Avidity Biosciences, a biotech developing drugs that deliver bits of RNA and DNA to cells to treat disease, has signed its first strategic pharmaceutical partner.
Eli Lilly (NYSE: [[ticker:LLY]]) is paying Avidity $20 million upfront—plus $15 million in equity—for the rights to use the La Jolla, CA, startup’s technology to try and develop new medicines.
Avidity is testing combinations of an oligonucleotide—a strand of DNA or RNA designed to match up with a targeted sequence in the body—and an antibody, which helps the drug get into cells where they can affect the creation of proteins.
Other companies are targeting RNA to affect how (and if) certain proteins are created. Ionis Pharmaceuticals (NASDAQ: [[ticker:IONS]]) developed nusinersen (Spinraza), an RNA drug that is now marketed by Biogen (NASDAQ: [[ticker:BIIB]]). The drug uses antisense oligonucleotides (an antisense strand in RNA mirrors its coding, or sense, strand) to increase the amount of a protein that spinal muscular atrophy patients lack. The drug is injected during a spinal tap.
But the therapeutic potential of such drugs has been slowed by the difficulties inherent in getting such therapies where they need to go in a form that remains appropriately potent, says Art Levin (pictured), Avidity’s executive vice president of research and development. Drug developers have had more success so far getting liver cells to take up oligonucleotide therapies.
“The question is, how do you take advantage of all the specificity, the potency, (and) the duration of the action of oligonucleotides outside of the liver?” Levin says.
Avidity’s solution is to link the therapeutic “payload” to an antibody, both to protect it and to convince cells to allow the drug to penetrate. In the lab, this approach has modified RNA in muscle, heart, liver, tumors and immune cells.
Levin has a long history in the oligonucleotide field, previously working to develop such drugs at miRagen Therapeutics, Ionis, and Santaris Pharma. He says Avidity’s technology was invented in-house.
“(Avidity’s) expertise in studying the combination of monoclonal antibodies and oligonucleotide-based therapies represent a promising avenue of research toward development of new RNA-based medicines,” said Andrew Adams, Lilly’s chief scientific officer for RNA therapeutics, in a statement.
The discovery efforts will focus on immunology and other undisclosed indications; the companies didn’t say how many drug targets Lilly would get.
Under the deal terms, Avidity could receive up to $405 million in payments per target for hitting development and commercialization milestones. If the partnership leads to any approved drugs, the company could also earn “mid-single to low-double digits” royalties from sales.
As Avidity ramps up its work with Lilly, the 30-person biotech also plans to continue to advance its lead drug candidate. The company is looking to first target muscles with its antibody-oligonucleotide conjugates. An Avidity drug developed to treat an inherited type of muscular dystrophy called myotonic dystrophy type 1 is being prepared to advance into primate testing. Dyne Therapeutics, which emerged from stealth this month with $50 million, is also targeting the rare disorder.
Avidity is also researching compounds to test as a drug to treat people with Duchenne muscular dystrophy. The company received an equity investment last year—the amount wasn’t disclosed—from CureDuchenne, a nonprofit organization dedicated to finding a cure for the disease, which it says affects some 300,000 boys worldwide. The Sarepta Therapeutics (NASDAQ: [[ticker:SRPT]]) drug eteplirsen (Exondys 51), the only FDA-approved treatment so far, slows the disease’s progression but doesn’t change its course; the company is also working on a gene therapy.
Avidity last reported raising capital in January 2017, when it closed a $16 million Series B financing round—$10 million in equity and $6 million in convertible debt—led by the corporate venture arm of Takeda Pharmaceutical (NYSE: [[ticker:TAK]]). Alethea Capital, Alexandria Real Estate Equities, Brace Pharma, EcoR1 Capital, F-Prime Capital, Moore Venture Partners, and Tavistock Life Sciences also invested in the round.
Troy Wilson, Avidity’s co-founder, serves as executive chairman; he is president and CEO at Kura Oncology, which he also co-founded. (Avidity has no CEO.) Co-founder Kent Hawryluk, who previously founded MB2, which was acquired by Novo Nordisk, and Marcadia Biotech, which was acquired by Roche, is its chief business officer.
