Alnylam Takes Moment to Pause on Cutting Edge, Mull Options on RSV Game Plan

Navigating the world of cutting-edge drug development can be thrilling, but you can sometimes find yourself in a gray zone. That’s the impression I got from a conversation yesterday with Alnylam Pharmaceuticals CEO John Maraganore about the many options he’s carefully mulling over before deciding whether to bet bigger company resources on his lead drug candidate.

Cambridge, MA-based Alnylam (NASDAQ: ALNY) announced last month at a medical meeting in Beijing that its lead drug, ALN-RSV01, reached its goal of showing safety in adult patients with respiratory syncytial virus infections of the lungs. The study, a Phase II trial with 24 patients, wasn’t big enough to provide statistical proof that the drug was working, although researchers saw signs that it was helping patients breathe better than a placebo for as long as 90 days. Alnylam’s partner, Lexington, MA-based Cubist Pharmaceuticals, said in a statement that it was “encouraged” by the results.

This is important stuff to scientists, since Alnylam is a leader in the field of RNAi interference, which seeks to specifically silence disease-causing genes in ways that traditional treatments don’t. Since this inhalable form of RNAi appeared safe, and it offered signs of effectiveness in patients with the lung disease, why not charge right ahead into the third and final phase of testing required for FDA approval? Respiratory syncytial virus (RSV) is a serious infection that is the leading reason why children in the U.S. get hospitalized, Alnylam says. It also common among adults, especially elderly people with weakened immune systems.

“We and Cubist and [[our partner]] Kyowa Hakko remain very excited about RSV,” Maraganore says.

Alnylam CEO John Maraganore

Alnylam CEO John Maraganore

Yet there are a lot of factors now to carefully consider before Alnylam and its partners make their next significant move. First, there are two different patient populations to consider—adults and children. As many pediatricians will tell you, children aren’t simply littler adults that can take a proportionally lower dose, so these patient populations need to be treated differently, and the product for each group may need to be differentiated, Maraganore says.

Then—and this is a familiar dilemma to many biotechs—RSV research didn’t just stop when Alnylam settled on its lead candidate and pushed it into clinical trials in 2005. The company’s researchers continued working on a molecule with “improved attributes” for treating this condition, by chemically modifying a new compound so that it would be more stable in the body—potentially enabling longer-lasting effects and less-frequent dosing, Maraganore says. This second-generation RNAi drug for RSV also can avoid activating a component of the immune system, which means it can potentially be given at a higher dose, Maraganore says.

“RSV01 is a great compound, but we may be able to improve on it quite a bit in the second generation,” Maraganore says.

This has essentially left Alnylam with three alternatives. It can advance its existing lead candidate in further clinical trials of adult and pediatric patients. It can move ahead with the existing drug, ALN-RSV01 in adults, while saving the second-generation product for children. Or, it might not go forward in testing with adult patients, and use the second-generation product for testing in children, Maraganore says.

The decision, which involves Alnylam, Cubist and Asian partner Kyowa Hakko Kirin, is expected by the end of the year, Maraganore says. While I was trying to press him for a definite answer, he made sure to keep his options open.

Analysts on the company’s second-quarter conference call didn’t seem too concerned about this bit of uncertainty about the RSV program, particularly since Alnylam has plenty of other things going on, with two major pharmaceutical company partnerships expected by the end of the year, and an interesting new collaboration with Vancouver, BC-based Alcana Technologies to develop more effective RNAi-delivery capsules that can circulate through the body.

Simos Simeonidis, an analyst who follows Alnylam for Rodman & Renshaw, said he’s still awaiting word on the RSV program by the end of the year, but nothing really happened in the last quarter to change his view of the company. That is certainly not in any gray zone—Simeonidis’ price target for Alnylam is a bullish $37 per share. “We view Alnylam as a core long term holding in biotech given its leading position in both IP and development in the RNA therapeutics space, and a technology with the potential to transform drug development,” Simeonidis wrote in a note to clients Aug. 6.

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