wander, thinking about the opportunity. Could RNAi be the new monoclonal antibody? The new recombinant DNA? Represent a whole new way of discovering medicines?
“That was an opportunity I just could not walk away from,” he says. “How could you say no?”
Of course, that’s the optimistic dreamer’s way of looking at a new biotech idea. The reality is, Millennium was stable, and Alnylam could only offer an uncertain, long, and difficult journey. RNAi was just a science project, and Alnylam was a startup with six employees, some $17.5 million in backing, and a big idea that it would take years to prove. No one had a clear idea how to effectively get large RNAi molecules into the right tissue, without causing dangerous side effects to healthy cells and organs along the way. In all likelihood, the endeavor would fail.
“My view, quite candidly, was that the technology was too early,” Starr says. “I remember telling him that if he is thinking about doing something else, let’s find him another company. There’s got to be something that’s a little bit more established.”
There was no turning back for Maraganore, though. Challenges be damned: he couldn’t shake the potential. He was named Alnylam’s CEO in December 2002, and the gig has been every bit the roller coaster it was anticipated to be. Maraganore, in fact, breaks his tenure down into three phases:
“Rational Exuberance”
At first, the RNAi field, Maraganore says, was the “wild, wild west.” People were scrambling for patents, and Alnylam, aiming to become RNAi’s leader, “believed strongly” that it had to grab all the IP, he says. On his first day on the job, Maraganore flew to Munich to cut a licensing deal with the Max Planck Institute for a group of Tuschl patents—a tough negotiation, he recalls, because Alnylam had to agree to establish operations in Europe, if not Germany, as part of the deal. It did, and later fulfilled that obligation by buying a company called RiboPharma. Alnylam then proceeded to snap up patents out of Stanford University, the U.K., and elsewhere. But it passed on a key set of additional Tuschl patents Max Planck had licensed to UMass, a decision that would cost Alnylam dearly down the road.
Pharma, too, started becoming enticed by RNAi’s potential. Alnylam went public in 2004, and its scientists published a key paper in Nature showing the RNAi approach could silence a specific gene in mice. Alnylam then cut deals with a number of pharmaceutical companies—among them, Roche and Novartis—that sustained it for years. Meanwhile, Merck bought Sirna Therapeutics, the company that owned the UMass patents Alnylam had walked away from, for $1.1 billion in 2006. Pharmas began throwing billions of dollars at the science.
“Despair and Anxiety”
After the early promise, RNAi’s warts began showing up in the latter half of the decade. Effectively delivering an RNAi drug into humans was proving to be difficult. Then in 2007, the global economy tanked. Big Pharma, facing revenue pressure, started making big portfolio cuts. Making matters worse, a prospective RNAi drug for macular degeneration developed by Acuity Pharmaceuticals (and owned by Opko Health) failed miserably in 2009, headlining a series of clinical failures.
RNAi was put on the chopping block. Pfizer and Abbott Laboratories backed out. Merck closed Sirna’s RNAi lab. Novartis chose not to exercise an option to expand its partnership with Alnylam (though it still pursued the 31 target programs it had licensed in their deal). Roche, perhaps RNAi’s biggest pharma benefactor, fled as well, sending shockwaves through the field and marking the end of what was a potentially $1 billion-plus partnership between the two companies. Roche’s decision stunned Maraganore, who found out via a phone call the night before.
Maraganore says today that he should’ve seen Pharma’s systematic exit coming, and the Roche news in particular. Roche R&D chief Lee Babiss, who led the Alnylam deal, had left the company in 2010, leaving Alnylam without support within the big Swiss company. “We know that in the Roche boardroom they referred to the RNAi investment as Lee’s folly,” Maraganore says.
These were dark days for Alnylam. The company cut up to 30 percent of its workforce in October 2010, and its shares bottomed out at around $6 apiece (just north of its $6 IPO price) some two years later. Investor meetings were sparsely attended. Many abandoned Alnylam. A legal tussle with Tekmira Pharmaceuticals (NASDAQ: [[ticker:TKMR]]) clouded the company’s future. The prevailing sentiment was that Pharma had lost faith in RNAi, that it couldn’t be used as broadly as once hoped, if at all. A decade in, the field hadn’t yet hadn’t produced an FDA-approved drug.
Maraganore contends, however, that much of the doom and gloom was a media-driven narrative, and that the science was still advancing. Lucky for Alnylam, it had a huge pile of cash—more than $300 million—to fall back on during the tough times. Maraganore had a chance to be proven right.
“We can make drugs out of RNAi.”
Alnylam, and the rest of the RNAi field, began to turn the corner a couple years ago. To solve the problem of delivering the large RNAi molecules to cells, scientists began focusing on the liver, a large organ that can absorb the big molecules from the blood. Alnylam tailored its approach exclusively to the liver, and identified a group of orphan diseases, like Transthyretin (TTR)-Mediated Amyloidosis, that could make for quicker development paths (and can be marketed by smaller sales forces). The strategic shift led, finally, to real data. Alnylam successfully completed a Phase 1 study of patisiran in TTR in 2012. Those results, combined with a successful Phase 1 of a cholesterol-reducing drug it’s developing with The Medicines Co., helped Alnylam’s stock rally from the depths, climbing to around $20 per share late in the year (it’s now worth more than three times that amount).
Alnylam then parlayed that success into additional industry support. It inked a small deal with Genzyme on its TTR program, adding to the partnership with Maraganore’s old friends at The Medicines Co. It started showing signs it might be able to deliver RNAi drugs subcutaneously (rather than through an IV infusion), and added candidates for hemophilia, hepatitis B, and other diseases to its portfolio.
Alnylam’s biggest business breakthrough came in early 2014, when it turned its deal with Genzyme into a major partnership covering several drugs. Genzyme bought a 12 percent stake in Alnylam at a whopping $80 per share. And Alnylam turned around and bought Merck’s Sirna operations—and the IP it could’ve had a decade ago for $5 million—for $175 million.
In the meantime, other companies developing RNA-based drugs, via different methods, made clinical progress. Isis Pharmaceuticals (NASDAQ: [[ticker:ISIS]]), which uses antisense technology, won FDA approval of an RNA drug in January 2013. A small study from Sarepta Therapeutics (NASDAQ: [[ticker:SRPT]]) showed that an RNA-based “exon skipping” drug might help treat Duchenne Muscular Dystrophy. Other RNAi companies, like Dicerna Pharmaceuticals (NASDAQ: [[ticker:DRNA]]) and Arrowhead Research (NASDAQ: [[ticker:ARWR]]), using different technologies and delivery systems, went public. RNAi firms raised more than $1 billion during the first four-plus months of 2014, Nature recently wrote.
Still, the progress has been accompanied by more setbacks. In April, for instance, Novartis threw in the towel on RNAi, citing its “narrow” range of “medically relevant targets.” Shares of RNAi companies took a hit, and skepticism and a whole new discussion of the field’s potential ensued.
“It’s been the classic up and down of a new technology,” Maraganore says. The smooth-talking CEO who’s battled over a decade to validate new science rushed to defend it—and lashed out against its critics. Pharma is “terrible at innovation,” he said at an Xconomy forum on biotechnology held shortly after Novartis’s announcement, raising eyebrows across the industry.
Yet in a few years, a crucial day of reckoning—and another fateful envelope—lies ahead for Maraganore and RNAi. In November, Alnylam began its first Phase 3 study, an 18-month trial of patisiran in patients with TTR. Results are expected in 2017. When the time comes, Maraganore will no doubt have some flashbacks to that tense moment in Kendall Square 20 years ago. But even with the risks, he wouldn’t have it any other way.
“I can’t imagine a more exciting endeavor to be involved with,” Maraganore says. “I pinch myself twice every morning. Once when I get up, put my feet down on the ground, and look across the bed at my lovely wife. And the second time is when I’m going into work.”
