Novartis' nearly $10 billion buyout of The Medicines Company caps a dramatic revival of fortunes for a research field large pharmaceutical companies once spurned.
Over the past year, Johnson & Johnson, Eli Lilly, Regeneron, Roche, Novo Nordisk and now Novartis have inked deals to gain access to drugs based around a technology called RNA interference, or RNAi.
Such interest from big pharma contrasts sharply with that of nearly a decade ago, when Novartis and fellow Swiss drugmaker Roche unexpectedly pulled back from efforts to transform the Nobel Prize-winning science describing RNAi into medicines.
"Clearly in the early part of this decade, we saw a major shift away from the field," said John Maraganore, CEO of RNAi-focused Alnylam Pharmaceuticals, in an interview. "Starting in 2014 with our Sanofi deal and lately other deals, including this acquisition of Medicines Co. from Novartis, we've seen pharma come back."
"RNAi has got its sexy back," added Maraganore, who has led Alnylam since 2002 through RNAi's initial boom, retreat and current resurgence.
Alnylam's work has resulted in the first two RNAi drug approvals, first with Onpattro last year and then with Givlaari last week. Medicines Co.'s acquisition is, in part, a reflection on Alnylam, too: The drug at the center of the deal, inclisiran, was discovered by Alnylam and licensed to Medicines Co. in 2013.
Other RNAi companies like Arrowhead Pharmaceuticals and Dicerna Pharmaceuticals are also enjoying pharma's renewed interest in the space, and both have recently partnered with larger drugmakers.
"We believe last week reflected an inflection point for RNAi as a drug technology, and we believe [Medicines Co.]'s acquisition by [Novartis] is potentially the start of a broader wave of consolidation for the drug class," wrote Baird's Madhu Kumar in a Nov. 25 note to investors.
Recent pharma deals buying into RNAi
|Pharma||RNAi partner||Target condition||Deal terms|
|J&J||Arrowhead Pharmaceuticals||Hepatitis B||$250M upfront + equity, $3.5B in milestones|
|Eli Lilly||Dicerna||Cardiometabolic, neurodegenerative diseases||$200M upfront + equity, $350M per target in milestones|
|Regeneron||Alnylam||Ocular and CNS diseases||$800M upfront + equity, $200M in milestones|
|Roche||Dicerna||Hepatitis B||$200M upfront, $1.5B in milestones|
|Novo Nordisk||Dicerna||Cardiometabolic diseases||$225M upfront + equity, $358M per target in milestones|
|Novartis||Medicines Co.||High cholesterol||$9.7B on a fully diluted basis*|
*Acquisition SOURCE: Companies
Unlike monoclonal antibodies and small molecule drugs, RNAi-based medicines don't directly act on disease-causing proteins.
Instead, such drugs leverage a natural process through which the body's cells can disrupt, or "silence," gene expression by degrading messenger RNA. In theory, this stops cells from producing problematic proteins in the first place, offering drugmakers a way to get at disease targets that otherwise couldn't be reached.
Conceptually similar approaches exist in antisense oligonucleotides like Biogen's Spinraza or in exon-skipping therapies like Sarepta Therapeutics' Exondys 51.
"It's too soon to proclaim George Bush's 'Mission Accomplished' and we're not going to," said Maraganore. "But you could begin to see over the next five to 10 years the RNA therapeutic field really rivaling what you see with monoclonal antibodies."
While RNAi was first described by Andrew Fire and Craig Mello in 1996, translating that discovery into something drugmakers could use took decades of experimentation, particularly around delivery into the body.
Sorting out those challenges took patience that Novartis, Roche and Merck & Co. didn't have.
Novartis, which had licensed technology from Alnylam, opted against extending the partnership in 2010 — triggering layoffs at Alnylam — and sold off what it kept to Arrowhead in 2015. Roche, which paid Alnylam $331 million in 2007, shuttered all of its RNAi work in 2010 as well.
And Merck, the buyer of early RNAi player Sirna Therapeutics, abandoned its $1.1 billion investment in 2014.
That year marked an upswing in Alynlam's trajectory. The biotech bought the Sirna assets from Merck and signed a since-revised research deal with Sanofi that helped sustain it through a damaging clinical setback for what was once Alnylam's lead drug, called revusiran.
Novartis and Roche have now bought back into RNAi, and a Food and Drug Administration OK for Givlaari makes Alnylam one of the few biotechs to win approval for two drugs it discovered. The successful development of both Onpattro and Givlaari also ease safety concerns around RNAi, particularly after patient deaths in the study testing revusiran.
Onapttro and Givlaari, though, both treat rare diseases. Novartis' buyout of Medicines Co. and the recent collaboration deals by J&J, Lilly, Regeneron, Roche and Novo Nordisk aim to apply RNAi technology more broadly.
Medicines Co.'s inclisiran, for example, is designed to lower cholesterol levels in patients with atherosclerotic cardiovascular disease or a genetic disease that results in high amounts of cholesterol in the blood. It's a market that potentially includes tens of millions of patients, and will pit RNAi against two approved monoclonal antibodies that work similarly.
Alnylam and Regeneron, meanwhile, hope to expand the use of RNAi to diseases rooted in organs outside the liver, the target of Onpattro, Givlaari and inclisiran. Maraganore is hopeful RNAi will prove itself in the central nervous system and the eye, too, but the first human trials there remain some 12 to 18 months away.
Pharma, of course, is drawn most readily by products it views as capable of contributing to its top-line revenues and bottom-line profits.
And it's there where RNAi-based medicines remain unproven. Alnylam is just getting started in selling Onpattro and soon Givlaari while, if approved, inclisiran will join two PCSK9 inhibitors in a market that's widely underperformed expectations.
"In the early period, the 2010 timeframe, there really weren't significant products at that time. Now it's happened," said Maraganore, and "it does widen the eyes of major pharma companies."
The next few years will test whether pharma gets what it thinks it's seeing.