Alnylam CEO John Maraganore On Corporate Near-Termism, and Restoring Faith in RNAi

12/6/10Follow @xconomy

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in clinical studies that are RNAi based programs. We obviously have our three programs. We have licensed IP to a good number of other programs that are out there, so in some ways Alnylam has a footprint across the entire RNAi pipeline. There probably are well north of 500 patients, maybe close to 1,000 patients, who have been enrolled in clinical trials of RNAi therapeutics. From a safety standpoint, we’re not aware of any major issue out there. When we start getting into Phase 2 studies, we’re going to start to see more clinically relevant types of data. I’m confident there’s going to be some good stuff.

X: I looked back at our conversation from almost a year ago, in which you talked about how this is going to be the RNA decade. I think that’s the right way to think about a technology like this, it’s just not realistic for people to think this is some breakthrough that wins the Nobel in 2006 and then new therapies will just start growing on trees two or three years later. But yet, that’s how the stock market works.

JM: Thank God we can shelter ourselves with the cash we have to build this technology up. We’re really grateful for that. It’s a strategic asset for the company. But it’s like Groundhog Day as I said before, we saw this with antibodies in the late ’80s and early ’90s. People were in despair, proclaiming antibodies dead. Then [Eli Lilly's abciximab (Reopro)] gets approved in ’94-95, and now 15 years later we’re looking at a major drug category generating $40 billion in sales and growing fast. This is going to turn around, and it will in an exciting way, and it will happen because of clinical data. Our job is to generate the data, and we’re up to it.

X: It looks to me like 60-70 percent of your value has gone away in the last two years, and what actually happened was that one partnership ended on schedule and another was terminated. But it’s not like your drugs are killing people, right?

JM: One was terminated because the company had an acute case of near-termism.

X: But when I look at a biotech company that loses 60 to 70 percent of its value, usually that’s because your drug caused a major side effect, or you had to terminate your lead clinical program, or you just got rejected by the FDA. Not something like what happened here.

JM: That’s why it’s a great opportunity for new investors.

X: What else is going on there at Alnylam behind the scenes that the external world doesn’t see, that does give you confidence?

JM: An enormous passion among our employees. I’ve never seen our employees more excited, more passionate about what they are doing. Nobody sees that in the outside world. I see it every day.

X: So you didn’t have to encourage people to buck up after the Roche news?

JM: Not at all. We had a restructuring process we had to go through after the Novartis deal, and everybody agreed we had to do it. Ever since that decision, which was hard on a personal level, this company has been remarkably charged with passion. There are people who high-five each other every single day around the office here. It’s a high-five culture.

X: OK, that’s most of what I wanted to ask. Is there anything else you want to add, John?

JM: We love what we’re doing here. I think it’s important that people don’t misinterpret what they heard about the Roche news as some kind of indictment of the technology. At the end of the day, they only invested in the technology three years. Three years is nothing. It’s absolutely nothing. It’s like kicking your three-year-old out of the house and telling him to get a job. You can’t discover a single small molecule for a single disease target to go to the clinic in three years, let alone develop a whole new class of drugs. It’s important that people put it in perspective.

X: If I was a Roche shareholder, I’d be asking those guys, what exactly did you do with that $500 million you spent on RNAi?

JM: (laughs). Exactly.

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  • Geek

    RNAi stock have been sold down mercilessly since the decision by Roche. Alnylam may be a bargain but look at Australia’s Benitec BLT (ASX). It has very valuable IP, possibly more so than Alnylam, and is trading at a market cap of $AUD12 million. These stocks are being manipulated so that big pharma can take them over for a pittance, and nothing is ever done to stop them. People are leaving in droves because they can’t compete with the big boys who have enough money and time to drive the prices down to such ridiculous levels that the small players just give up. It’s a joke.

  • Wes

    History about to repeat itself? When Benitec/CSIRO first got the Graham patent allowed (but not formally awarded) the sp went from 2c to 30c, and sat there for about 6 months. Then the offical certificate came out and it went to $1.30. Months later Nucleonics successfully got a re-exam started, which undermined the sp for the next 6 years down to it’s current 2.5c.

    Have a look at the 10 year chart for BLT at asx.com.au and compare against dates of BLT news releases at benitec.com.au.

    Benitec need to work clear of some dilutionary funding before sp can move, but once they achieve this traction will likely return