When Ronald Renaud sold the company he was leading, Idenix Pharmaceuticals, to Merck for $3.85 billion six months ago, it was one of biotech’s more unexpected recent turnarounds.
In 2012, the FDA had halted two of Idenix’s two most advanced drug prospects in the ultra-competitive hepatitis C space, and rivals were moving ahead full steam. Idenix looked like road kill.
Renaud had to pivot, and Idenix quickly re-focused on earlier drugs in its pipeline. By this summer, those drugs—which Idenix felt could eventually top the current treatments on the market by helping treat all subsets of hep C patients—were promising enough to entice Merck to buy the company for $24.50 a share, a whopping 230 percent premium to its trading price at the time. It was a huge win for Idenix, and arguably the biggest surprise among the company’s 16 years of various ups and downs.
“We knew there was going to be a lot of noise from the investment community. You had many big players that were moving ahead very quickly,” Renaud (pictured above) says. “But you just have to keep your head down, trust the good people that you have working with you, and keep going.”
The deal closed in August, and now, just a short time later, Renaud is leading a new company and in some ways tackling an even bigger challenge. He’s the head of a three-year-old Cambridge, MA-based startup called RaNA Therapeutics, a company pursuing a completely new and unproven way of developing RNA-based drugs.
It was co-founded by Art Krieg, a well-known figure in RNA therapeutics who had helped launch oligonucleotide drug developer Coley Pharmaceutical Group in 1997. RaNA’s biotechnology is based on work done by Jeannie Lee, a Howard Hughes Medical Institute Investigator at Massachusetts General Hospital.
The company, however, has been silent since that Series A nearly three years ago. Krieg was RaNA’s founding CEO; he left that post roughly a year ago to become the chief scientific officer of Sarepta Therapeutics (a role he was fired from in July).
Since Krieg’s departure, chief scientific officer Jim Barsoum, a former Synta Pharmaceuticals executive, and executive chairman Daniel Lynch, one-time ImClone Systems CEO, have been running the company. Renaud declined to say much about the CEO transition, except to note that Krieg is still on RaNA’s scientific advisory board, and that the two have spoken a number of times.
When I spoke with Krieg about a year ago, he said RaNA’s goal in 2014 was to do a type of “transformational collaboration” around a franchise. That hasn’t happened yet; rather, RaNA is, as Renaud explains it, head-down trying to get its first drug candidate ready for its first clinical trial.
RaNA is attempting to mine so-called “junk DNA” for drug targets. It was long believed that most of the human genome consisted of DNA that wasn’t useful—it was just a bunch of sequences that didn’t code for proteins and thus served no biological function.
Recent research has shown otherwise. That junk is actually transcribed into what are known as “long non-coding RNAs” (lncRNAs). It turns out lncRNA are a part of the so-called “epigenetic” machinery that turns gene expression on and off. Sometimes that leads to disease when the “off-switch” prevents cells from producing crucial proteins. (That complicated interaction is yet another reason why the central dogma of biology—DNA turns into RNA which turns into proteins—is outdated.)
RaNA aims to use therapeutics to turn those silenced genes back on. The idea is to target a single lncRNA responsible for shutting down a single gene, and reverse the process.
That’s a different approach to many of the other RNA-based drug techniques out there. RNA interference (RNAi) drug developers like Alnylam Pharmaceuticals (NASDAQ: ALNY) attempt to “silence” disease-causing genes before they can make the proteins that trigger disease.
Antisense technology from companies like Isis Pharmaceuticals (NASDAQ: ISIS) uses a different method to similarly shut off a gene. Moderna Therapeutics makes specially modified versions of messenger RNA that tell the body which proteins to make. Sarepta (NASDAQ: SRPT) and Prosensa Holding (NASDAQ: RNA) are developing drugs that “skip” over a faulty section of a gene and help produce important proteins that a patient would otherwise lack.
Most of these approaches, while tantalizing to the scientific community, haven’t led to approved drugs as of yet. Only Isis has a marketed drug, and others still have a long way to go. Delivering RNAi therapeutics, for instance, has been a major challenge that remains mostly unsolved.
It’s hard enough to develop a drug; it’s even harder to develop one that uses a completely new mechanism. That’s the type of challenge Renaud is facing at RaNA.
“I think here, it’s not really so much a challenge as it is a big opportunity,” Renaud says. “We’re getting very intelligent about how to work with these RNA targets, and this [company] in particular for me presented a very interesting and intriguing opportunity in that its approach was very different from what others were working on in the space. If we can actually get those genes switched on, we may have a very beneficial impact across a number of therapeutic areas.”
Here is the situation Renaud is stepping into. The company has all the marks of an established biotech: well-known investors, full-time management, a growing patent portfolio, and financial breathing room. (Renaud wouldn’t say exactly how much, just that the company has runway “into next year.”) Now it has to prove its idea works beyond cells grown in petri dishes.
Renaud says the focus in 2015 is to take early drug candidates into preclinical studies, but he wouldn’t commit to a timeline to get into clinical trials, saying only “we’re still a bit away.” Those compounds are single-stranded therapeutic oligonucleotides—compounds that can bind to cell molecules such as RNA that are involved in gene expression—that would be delivered via subcutaneous injections.
RaNA has done the most work so far in spinal muscular atrophy (SMA), a rare genetic disease that causes severe muscle atrophy and weakness in newborns and children; and Friedreich’s Ataxia, an often fatal genetic neuromuscular disorder. Other companies like Isis (via a partnership with Biogen Idec) are well ahead of RaNA, but the company believes that SMA and Friedreich’s are good showcases for its approach, because they occur when normal genes are silenced. Switching them on should have a benefit if RaNA’s treatments work as they expect.
Still, it’s unclear just what RaNA will look like a few years down the road, and which therapeutic areas it’ll evolve to focus on. RaNA is set up as a limited liability company, making it easier to sell off individual drug candidates or groups of them to partners who don’t want to buy the entire company. Shaping RaNA’s business strategy is just one of the decisions Renaud is facing.
“I think at this point, as we develop the data, we’ll see what makes the most sense for the company,” he says. “But right now, my vision would be that we hold onto these [programs] for as long as we possibly can, given that it’s our technology, it’s our platform, and we think we can take these for a pretty good distance with the resources we have.”