By Malorye A. Branca

October 15, 2002 | A clever new way to silence genes added a little sizzle to this summer’s otherwise dull biotech market. Excitement about RNA interference (RNAi) caught investors’ attention and helped renew overall interest in drugs that target RNA -- the key stepping stone in the path from gene to protein.

In early August, Alnylam Pharmaceuticals announced it raised $17 million in early rounds of equity financing. Alnylam was founded earlier this year by Polaris Venture Partners, Cardinal Partners, and a small band of RNAi pioneers, including Nobel laureate and Biogen founder Phillip Sharp. Sharp is also the current director of the McGovern Institute for Brain Research at MIT. Alnylam aims to develop RNAi-based drugs for cancer, infectious diseases, and inflammation.

Cenix Bioscience in Dresden, Germany, meanwhile, just raised $4.9 million in an early financing round led by EMBL Technology Fund and BankInvest Biomedical Venture. Cenix is pursuing drug discovery based on RNAi.

“RNA has been largely ignored because it is difficult to work with,” says David Nelson, associate director for corporate development and investor relations at San Diego-based Anadys Pharmaceuticals Inc., another startup looking into RNA therapeutics. Anadys, which was founded in 2000, announced in July that it had raised $38 million in later-stage venture funding. “By assembling the right set of tools to systematically go after RNA, we’re opening up the other half of the playing field.”

The Rise of RNA

Most drugs are targeted against proteins -- the ultimate actors in disease. Designing drugs that bind to RNA requires learning a new set of rules.

RNA is made up of nucleotides, the same kind of stuff [material?] that is found in DNA. In RNAi, very short bits of double-stranded RNA called siRNAs (small interfering RNAs) destroy matching strands of RNA. The siRNAs achieve this by splitting into two strands, aligning one strand on the target RNA, and then mobilizing an enzyme that chops up the target.

Scientists have just begun using RNAi to mute disease-related genes in cell cultures and animal models. But initial results have generated a great deal of excitement in both academia and the commercial realm (see “Worms Feed Gene Function Analysis Using RNAi,” April 2002 Bio•IT World). The process seems to be both very specific and effective -- two critical characteristics.

The biggest rewards will come to the company that coverts RNAi’s promise into an actual drug, which Alnylam hopes to do. But to scores of companies like Amgen, Exelixis, Qiagen, and Devgen, RNAi has already become a favorite tool to find out what specific genes actually do in the cell. Big Pharma is also joining the fray. Novartis, for example, recently expanded its collaboration with Compugen to include a “large-scale RNAi platform.”

Compugen is helping Novartis build a human genome, transcriptome (gene expression), and proteome database. As part of this effort, the two companies are generating a library of molecules that target RNA for interesting genes. “The issue in RNAi is not producing the molecules but designing them properly,” says Lior D. Ma’ayan, Compugen’s executive vice president for corporate development. “Our knowledge of the transcriptome will help us do a better job of that.”

RNA can also be silenced using other approaches, including antisense and small molecules; small molecules are the most common type of drug approved. Antisense acts in a similar manner to RNAi but starts with just a single strand of molecules matched to the RNA target.

One of the hot emerging biotechnologies of the 1990s, antisense suffered many early setbacks but finally may be set to deliver. “There are at least 20 antisense drugs in clinical development, with three in Phase III,” says C. Frank Bennett, vice president of antisense research at Isis Pharmaceuticals Inc. in Carlsbad, Calif. Isis has 13 of those drugs.

Bennett says most of the problems that beset antisense were the typical drug discovery-related hurdles. “We have had to deal with failures in the clinic just like everyone else,” he says.

But there have been additional challenges. “These drugs exhibit unique pharmacokinetic properties. They don’t do everything you ask of them,” Bennett adds. For example, antisense compounds can’t cross the protective barrier that surrounds brain tissue. There’s a plus side as well. “It’s much faster to identify a lead antisense compound than a small molecule,” he says.

Late clinical-development phase products of any kind are hot properties today, and so antisense may be arriving at just the right time. Bennett says Isis is not necessarily getting more deals, “but the deals we get are bigger.”

Getting to the Clinic on Time

RNAi will face many of the same challenges antisense has already seen, but at least RNA-targeting is now a more mature field. “In the last five years a tremendous amount of information has been published around RNA structures,” says Kleanthis Xanthopoulos, Anadys’ president and CEO.

Anadys has a library of 1,300 proteins that interact with RNA in the body. With help from collaborators at the European Molecular Biology Laboratory in Heidelberg, Germany, they have developed a set of software tools to search the genome and fish out more such proteins.

“Half a dozen companies now claim expertise in RNA,” Xanthopoulos says. “It doesn’t matter how beautiful your target is if you don’t have an equally beautiful compound for it.” Hence, Anadys has put as much effort into chemistry as biology. 

Anadys also pumped up its pipeline by licensing compounds, and has 64 patents. The company is trying to build novel protein- and RNA-targeting drugs for infectious diseases, including hepatitis C.

It’s not clear which particular method of targeting RNA -- small molecules, antisense, RNAi, or ribozymes (another type of naturally occurring RNA) -- will work best. Anadys is hedging its bets by starting with small molecules but keeping the door open for antisense.

“We certainly hope that antisense and ribozymes will work,” Nelson says. “There is just more tweaking needed there.”

Isis is also playing the field, and evaluating all the leading approaches. “The main difference we see is that RNAi works well for target validation in cell culture-based assays. To date we have not seen it work well in vivo applications [i.e. animal models],” Bennett says.

Alnylam and a string of other RNAi startups will try to disprove that assertion.

Whichever technology wins out in the end, a series of approvals for antisense will be a big win for everyone, particularly in today’s landscape of investors who have gone cold on new technologies.

“A lot of people are sitting on the fence about this field,” Bennett says. “Our job is to deliver the products that will convince them.”