Some diseases have proven difficult to address using conventional tools of drug discovery that target disease-causing proteins. Roche is placing a $190 million bet on Arrakis Therapeutics, a startup whose technology aims for RNA—carriers of the genetic instructions that make these proteins in the first place.
The cash, an upfront payment to Waltham, MA-based Arrakis, kicks off a research partnership set up to feed new drug candidates into the Roche pipeline. The therapeutic areas covered under the alliance weren’t specified, but Arrakis CEO Michael Gilman says they encompass the scope of Roche’s research and development work, which includes cancer, infectious disease, neuroscience, and more.
Much of drug discovery is oriented toward identifying small molecules that bind to proteins. RNA has been a harder target to hit because it does not have the typical sites that bind to small molecules. By developing small molecules that bind to RNA, Arrakis aims to hit disease targets that had previously been considered “undruggable.”
Gilman tells Xconomy that Arrakis (named for the desert planet in the novel Dune) started exploring potential partnerships about a year ago, soon after the company completed a $75 million Series B round of funding. At that point, the company had a better understanding of what its technology could do. A number of companies inquired about the Arrakis technology, but Gilman says “Roche seemed to have the highest and most persistent level of interest.”
Last May, Gilman made plans to attend a conference in Europe and he let Roche know he would be there. The company invited him to meet some of its research and development people for dinner in Basel, Switzerland. That initial meeting led to more technical discussions last fall at the Arrakis headquarters. The final details of the deal were hammered out in the past month via Zoom videoconference meetings made necessary by the spread of COVID-19.
Under the agreement, Arrakis will lead the discovery and early research work for each target. Roche will handle preclinical and clinical development. Arrakis is eligible to receive milestone payments tied to the progress of these compounds, plus royalties from sales of any commercialized products. The companies did not disclose those financial details, other than to say that the payments to Arrakis could top “several billion dollars.”
Gilman says the alliance won’t be like many partnerships in which a small biotech does its discovery research and then hands off that work to the bigger company. Roche can contribute to the Arrakis programs before it formally takes them on, Gilman says. In some cases, Roche will do some of the research. The deal provides Arrakis, a biotech that has not yet reached clinical testing, with some early validation of its technology now, and the potential for even greater validation later.
“We want to see Roche as a multiplier of our platform,” Gilman says.
Arrakis has some competition in the chase for drugs that target RNA. Durham, NC-based Ribometrix, which emerged with $30 million in financing in 2018, is developing potential medicines under a partnership with Vertex Pharmaceuticals (NASDAQ: [[ticker:VRTX]]). Skyhawk Therapeutics of Cambridge, MA, is developing RNA-targeting small molecule drugs under a partnership with Roche subsidiary Genentech. That alliance is focused on cancer and neurological diseases. Others in the hunt include Expansion Therapeutics and Gotham Therapeutics.
The disease targets that Roche and Arrakis will pursue are exclusive to the partnership, but Arrakis remains free to pursue alliances with other companies focusing on other targets. Gilman is in no rush to do so. For the time being, Arrakis wants to ensure that the Roche alliance succeeds, he says. But the company remains free to continue developing its internal pipeline, which is focusing on cancer at first. Arrakis is moving closer to clinical testing, but Gilman declined to offer a timeline for reaching these tests.
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