- Roche will pay privately held Arrakis Therapeutics $190 million in a wide-ranging deal to co-develop small molecule drugs that target RNA molecules.
- Cambridge, Massachusetts-based Arrakis will handle the early drug development work, after which Roche can license those that show promise and take the lead on clinical testing. The deal includes a variety of conditional payments that could ultimately exceed "several billion dollars," though that cash is tied to milestones and may never materialize.
- Arrakis is one of several emerging companies aiming to target shifty RNA molecules with chemical drugs. Their approach offers the potential to reach drug targets inside cells that are difficult to get at through other methods.
RNA, the molecular strands that turn cell's genetic blueprints into proteins, have long been the unwitting targets of chemical-based medicines. But a concerted effort has emerged over the past few years to design small molecule drugs that purposefully block the stands of nucleic acid from functioning. Increasingly, large pharmaceuticals and biotechs have begun to show interest, too.
The challenge is significant. It's historically been considered futile to target RNA with small molecules because the nucleic acids continuously change shape and move around inside cells. Instead, some biotechs have used interfering RNA sequences to disrupt production of disease-causing proteins in the body's cells. Such approaches, used by companies like Alnylam Pharmaceuticals and Ionis Pharmaceuticals, come with their own challenges, however.
Work published by a team at the Scripps Research Institute in 2016 began to change the thinking on using chemical drugs to target RNA, leading to the idea that one could effectively freeze those molecules. Once frozen, the RNA can't move or perform a particular task, such as making a potentially harmful protein. Doing so, the thinking goes, might help clear a path to previously untouchable drug targets.
The concept has led to the creation of a number of startups. Since 2017, Arrakis, Skyhawk Therapeutics, Gotham Therapeutics, Expansion Therapeutics and Accent Therapeutics — each employing similar strategies — have raised money from venture firms, reflecting a surging interest in the space. They are all early in their drug development work, but have begun to attract partnerships with other drugmakers. Skyhawk, for instance, has deals in place with Merck & Co., Biogen and Celgene, among others.
"Truth be told, it took us time to figure this out", wrote CEO Michael Gilman, a veteran of Biogen and former head of two acquired biotech startups, Stromedix, and Padlock Therapeutics, in a blog post Wednesday morning. "Finally, we cracked the code."
Arrakis now has a pipeline that includes potential drugs for cancer, neurological diseases, rare disorders, and dyslipidemia. The Roche deal is the company's first, but it marks one of the largest bets on RNA-targeting small molecule drugs as measured by guaranteed upfront cash. Arrakis is getting a $190 million check with "several" billions of dollars in potential upside, according to the companies.
Gilman predicts more to come from the field. "It's a hot area for pharma and this will certainly not be the last deal in this space," he wrote to BioPharma Dive in an email.
The agreement was hammered out in an exceptionally difficult time for business negotiations, as the coronavirus pandemic has forced self-quarantines across the globe and curtailed most business travel.
In the post, Gilman noted the "face-to-face sessions that lubricate relationships and facilitate negotiation simply couldn't happen." The Roche deal team canceled a mid-March trip to Boston and instead worked with Arrakis via video chat, negotiating from each others' homes in "T-shirts and hoodies."
Discussing a deal by video did have some upside, though. "Not that I recommend pandemic negotiation as a strategy," Gilman wrote, "but I truly believe the circumstances helped us see one another as people and helped get this deal done."