Alnylam and Isis’ Offspring, Regulus, Keeps Pushing on Biology’s ‘Bleeding Edge’

7/28/09Follow @xconomy

Regulus Therapeutics, its CEO admits, is a child of privilege. It was born two years ago with a silver spoon in its mouth—some hot intellectual property to make drugs based on emerging knowledge about microRNA biological networks. It has a couple of parents with wealth and pedigree: Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY), and Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS).

Since we’re watching closely to see how innovation is affected during this economic downturn, I figured it seemed reasonable to check whether ideas on the real frontier of biology can still be sustained at a place like Carlsbad, CA-based Regulus, which we first profiled back in October. CEO Kleanthis Xanthopoulos says he’s always worried about financing—it’s the nature of being a biotech CEO—but enough positive things have happened this year that he says the company has still been able to grow.

That’s no small thing, because companies pursuing microRNA know they are staring at what amounts to a 20-year vision to develop a new class of therapies, as Xanthopoulos pointed out in that first story in October. The key is showing people enticing bits of progress along the way. Regulus did that around Thanksgiving, when it published a scientific paper in Nature that was the first to demonstrate a therapeutic benefit in animals by blocking a strand of microRNA. The company raised $20 million from its corporate parents a couple months later, then scored an undisclosed sum of cash from its big partner, GlaxoSmithKline, back in May when it reached a milestone as part of a collaboration worth as much as $600 million. The company has almost doubled in size, from 22 employees last October, to almost 40 today, Xanthopoulos says.

“Am I concerned about financing? Always. I’m paranoid when it comes to financing,” Xanthopoulos says. “It’s a capital-intensive business, with long development timelines. But we’re really well-capitalized.” He has at least three years of operating cash on hand, and the company recently re-organized in a way that allows Regulus to attract institutional investors, he says.

Regulus is hoping to keep the momentum going with some more data, which hasn’t yet been published in a peer-reviewed journal, that says that by blocking a different strand of microRNA, known as mir122, it can block the replication of the hepatitis C virus in a laboratory dish, and in chimpanzees, Xanthopoulos says. This is interesting because hepatitis C is one of those diseases in which the animal models tend to be fairly accurate predictors of how a drug will work in people, Xanthopoulos says. Since hepatitis C is undergoing a drug development renaissance of sorts, with more than 40 different drugs in clinical trials, Xanthopoulos is wagering that he can find another partner to help support his company’s R&D. More than one drug company is interested in the data, he says.

MicroRNA, as a reminder to those who may have missed the earlier stories, are tiny strands of RNA that serve like regulatory switches that control full networks of genes. They were first discovered to exist in humans in 2001. Scientists say they have great potential against complex diseases that involve many genes, like cancer, diabetes, heart failure, or autoimmune disease. But there’s a lot of work to do in characterizing what these networks do, not the least of which involves making sure a drug based on microRNAs doesn’t shut down some biological process that turns out to be really important.

One of the big challenges for Regulus is staying disciplined on the programs it has chosen to pursue, and not following every bright idea that comes in over the transom. About 20 to 30 interesting reports about microRNA from academic scientists are getting published every week now, Xanthopoulos says. “An incredible amount of knowledge is being transferred,” he says.

And while some of that knowledge is likely to lead in the right direction, some won’t, and choosing the right balance of what to pursue is part of what makes Regulus a real biotech tightrope act. “We’re not at the cutting-edge, we’re at the bleeding edge of the biological frontier. We are dealing with a big idea, and it’s exciting,” Xanthopoulos says.

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