A nose for opportunity

Nastech becomes mdRNA and moves RNAi tech ahead of nasal delivery

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BOTHELL, Wash.—Nastech Pharmaceutical Co. changed its name to mdRNA in mid-June—along with shifting its focus from nasal drugs to RNAi—in a move that essentially cuts off its nose to reinvent its face.

As Nastech, the company had what it thought was a winning corporate strategy of developing nasal delivery technologies for existing, successful medications. In fact, it had three significant, ongoing clinical tracks for an ultra-rapid-acting insulin for diabetes, peptide YY3-36 for obesity and parathyroid hormone (PTH1-34) for osteoporosis. All that changed when a deal with big pharma went south last year.

"Years ago, the company began a collaboration with Procter & Gamble for the intranasal delivery technology for osteoporosis, and they gave that program back to Nastech in November 2007," explains J. Michael French, who began as CEO of mdRNA on June 23 and previously worked as vice president for corporate development at Sirna Therapeutics Inc. "There wasn't anything wrong with Nastech's approach or research, it wasn't because of safety or tox concerns; P&G simply drew a bar related to what they were willing to continue in terms of outside funding, and Nastech fell on the wrong side of that bar."

As French describes it, "the market crushed Nastech over that. It's hard to go back and try to convince people that it's the partner, not the drug. Frankly, the market just doesn't care a lot of the time."

What followed was a contraction of the staff from 250 people to a total of 80 today, and discussions about what direction to go. Since 2003, Nastech has in-licensed RNAi technologies from companies such as Alnylam. Based on this activity company officials decided to bring RNAi to the forefront and completely re-brand the company. The company's leaders believe they have been building one of the broadest and deepest patent estates in the RNAi field, with more than 260 filed patents addressing 144 gene sequences including numerous disease-validated targets.

"Nastech found itself with a dwindling market cap and three clinical programs that, as you can imagine, would require a lot of money to keep moving forward," French notes. "So with limited capital to work with, the company decided to go with getting the most bang for its buck by taking advantage of growing interest in RNAi platforms and leverage its intellectual property in the RNAi space—work that had been going on slowly and quietly in the shadow of the three clinical programs for nasal delivery."

Reborn as mdRNA, the company now focuses in part on Dicer substrates—through an intellectual property license deal with City of Hope. Dicer substrate are oligonucleotides which are slightly longer than standard "RISC" substrates and are processed by the Dicer enzyme into the siRNA strands. These strands then activate the RNAi pathway.
Plans call for mdRNA to tap the unique characteristics of Dicer substrates to develop novel delivery approaches for safe and effective systemic delivery of RNAi-based therapeutics.

The other major focus involves RNAi drug candidates based on the use of Meroduplex, or mdRNA, a next-generation oligonucleotide technology being pioneered and developed by the company as a platform approach for the development of potentially safer and more efficacious RNAi-based therapeutics.

Currently, mdRNA is pursuing preclinical RNAi programs in influenza and rheumatoid arthritis, from which it will identify appropriate target candidates for partnering and clinical development.

As for the nasal delivery technology, mdRNA is seeking to monetize that legacy drug delivery business through licensing, partnering or acquisition of its Phase II intranasal programs—with an eye toward using the revenue to further bolster its RNAi mission.
French replaced Dr. Stephen C. Quay as CEO when Nastech re-branded itself, but Quay remains on board as chief scientific officer, chairman of the company's scientific advisory board and chairman of the board of directors.

"I am looking forward to focusing my attention on the further development of our core delivery technologies and the rapid advancement of our preclinical pipeline of novel mdRNAi and siRNA drug candidates toward human clinical development," Quay says.

"This is an exciting time for me and our world-class scientific team as we continue to capitalize on the breakthroughs we have made in developing safe and effective RNAi-based therapeutics." DDN

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