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Wednesday, June 11, 2008

MDRNA: RNAi Noses Out Nasal Delivery

When trying to avoid throwing the proverbial baby out with the bathwater, it helps to know which is which. And sometimes that takes a while to figure out.

Consider Nastech--as of today renamed MDRNA and re-focused on RNA interference. Back in November, Nastech announced it was in fact offloading its RNAi assets--which are built around IP licensed from LA's City of Hope Hospital. This so-called Dicer substrate IP--potentially a new doorway into the RNAi space that may avoid the significant patent estates amassed by the field's pioneers Alnylam and Sirna (now owned by Merck & Co.)--is also the basis of another newcomer to the RNAi field, Dicerna Pharmaceuticals.

The day Nastech announced it was spinning off that IP (which was developed by Dicerna co-founders John Rossi, PhD, from the City of Hope National Medical Center’s Beckman Research Institute and Mark Behlke, MD, PhD, from Integrated DNA Technologies) was coincidentally the day that Dicerna announced its $13 million Series A. Back then we reported:

Nastech chairman/pres/CEO Steven Quay, MD, PhD, said on today's conference call that the current plan was to seek a private investment in MDRNA from institutional investors or VCs, followed by a Nasdaq listing for the firm. Beyond the company's core IP and ongoing RNAi programs at Nastech that will be transferred to the newco, relatively little is known about MDRNA. Quay offered no details on who will manage the company, who will advise it and who will comprise the board--though "the boards are being built as we speak," he said.
A follow-up interview a few days later with the Nastech chief executive yielded zero additional insight save for this blogger's inkling that no details were forthcoming because no decisions had been made. The impulse to offload its Dicer-substrate IP and programs into a separate company was promped by a restructuring in the wake of a dissolved partnership with Proctor & Gamble on Nastech's nasal-delivery osteoporosis project. What was needed at the time was an immediate cost reduction program; RNAi wasn't core. It had to go.

Seven months later and the dust has settled; analysts have dropped Nastech coverage; the firm's market cap is an anemic $37 million. Nasal drug delivery, once-considered low-risk, instead crashed out; RNAi--the subject of some of the most impressively lucrative alliances and acquisitions of the past few years (see most recently Alnylam/Takeda)--has been the star performer.

And at Nastech MDRNA, now it's those nasal delivery programs that find themselves on the block. J. Michael French, formerly SVP corporate development at Sirna, is stepping in as MDRNA's CEO (Quay remains CSO and chairman as well as chairman of the firm's SAB). The firm is focused on its Dicer substrate and next-generation "meroduplex" technology (the latter appears to comprise at least three oligonucleotide strands--patent application here--but we don't pretend to understand it yet.)

The company even has a fancy new ticker, ditching NSTK for MRNA (those microRNA guys are gonna be pissed).

MDRNA isn't the first company to revamp itself as an RNAi player during extremely tough times. On the brink of bankruptcy in February 2003, a small, $3 million-market-cap biotech focused on ribosome science was rescued by a handful of VCs with a $48 million recapitalization. Not even four years later that company--rechristened Sirna--was bought for $1.1 billion.

image from flickr user davidbole used under a creative commons license

3 comments:

Anonymous said...

BOTTOM LINE IS INVESTORS HAVE BEEN DECIMATED. MANAGEMENT IS STILL MAKING MONEY AFTER ACCOMPLISHING NOTHING FOR THE COMPANY OR THE SHAREHOLDERS THE PAST 24 YEARS. BUT THERE IS MORE THAN MEETS THE EYE ON WHAT UNFOLDED THESE PAST 18 MONTHS HERE. SOMEONE DID KNOW SOMETHING ABOUT P&G BREAKING OFF THE PARTNERSHIP OTHERWISE HOW DO YOU EXPLAIN THE MOST SALES BY INSIDERS FROM JAN.2007 TO NOV.2007?
$18 TO $1.13 TODAY!
NEW NAME,NEW SYMBOL,NEW CEO BUT THE SAME OLD ZEBRA WHICH DOESN'T CHANGE ITS STRIPES.
SOMEONE WHO HAS THE GUTS OUGHT TO INVESTIGATE THIS COMPANY. IS THE 'SEC' REALLY AN ADVOCATE FOR SHAREHOLDERS?
AND WHEN WAS THE LAST TIME THE 'SEC' DID ANYTHING FOR SHAREHOLDERS?

Anonymous said...

Aug.4th-MRNA EARNINGS CONFERENCE CALL-
In less than 8 hours shareholders will hear articulate,
jubilant, pearls of wisdom that the speech writers for the presidential election should sit back and learn how to make everything just Grand!
The company has more good news announcements than there are cities in the United States.
The banking industry should take note on how to survive and continue getting funded and at the same time have excited shareholders in place. You don't even need a product. Management has proven for 24 years straight, how to exist, collect income and receive bonuses, by just knowing how to
Talk to everyone!

Anonymous said...

UPDATE:AUGUST 27TH, 2009 "MRNA"
NO SERIOUS REVENUE TO SPEAK ABOUT,
ONLY MINOR IN VIVO RESULTS AND PRIMATE STUDIES GOING ON. THE ONLY ASSESTS IS THEIR LICENSING RIGHT NOW, STILL A PRE-CLINICAL STAGE COMPANY. LONG TERM SHAREHOLDERS GOT KILLED BUT THIS YEARS THE FEW WHO BOUGHT IN AT $.28 -$.50 CLEANED UP. HOWEVER, I BELIEVE THERE ARE MORE EYE APPEALING COMPANIES OUT THERE THAT WARRANT A BUYOUT BY BIG DRUG COMPANIES, BUT NOT 'MRNA'.