By David Orchard-Webb, PhD, Freelance Consultant and Medical/Biotech writer
By David Orchard-Webb, PhD, Freelance Consultant & Medical/Biotech writer
This piece represents the views of the author and not necessarily the views of Informa Connect.
Introduction
This whitepaper looks at the challenges and opportunities facing the peptide and oligonucleotide therapeutics industry in partnering, business development and commercialization strategies, using a number of case studies. The drug space is enormous and the fields of peptide and oligo development dynamic, with both technologies converging upon intracellular targets, as well as traditional extracellular ones, making the possibilities for collaboration, licensing and investment, large.
When to choose a CDMO?
Early on in drug discovery there are a whole range of concerns that need to be considered if a drug is to move forward to the next stage. Smaller companies with exceptional expertise in certain areas may require outside resources for some of the more generic and regulatory focused concerns. Companies in the oligonucleotide space often face a dilemma, they are experts in disease biology and how to make RNA that specifically targets disease processes, however during development they may have used a generic solution to deliver their construct into cells. They may not be experts in therapy delivery. Other issues include preclinical safety assessment and toxicology studies.
Under such circumstances, the company can either spend time developing or hiring expertise in delivery vectors such as lipid nanoparticles or they can out-license the encapsulation and manufacture of their RNA product to a contract manufacturing organization (CDMO), such as Avanti Polar Lipids. Companies such as Charles River can provide expertise in safety and toxicology models.
Assuming manufacturing is successful a second problem may occur in the transition to scale, the company may never have taken a product through phase III clinical trials and may lack the resources. At such a point the merits of licensing/partnering with big pharma should be considered.
Out-licensing of product manufacturing to Pharma
One such example is Reblozyl (ACE-536) a ligand trap that inhibits members of the TGF-beta superfamily involved in late stages of erythropoiesis. The U.S. Food and Drug Administration (FDA) granted approval for Reblozyl (ACE-536) in November 2019, for the treatment of anemia in adult patients with beta thalassemia who require regular red blood cell transfusions. In 2011, Acceleron Pharma and Celgene Corporation, now part of Bristol-Myers Squibb, announced that the companies had entered into a joint development and commercialization agreement for ACE-536 in the treatment of anemia. Celgene and Acceleron jointly developed, manufactured and commercialized ACE-536. Celgene had an option for future Acceleron programs developed for anemia and made an upfront payment to Acceleron of USD $25 million. Thus, Acceleron gained both expertise in manufacturing at scale and cash flow from the licensing partnership with big pharma. Another example is JNJ-3989, formerly ARO-HBV, is a sub-cutaneous, ribonucleic acid interference (RNAi) therapy candidate designed to silence all HBV gene products and intervenes upstream of the reverse transcription process where current standard-of-care drugs act.
In 2018 Arrowhead Pharmaceuticals entered into a license and collaboration agreement with Janssen Pharmaceuticals, part of the Janssen Pharmaceutical Companies of Johnson & Johnson, to develop and commercialize JNJ-3989, which Arrowhead had previously solely developed. In addition, Arrowhead entered into a research collaboration and option agreement with Janssen to potentially collaborate for up to three additional RNA interference (RNAi) therapeutics against new targets to be selected by Janssen. The transactions had a combined potential value of over $3.7 billion for Arrowhead.
As with the Acceleron deal Arrowhead gained the resources they needed to fund and operationally execute large later-stage clinical trials. They also built a pathway for the development of their very early stage therapeutics.
Investments
Investments in the oligo and peptide space are largely driven by market forces such as the emergence of fatty liver disease and the recent coronavirus outbreak. That said rare diseases provide an excellent opportunity to establish value with proof of concept, especially for companies focused on RNA interference.
As a shareholder the potential for return in rare disease is large, for example when Roche acquired Spark Therapeutics for $4.3 billion. The CHOP Foundation collected about $430 million of that total from its Spark shares — a huge return for the hospital’s $33 million investment. Venture capitalists and investment funds that backed the company early also profited massively.
Trends in the investment landscape
Non‐alcoholic fatty liver disease (NAFLD) is the most common liver disease in historically industrialized nations, and its more serious form non‐alcoholic steatohepatitis (NASH) are especially highly prevalent in patients with metabolic disorders such as type 2 diabetes and obesity. A major cause of liver fibrosis and cirrhosis, NASH is an area of high unmet medical need with no approved treatments available.
AKR-001 is an Fc-FGF21 fusion protein engineered to mimic the biological activity profile of native FGF21, an endogenous hormone that regulates lipid and energy metabolism, and is secreted throughout the body to alleviate cellular stress. Observations from clinical trials of AKR-001 and other FGF analogs point to AKR-001's potential to reduce liver fat, cellular stress, inflammation and fibrosis in people with non-alcoholic steatohepatitis (NASH), as well as to improve risk factors of cardiovascular disease, the principal cause of death among NASH patients.
Akero Therapeutics has raised a total of $135M in funding over 2 rounds. Their latest funding was raised on Dec 12, 2018 from a Series B round. The company has a market cap of USD $621.7 million and expects a data release from a Phase 2a (MRI‐PDFF) on AKR-001 in March.
As mentioned above investing in rare disease has potentially lucrative returns. Peptide and oligo therapeutic companies are at the cutting edge of rare disease therapy and are prime candidates for investment.
The leading cause of combined deafness and blindness is Usher syndrome, a rare genetic disease. Patients with Usher syndrome type 2 (USH2), the most common type of Usher syndrome, have a moderate to severe hearing impairment from birth. They usually experience the first symptoms of night blindness in their 20s, which progresses to complete blindness by the time they are over 30.
ProQR Therapeutics is developing an investigational oligonucleotide drug called QR-421a to treat progressive blindness in patients that have USH2 due to a mutation in exon 13 of the USH2A gene. QR-421a is an oligo that causes exon skipping, thereby removing the mutation in exon 13.
A first-in-human clinical trial of QR-421a is ongoing in Europe and North America. The Phase 1/2 study, named STELLAR, will include approximately 18 patients that experience vision loss due to mutation in exon 13 of the USH2A gene. ProQR raised USD $97.5M at IPO and has a market cap of USD $352.7 million with interim results from STELLAR expected to be available in March.
A number of companies are scrambling to develop COVID-19 vaccines and therapeutics with Moderna, Inc. seen as the most advanced to develop a vaccine. The company will be initiating human clinical trials for its vaccine in April. Notably Sirnaomics, Inc have also responded but are at a much earlier stage.
Case study of investment partnership
Apellis Pharmaceuticals Inc., a clinical-stage biopharmaceutical company focused on the development of novel therapeutic compounds to treat disease through the inhibition of the complement system recently initiated a novel, risk-sharing collaboration to support the development of APL-2, a synthetic cyclic peptide conjugated to a polyethylene glycol (PEG), in hematologic indications with SFJ Pharmaceuticals, a global drug development company backed by Blackstone Life Sciences and Abingworth.
The collaboration is the first time that SFJ Pharmaceuticals has partnered with a pre-revenue biopharma company. Under the terms of the agreement, SFJ has agreed to pay Apellis USD $60 million in support of the paroxysmal nocturnal hemoglobinuria (PNH) clinical program, with up to an additional $60 million based on Apellis meeting specific, pre-defined clinical milestones. Subject to mutual agreement, SFJ may also pay Apellis an additional $50 million in funding for the PNH clinical program following a specified, pre-defined clinical milestone.
Under the terms of the PNH agreement, Apellis will pay SFJ regulatory approval milestone payments in annual increments at a pre-determined payment schedule over six years, with the majority of payments to SFJ due in years 3-6 following regulatory approval. No approval payments are owed to SFJ should regulatory approval not be achieved for PNH. Apellis has an option to buyout of all or part of the milestone payments at any time following regulatory approval at a discounted rate. Apellis retains exclusive worldwide commercial rights to APL-2 in all indications.
SFJ Pharmaceuticals has taken a calculated risk that could pay off massively, provided their assessment of Apellis’ ability to deliver an effective therapeutic was correct. They have limited their risk by having conditional milestones. The incentives for Apellis are great and will provide the funding they need to deliver their therapy, provided it turns out to be effective.
Entrepreneurs in life sciences
Usually, a new life science startup originating from a University is created when a scientist, through initial government or foundation grants, discovers a pathway, mechanism in biology, or drug development tool that is particularly novel and judged to have a good chance of competing in the biotech marketplace. A disclosure is filed through the university office and discussions are initiated with the technology transfer or licensing officer at the university about commercializing the discovery. A small business innovation research grant (SBIR) may be submitted to fund startup activities, which may require matched funds from the applicant.
Patrick Y. Lu, Ph.D, started his biopharmaceutical industry career in 1993 as a lab head in Novartis and was the co-founder and Executive VP of Intradigm Corporation (2001-2006). Patrick has authored more than 50 scientific papers, review articles and book chapters, and is an inventor for more than 50 issued and pending patents. In his latest venture, Sirnaomics has raised more than US$70 million dollars and has developed a series of “first-in-class” siRNA therapeutic candidates at different phases of clinical studies, in both USA and China. The company’s therapeutic programs are focused on anticancer and antifibrotic indications. Sirnaomics is also currently investigating treatment targets for coronavirus COVID-19 (SARSCoV-2).
Dr. Monia is the chief executive officer and a founding member of Ionis Pharmaceuticals. His contributions at Ionis include research into the medicinal chemistry and mechanisms of action of RNA-targeting modalities to treat human diseases, most notably antisense-based therapeutic strategies. Dr. Monia has published more than 200 primary research manuscripts, reviews and book chapters, and is an inventor on more than 100 issued patents. Dr. Monia is also an adjunct professor of biology at San Diego State University where he lectures at the graduate level on pharmacology.
Technological Advances
Several companies are developing cell penetrating or lytic peptides that activate the immune system. AMAL Therapeutics SA, which was recently acquired by Boehringer Ingelheim, is developing a self-adjuvanting (TRL activating) peptide platform, with a multiantigenic domain with room for four antigens, and a cell penetrating peptide domain for efficient antigen delivery to immune cells such as dendritic cells. GV1001 is a 16-amino acid fragment of the human telomerase reverse transcriptase catalytic subunit (hTERT) developed as a cancer vaccine by KAEL-GemVax and also found to be a cell penetrating peptide through interaction with heat shock proteins. Lytix Biopharma develops proprietary oncolytic peptides. Lytix's lead candidate, LTX-315, is developed for intratumoral treatment of solid tumors.
In addition to being a catalyst for acquisitions, this technology is of great interest to investors. For example, Lytix Biopharma has already raised a total of USD $10.4M in funding from 7 investors.
Changing technologies impacting the biotech investment landscape
Peptides have traditionally been viewed to act predominately extracellularly, whereas oligonucleotides usually act within the cell. This prescribes their potential applications, however with the advent of cell penetrating peptides and also the ability to couple them with technologies such as T-cell receptor (TCR), it is possible to target intracellular processes with peptides as well as oligonucleotides.
From an investment perspective this means that funds that traditionally looked for intracellular pathways and technologies such as oligonucleotides, should now also cast their eye on peptide possibilities and realize that a peptide can be adapted to target intracellular processes, practically this means that oligos and peptides can “knock-down” or “trap” intracellular targets, respectively, in equal measure.
Mergers & Acquisitions
On November 24, 2019 Novartis acquired The Medicines Company, which was developing Inclisiran, potentially the first and only cholesterol-lowering therapy in the siRNA (small-interfering RNA) class. Inclisiran is a twice-yearly therapy in Phase III clinical development to evaluate its ability to reduce lowdensity lipoprotein cholesterol (also known as LDL-C).
The transaction is expected to close in the first quarter of 2020. Until closing, Novartis and The Medicines Company will continue to operate as separate and independent companies.
Under the terms of the agreement, Novartis will, through a subsidiary, commence a tender offer to purchase all outstanding shares of The Medicines
Company for USD $85.00 per share in cash. The Medicines Company is intended to become an indirect wholly-owned subsidiary of Novartis. The transaction is subject to customary closing conditions, including antitrust clearance.
On February 4, 2020 the Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) released joint guidance concerning competition for biologics, including biosimilars. The joint guidance was intended to enhance competition for biologics and reduce manufacturers’ use of false or misleading promotional communications concerning the efficacy or safety of biosimilars and other biologics. The primary goal of the guidance appears to be to reduce the cost of medications for consumers and increase the level of competition in the biologics space. A merger intended to shut down a competing product would fall on the wrong side of antitrust.
Conclusion
Entrepreneurship, partnering, licensing, investment, and mergers & acquisitions within the oligonucleotide and peptide therapeutics industry is extremely robust and only likely to grow in the coming years with the development and maturation of new technologies. All of these elements play a role and at least a few, such as strong investment, big pharma acquisition, or outstanding entrepreneurship, are essential for fast tracking the path of therapeutic products to commercialization.
