SMN2, a similar gene that is normally poorly expressed but that can compensate for the loss of SMN1 expression, which is mutated in SMA. The drug stabilizes an interaction between the SMN2 pre-mRNA and a component of the spliceosome complex of small nuclear RNAs and proteins that are responsible for removing introns during pre-mRNA processing. Skyhawk and Vertex will hunt for more splice modulators in a number of undisclosed diseases.

Roche has a deal with Skyhawk, too, signed in the summer of 2019, as well as with RNA small-molecule player Arrakis Therapeutics Inc., of Waltham, Mass., which included $190 million up front and a back-end value that could exceed “several billion dollars,” the company said. In June 2020, Lexington, Mass.-based Accent Therapeutics Inc. collected $55 million up front and as much as $1.1 billion in milestone payments as part of a three-molecule deal with Astrazeneca plc, of London, as the duo explores RNA-modifying proteins in cancer. Others busy in the space include Kymera Therapeutics Inc., Storm Therapeutics Ltd. and Gotham Therapeutics Inc. In December, Remix Therapeutics Inc., a Cambridge, Mass.-based startup developing small-molecule RNA modulators, raised $65 million in series A financing led by Foresite Capital. Atlas Venture and The Column Group, which seeded the company with $16 million in funding, also participated, alongside Arch Venture and Alexandria Venture Investments.

RNA remains intriguing to academic scientists as well as industry. A paper published last month in Cell detailed work by MIT’s Richard Young, professor of biology, and Arup Chakraborty, professor of chemical engineering, physics and chemistry. They found that RNA molecules apparently are self-regulating by way of a feedback mechanism. Cells begin transcription to make more RNA when the molecule numbers are low, and then quit once a certain threshold is reached.