Alnylam Chief Foresees Another Gene-Silencing Spin-Off, and More News Tidbits from Boston’s MassBio Investors Forum

10/7/09

Alnylam Pharmaceuticals (NASDAQ:ALNY) had more than $470 million in the bank as of the last official count at the end of June, so it struck me as odd that the Cambridge, MA-based developer of gene-silencing drugs was a presenter along with dozens of cash-starved biotech startups at the MassBio Investors Forum in Boston yesterday. Alnylam and its poorer biotech counterparts made some interesting buzz.

While Alnylam is richer than the vast majority of biotech firms, the company still appears to have a thirst for new alliances. The firm, which is a leading developer of RNA-interference (RNAi) drugs, already counts Roche, Novartis, Takeda, and Medtronic among its bevy of collaborators. And Barry Greene, president and chief operating officer of Alnylam, told the folks at MassBio to expect more major alliances to surface in the coming months—the company told investors in January that it aimed to close at least two more major new alliances in 2009.

Alnylam dropped some hints yesterday about its plans to spin off another startup akin to Carlsbad, CA-based Regulus Therapeutics, which was founded by Alnylam and Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ:ISIS) as a joint venture for developing microRNA drugs in 2007. Alnylam CEO John Maraganore told Xconomy back in February about a number of other technologies inside Alnylam with spinoff potential, like methods for enhancing stem cells for regenerative medicines, or immune-system compounds called adjuvants, that can boost the potency of vaccines.

Greene said there could be another “Regulus-like” deal in the works at Alnylam. When I pressed him for details after his presentation, he demurred yet did reiterate that his company, which is already pursuing the development of biological drugs that mute disease genes, has an interest in doing more in the vaccine and stem cell fields. While this mysterious “Regulus-like” deal now exists as speculation, it could be interesting to see how Alnylam finds new ways to reap value from its existing portfolio of drug candidates or RNAi patents. Such joint ventures enable companies to explore new areas without taking on all the financial risks associated with drug development on their own. For sure, Greene’s comments will likely stir up gossip about potential deals in the works at Alnylam.

Besides Alnylam, other Boston-area life sciences firms that made pitches at MassBio appeared to be making progress. Here are several tidbits that I gathered about EyeGate Pharma, Cequent Pharmaceuticals, and other firms during my travels at the annual investor conference:

—Stephen From, CEO of Waltham, MA-based EyeGate Pharma, said his existing venture investors have committed $12 million for a planned $20 million to $25 million financing round. EyeGate, which is developing drug-device combo products for eye diseases, has previously raised $31 million in three rounds of financing. The firm’s lead drug candidate is ready to enter pivotal clinical trials for dry eye syndrome, having already completed two Phase II studies with the product, From said. The lead candidate is a reformulated version of a generic corticosteroid. The firm’s drug-delivery device is designed to use an electrical current to propel drug molecules into the white part of the eye. The system is engineered to deliver higher amounts of drug than ordinary eye drops while avoiding needles that are often used to administer treatments to the eye. (We took a deeper dive into EyeGate’s drug-delivery method last year.)

In addition to the financing, EyeGate has struck a non-exclusive deal with a large pharmaceutical company to provide its technology for delivering protein-based drugs, and a similar deal is in the works for delivering nanoparticle drugs, From said, without disclosing any further details. He did say that financial conditions have caused the firm to focus on its lead drug for dry eye while putting its antiviral treatments on the back burner. “You’ve got to choose the program that can deliver the most value in the shortest possible time frame,” he said.

—Here’s some more RNAi news of a different variety. Cequent Pharmaceuticals, based in Cambridge, hopes to file its papers to put its first RNAi drug in clinical trials later this month, according to Ted Hibben, chief business officer of the startup. The company’s lead drug is designed to silence a gene linked to colon cancer called beta-catenin. Cequent, which is a spinout of Beth Israel Deaconess Medical Center, is developing oral RNAi drugs that use modified E. coli bacteria to carry the drugs into the gut. It calls this approach transkingdom RNAi. Hibben said that the firm is raising $15 million in a yet-closed Series B round to take the company through Phase II clinical trials with its lead colon cancer drug. The firm is planning to conduct its first clinical trial of the drug with 28 patients at the Fred Hutchinson Cancer Research Center in Seattle.

—Almost by accident I found out that a group in geneticist George Church’s lab at Harvard Medical School has formed a new diagnostics startup called Pathogenica. Yemi Adesokan, a research fellow in Church’s lab and one of the fledgling firm’s co-founders, told me about the startup during lunch. The group is talking to investors about raising $500,000 in a seed round. I’m planning to get more details on the operation, but my notes written on the back of Adesokan’s business card indicate that the firm’s technology could be used to identify more than 75,000 different pathogens. That sounds like a lot.

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