December 22, 2008 EP Vantage Interview - Silence hoping to have something to shout about in 2009 Lisa Urquhart With its first product expected to go into the clinic potentially as early as January, Silence Therapeutics is hoping that 2009 will be year it has something to shout about and one that will reverse the alarming share price decline that has seen the company’s valuation slip from a high of over £170m in June 2007 to £21.6m today. Silence is one of a growing number of companies working in RNA interference (RNAi) and particularly short interfering RNA (siRNA), which work by selectively silencing or inactivating genes related to certain diseases. It is importantly one of only two companies that have composition of matter patent protection for their siRNA drugs. Speaking to EP Vantage, Iain Ross, chief executive of Silence, says: “It’s a big year coming up for us.” The group has spent most of the last 12 months strengthening its IP position, and next year comes the important move of the group’s lead candidate Atu027 into the clinic, an event Mr Ross says should take place in the first quarter of the year. Many expect it could be as soon as the end of January. Partnering focus What is less expected is the speed at which Mr Ross intends to partner the drug, which is being developed in solid tumours, with an emphasis on lung cancer. “We would be looking at doing something either at the end of 2009 or the beginning of 2010,” he says. Key to partnering discussions will be the drug demonstrating good safety data in a number of cancer patients, which could be the catalyst to starting talks with big pharma who have already started to ask about Atu027. Pre-proof of concept deals in the antisense field are not uncommon. In 2006 Merck & Co paid $1.1bn to acquire Sirna. The agreement was struck despite the company only having ten products in development, consisting of one phase I drug, six pre-clinical and three research treatments. Cash key But notwithstanding the other early stage deals in the space, Silence’s haste to partner, which would be a valuable validation of their technology, is more likely to be grounded in the fact that the company currently has $17m in cash. Although Mr Ross is confident that this is enough to last them until the end of 2009, if there are any hitches or delays to the development and licensing plans there is little hope of raising money elsewhere, highlighting the huge risks in the company, despite its attractive technology. Shares in Silence have lost 73% of their value over the last year dropping from 64¾p this time last December to the 17¼p they stand at now, meaning that a fundraising using paper is all but out of the question. “I am desperately disappointed with the share price,” admits Mr Ross who has bought large chunks of the stock in the market. While there is definitely interest in the RNAi field, it has so far not produced any marketable drugs, while this might be an indication of relative youth of the field, its experimental nature means that until recently RNAi technology has been mainly used for drug target screening. RNAi Therapies by phase Pharmacological Current Company Product Class Phase VEGF RNAi OPKO Health Bevasiranib Phase III therapeutic RSV RNAi Kyowa Hakko Kirin ALN-RSV01 Phase II therapeutic VEGF RNAi Merck & Co Sirna-027 Phase II therapeutic Ocular RNAi Allergan AGN-745 Phase II therapeutic Pfizer/Silence Therapeutics/Alnylam RTP801 RNAi PF-4523655 (RTP801i) Phase II Pharmaceuticals therapeutic RSV RNAi Alnylam Pharmaceuticals/PARI Pharma ALN-RSV01 Phase II therapeutic p53 RNAi Silence Therapeutics AKli-5 Phase I therapeutic Calando Cancer RNAi Cancer RNAi Alnylam Pharmaceuticals Phase I Therapeutic therapeutic The main stumbling block to the successful commercialisation of a treatment has been creating stable compounds and more importantly an effective delivery mechanism, the technique of simply injecting the products into treatment areas, known as naked delivery has limited the drug to relatively closed systems such as the eye, where they can be injected, or the lungs where they can be inhaled. Also as most of the drug eventually ends up in the liver, this too has been a focus of research. Given the lack of drugs on the market and the fact that the regulatory risk is often higher with new thereapies, analysts have assigned no value to the eight current drugs in production. As such, investors are also likely to stay away from the area until a phase III candidate not only produces positive data, but also makes it onto the shelves. The closest treatment is Bevasiranib, Opko Health's phase III candidate for age-related macular degeneration. While others are currently experimenting with nano lipids to improve delivery systems to create better drugs, Silence has developed its own proprietary system called AtuPLEX, which uses lipoplex. It is this delivery system and the stability of its molecules that Mr Ross is hoping will be the deciding factor for companies looking to increase their presence in the area. Partnering Focusing on sorting out delivery has paid off and the group does have a couple of alliances with big pharma companies, including an arrangement struck in 2006 with AstraZeneca to make siRNAs for five in house targets the group has identified. Recently AstraZeneca selected one of the targets to move into pre-clinical trials. The group also received a milestone payment of $1.9m in July after Pfizer moved its age related macular degeneration collaboration, PF-4523655 (RTP801i), also with Quark Pharmaceuticals, into phase II trials. In 2006, Silence struck a £50m deal with Pfizer for the drug along with undisclosed royalties. Mr Ross, who is aiming to out-license as much as the group’s technology and products as he can without tying Silence to one partner, will be hoping that similar deals and particularly one for Atu027, will be one of the things that raise the noise levels at Silence. 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