Arrowhead stakes bigger claim to RNAi space in Novartis deal Share
By Jennifer Boggs, Managing Editor
The latest foray in the oft-thorny RNAi patent landscape sees Arrowhead Research Corp. nabbing the entire RNAi portfolio of Novartis AG, picking up rights to a host of intellectual property (IP) and assets, including an existing license agreement with RNAi powerhouse Alnylam Pharmaceuticals Inc., a pipeline of three preclinical candidates and a patent estate the Pasadena, Calif.-based biotech said falls safely outside the scope of competitors’ IP.
“This is a big leap forward for us,” acknowledged Chris Anzalone, president and CEO of Arrowhead, which had operated largely as a holding company until a few years ago when management decided to sink funds into building an internal pipeline, leading with promising hepatitis B virus (HBV) candidate ARC-520. (See BioWorld Today, May 7, 2013.)
Having waded into RNAi via a 2012 licensing deal with Alnylam for IP related to HBV that would eventually become ARC-520, Arrowhead is no stranger to the perils of working in that space.
The Novartis deal “speaks to two of the three great challenges” in RNAi, Anzalone said, specifically efficiency of process and freedom to operate. The third challenge is the delivery of RNAi therapeutics, the main bugaboo that sent big pharma fleeing the field a few years ago but one Arrowhead already has a handle on.
“I think we’ve solved delivery,” he told BioWorld Today. The company picked up rights to the Dynamic Polyconjugate (DPC) delivery technology in 2011 when Roche AG decided to divest the RNAi technology it had acquired only a few years before. DPCs are nanoparticles – 5 nm to 20 nm in size – targeted to deliver the siRNA into the endosome, where it releases the siRNA into the cytoplasm to knock down target gene expression. In animal models, it has shown an impressive degree of knockdown. “We think it’s the best in the field,” he added.
Establishing a clear freedom to operate in RNAi is much trickier, particularly for a small biotech with limited resources, as is building on ways to improve the efficiency of RNAi therapeutics.
Novartis, like many of its big pharma brethren, had jumped into RNAi a decade ago. It inked the Alnylam agreement in 2005 for access to RNAi IP against 30 targets of its choice. The Basel, Switzerland-based firm later declined to extend that collaboration, but it had accumulated a significant amount of R&D during the last 10 years, Anzalone said. (See BioWorld Today, Sept. 8, 2005, and Sept. 27, 2010.)
“We knew they were exiting the space,” opting against building an internal pipeline of RNAi drugs at Novartis, he said. “We assumed they’d developed some pretty valuable assets.”
So Arrowhead took a look. “When we approached it, we viewed as nice to have, not need to have,” he added. “So we were only interested in the assets if they were special, and it turns out they were. These will be powerful tools in our toolbox.”
Under the agreement terms, Arrowhead made a previous $7 million cash payment to Novartis and will provide an additional $3 million in cash and $25 million in Arrowhead common stock within 30 days. Shares of Arrowhead (NASDAQ:ARWR) closed Wednesday at $7.51 and was up to $8.15 in premarket trading this morning.
On top of that, Novartis is eligible for undisclosed milestones and single-digit royalties. Further details were not disclosed.
In exchange, Arrowhead gets patent families relating to RNAi trigger design rules and modifications. Not only do those fall outside of patents owned by competitors. Novartis spent “a tremendous amount of resources [on how] to create RNAi trigger structures,” Anzalone said. “We looked through an awful lot of data. [Novartis was] able to find new structures and new chemistries.”
That innovation in RNAi triggers is “not just to enable us not to be sued,” he added. “It now gives us freedom to operate in any indication.”
Novartis’ intracellular targeting ligands also are part of the package. Those ligands are designed boost the activity of RNA triggers by targeting the RNA-induced silencing complex, or RISC, to improve stability once RISC is loaded. “The intracellular targeting ligand approach is novel and it really turbocharges RNAi triggers,” Anzalone explained. “They take the RNAi trigger and make it more effective.”
Lastly, Arrowhead inherits Novartis’ deal with Alnylam, covering RNAi IP for 30 targets – and those are good targets, targets chosen by a big pharma,” Anzalone noted – as well as three programs that have progressed to the preclinical stage. Whether Arrowhead takes any or all of them into the clinical will be have to be determined.
Anzalone declined to offer specifics on those programs but said all “were quite interesting. Any time you can benefit from the big pharma funnel it’s a good thing. Big pharma has a way of deciding good targets to go after.”
Arrowhead has the ability to out-license or partner any programs emerging from the Alnylam license. The company ended 2014 with about $104 million in cash and equivalents. http://www.bioworld.com/content/...r-claim-rnai-space-novartis-deal-0
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