Dicerna’s GalXC RNAi platform technology was involved in yet another big pharma collaborative drug discovery and development deal. Just weeks after the announcement of a $1.67 billion deal with Roche, now Novo Nordisk inked an agreement to discover and develop novel therapies for the treatment of liver-related cardio-metabolic diseases. With a $175 million upfront payment and an equity infusion of $50 million, not to mention $25 million per year for three years based on certain deliverables, Dicerna commits to collaborate on over 30 liver-cell targets with the goal of delivering multiple clinical candidates. With the ability to inhibit hepatocyte targets involved in disease regulation, the prospect of new clinical development candidates involving chronic liver disease (e.g. non-alcoholic steatohepatitis or “NASH”, type 2 diabetes, obesity and others) fits in Novo Nordisk’s growth hypothesis. Can Dicerna leverage its existing resources to achieve its own pipeline as well as meet the conditions required from the Bagsvaerd-based company?
Innovation via Collaboration
In what is becoming a familiar story with big pharma, juggernauts such as Novo Nordisk increasingly look to externalize early stage drug development—from discovery to preclinical research. In this deal, Dicerna will conduct and fund the discovery and preclinical development to clinical candidate selection for each liver-cell target while Nordisk will be responsible for clinical trials through commercialization.
Clinical Program Terms
Once programs are involved, Novo Nordisk will lead the ones targeting cardio-metabolic disorders as well as other indications while Dicerna is afforded the option to opt into two programs during clinical development. And, Dicerna also retains the rights to initiate two new orphan liver disease programs, in which Novo Nordisk can opt in to as well. The companies negotiated a profit split based on net sales of products in proportion to each company’s contribution to the development costs.
Milestone & Royalties
This deal includes an upfront payment of $175 million and a $50 million equity investment (e.g. Novo owns shares in Dicerna). Novo Nordisk will pay Dicerna $25 million per year in the first three years of the collaboration however actual payment is contingent upon Dicerna actually delivering RNAi molecules for a defined number of targets. Additionally this transaction includes up to $357.5 million per target in development, regulatory, and commercialization milestone payments in addition to tiered royalties on product sales ranging from the mid-single-digital to mid-teen percentages of net sales. Of course, much of this cannot be counted as revenue until the deliverables materialize.
Who is Dicerna?
Publicly traded Dicerna (DRNA) https://dicerna.com/ was founded in 2007 and has raised nearly $400 million. With a focus on delivering RNAI breakthrough technologies. They develop innovative therapies designed to turn off destructive disease processes by silencing the genes underlying these processes. Their proprietary GalXC™ platform uses the body’s natural biological pathways to silence genes in the liver in a highly selective and specific manner. Dicerna seeks to address underlying causes of illness, as well as restore health, via the targeting of genes that contribute to serious diseases.
Their pipeline includes collaborations with not only Roche and Novo Nordisk but also Eli Lilly, Boehringer Ingelheim and Alexion. With a handful of targets in its own pipeline, FDA recently granted Breakthrough Therapy status for the company’s investigational treatment DCR-PHXC for primary hyperoxaluria type 1 (PH)—a family of severe rare inherited disorders of the liver that often result in kidney failure). DCR-PHXC represents the only RNAi investigational therapy in development for the treatment of PH.
What is RNAi?
The recent deals totaling nearly $2 billion are the result of demand for the promise of RNAi-based breakthrough technologies. But what is RNAi? “RNA Interference” or “RNAi” is a natural process of “gene silencing” that regulates gene expression. The discovery of RNAi was a revolutionary breakthrough and was awarded the 2006 Nobel Prize for physiology or medicine.
Gene transcription begins in the cell nucleus, where messenger RNA (mRNA) is produced from a double stranded DNA template. The RNA then travels into the cytoplasm, where ribosomes translate mRNAs into proteins. Importantly, proteins mediate all cellular processes in both the normal and disease setting, with certain proteins involved in the cause and pathway of disease. To date, disease causing protein have been the target of conventional therapies, such as small molecules and antibodies. The RNAi mechanism enables the transient and selective silencing of any gene by targeting mRNA for destruction—hence preventing the expression of proteins and their function in disease.
What is the GalXC RNAi platform technology?
The Dicerna therapy innovative GalXC RNAi technology platform capitalizes on rapid industy evolving RNAi knowledge while fueling a pipeline of promising, precisely targeted therapies designed to overcome many of the challenges of earlier RNAi therapeutics. Dicerna invented GalXC, a proprietary technology platform which supports the development of next-generation RNA interference (RNAi) based therapies designed to silence disease-driving genes in the liver.
GalXC harnesses the force of the natural RNAi pathway reports Dicerna, a pathway within cells whose purpose is to silence genes. Here the RNA molecules initiate the specific destruction of mRNAs of disease-driving genes. Their drugs, such as DCR-PHXC, actually silence or “knock down” the expression of a targeted gene in such a way that is highly selective, specific, precise and reversible.
Processed by the Dicer enzyme, the natural initiation point for RNAi within the human cell, Dicerna seeks to advance the ability to silence disease-driving genes in the liver. Dicerna reports that GalXC-originated compounds have broad applicability across multiple therapeutic areas from viral infectious diseases to chronic liver diseases and even cardiovascular diseases.
Why is the Dicerna Approach different?
Dicerna reports that GalXC molecules are stabilized by chemical modifications and utilize a four base sequence known as a tetraloop, where each base is conjugated to a simple sugar, N-acetylgalactosamine (GalNAc), that is specifically recognized by a receptor on the surface of hepatocyte liver cells. Unique to Dicerna’s GalXC compounds, this tetraloop configuration interfaces effectively with RNAi machinery, offering effective and efficient conjugation to the targeting ligands, and stabilizing the RNAI duplex to enable effective delivery of GalXC RNAi-inducing molecules directly to the liver.
Business & Finances
With a $1.54 billion market capitalization (current share price $22.50), their most recent loss was approximately $100 million on $18 million in reported revenue. They employ approximately 200. Dicerna brings together talented experts in a range of fields. Moreover, their team possess extensive knowledge and experience necessary for the discovery, development and commercialization of safe and effective therapies. This human capital will be of paramount importance as they must scale uniquely to meet not only the terms of Novo Nordisk but also Roche and the others, not to mention deliver on their own pipeline—no easy feat.
Based on the operating history of losses, stock price could change and that can impact their ability to execute. Dicerna’s key underlying premise—that product candidates identified with their platform could offer a better therapeutic approach to small molecules and monoclonal antibodies—not to mention advantages over earlier RNAi molecules—faces a number of tests. For example, the science and understanding of this drug discovery and development endeavor is relatively new. The reality is that their development of therapeutic treatments addressing liver disease, for example, is based on both preliminary and limited science. For example, relatively few drug therapy candidates based on RNAi have been tested in humans or animals—and a number of RNAi-based clinical trials have disappointed investors. To date, the premise underlying the GalXC value proposition is based on limited data, while there is no conclusive evidence that this platform can produce safe and efficacious products.