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Isis, Alnylam Pair To Seek Disease-Fighting Drugs

A promising new approach to targeting human diseases has generated interest from two rival companies accustomed to partnering for the good of science.

On Sept. 7, Isis Pharmaceuticals Inc. and Alnylam Pharmaceuticals Inc. announced the formation of Regulus Therapeutics Inc., a biotechnology startup in Carlsbad focused on commercializing drugs made with microRNA, or miRNA, technology.

Cambridge, Mass.-based Alnylam pledged $10 million and both biotech companies granted Regulus exclusive rights to intellectual property relative to miRNA technology. The two agreed to fund Regulus equally, following Alnylam’s initial support. Both Alnylam and Isis will retain rights to develop and market products Regulus decides not to develop itself or with a partner.

“This has all the benefits of being a startup with none of the detriments,” said Stanley Crooke, chairman and chief executive officer of Isis.

A Good Fit

Crooke says the decision to form a joint venture made sense given the two companies’ expertise in drug development and RNA interference, or RNAi, a natural mechanism for silencing the production of disease-causing proteins.

Carlsbad-based Isis, founded in 1989, has exploited its knowledge of RNA to discover and develop novel drugs for its own product pipeline and for its partners. The publicly traded company has successfully commercialized the world’s first antisense drug and has 17 drugs in development.

For 2006, Isis reported a net loss of $45.9 million on revenues of $24.5 million, compared with the previous year’s net loss of $72.4 million on revenues of $40.1 million. Isis is traded on Nasdaq under the same name.

Alnylam is a leader in RNAi therapeutics and has collaborated with companies such as Novartis and Merck & Co. Inc. to develop drugs across a broad spectrum of diseases, including cystic fibrosis, Huntington’s disease and liver cancer. The company is traded as ALNY on Nasdaq.

“It was very clear to both parties that microRNA represented a great new opportunity and we weren’t funding it sufficiently,” Crooke said.

MiRNAs are small, naturally occurring molecules that regulate genes in organisms such as plants and humans. They have the potential to form the basis for a new class of diagnostics and therapeutics. It is estimated that more than 30 percent of human genes are under the control of miRNAs.

Little is known about miRNA function in human cells, but studies have identified its potential in treating several diseases in the areas of cancer, viral infection and metabolic disorders.

Unlike mainstream RNA, which is copied from DNA to build proteins, microRNA is not translated into proteins. Its main function is to “downregulate” gene expression, a process that protects the cell during drug overstimulation.

Targeting Disease Pathways

Scientists know microRNA plays a role in disease formation, but have only begun to understand its biological function.

Scientists believe the technology shows promise in its ability to target entire disease pathways instead of a single disease target.

“It was always sort of assumed this is unnecessary DNA that had no function,” said Scott Hammond, an assistant professor in the department of cell and developmental biology at the University of North Carolina School of Medicine and a Regulus scientific adviser. “Now, people are starting to come around to realize there is some biology role for this non-coding DNA. There are a lot of labs becoming interested in microRNA.”

Rosetta Genomics, based in Israel, has also been active in pursuing miRNA potential. The company, which completed an initial public offering this year, is trying to use its academic licenses and miRNA-related intellectual property to design diagnostic tests for tumor detection.

“Right now the biggest challenge is figuring out which microRNAs have a functional association to disease,” Hammond said. “The other challenge is to design an appropriate inhibitor of the microRNAs.”

Regulus’ Role

Part of Regulus’ task will involve designing inhibitors to miRNAs, or inhibiting the inhibitor, which could increase expression of genes needed to fight diseases.

John McCamant, editor of the Medical Technology Stock Letter in Berkeley, says the key to the new company’s formation will be deriving value out of its scientific discoveries.

“Obviously, these are the two players out there that are accessible,” he said.

The relationship between Isis and Alnylam began in 2004, with a broad strategic alliance that combined Isis’ intellectual property and drug discovery and development expertise with Alnylam’s intellectual property and research expertise in RNAi therapies.

Since then, Isis and Alnylam have co-exclusively licensed intellectual property relating to all therapeutic uses of microRNAs from the Max Planck Society, establishing a joint commitment between the two companies in the microRNA space.

“If nothing else, (Isis has been) prolific at creating IP,” McCamant said. “Now, they’ve shown us, over the last seven or eight years, they can create value for their investors. That’s key as a public company.”


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