A Focus On The Science And The Business

By James Netterwald; Ph. D.

RXi Pharmaceuticals is not your typical biopharma company. Headquartered in Worcester, MA, RXi is a young company in a young field — RNA interference (RNAi)-based therapeutics. Not quite three years old yet, the company has already been around for half of the field’s lifetime.

RXi Pharmaceuticals was founded by one of the codiscoverers of the RNAi mechanism and recent Nobel laureate Craig Mello, Ph.D., professor of molecular medicine at University of Massachusetts (see sidebar on page 14). Dr. Mello is still a member of the company’s scientific advisory board. RXi officially began operations in 2007 after it was spun off by its parent company CytRx Pharmaceuticals, which still maintains an approximately 39% interest in RXi.

Another cofounder and expert in the field of RNAi-based therapeutics — Tod Woolf, Ph.D. — was the founding president and CEO of RXi Pharmaceuticals, but was replaced by Noah Beerman, M.B.A., in November 2009. Under Woolf’s leadership, the company’s strategy was to advance its delivery technology platform in the RNAi space, but major changes lie ahead with the change in leadership.

Beerman has more than 25 years of experience in the biopharmaceutical industry, including extensive expertise in building and advancing biopharmaceutical product pipelines as well as leadership experience in business management and operations. Prior to joining RXi, Beerman served as executive VP, chief business officer at Indevus Pharmaceuticals, Inc. until the company’s acquisition by Endo Pharmaceuticals in 2009. While at Indevus, he was responsible for the development and implementation of the company’s corporate development strategy to ensure near-term and long-term growth and success. He was also responsible for overseeing Indevus’ acquisition of Valera Pharmaceuticals in 2007 and for managing the integration activities with Endo as part of this transaction. I recently had an opportunity to interview him to inquire about the recent change in leadership at RXi and his future plans for the company.

Describe Your Plans To Take RNAi From The Research Stage To Product Development And Eventual Commercialization.
In no particular order, the following are the three main pieces to our efforts to translate from a research company into one focused on product development and eventual commercialization. The first is focus. Our RNAi technology really has unlimited potential because it is such a broad-based technology, and that is both a challenge and an opportunity. RXi has a fairly extensive list of therapeutic areas that we can pursue, but the challenge is to focus on the areas in which we are successful. So, one of our missions for the next 12 months is to focus our efforts in a few therapeutic areas.

The second piece is taking drug candidates into development. We need to select our best drug candidates and move them forward into preclinical and clinical development. We have personnel with expertise in clinical development who will lead us in accomplishing this feat. One of those leaders is Pam Pavco, our VP of pharmaceutical development, who, prior to joing RXi, worked for a company called Sirna Therapeutics, where she was credited for moving its first RNAi drug candidate into the clinic in less than one year. She also directed R&D of one other RNAi drug candidate that continued into clinical development. We have other people on our team who have experience at various levels of clinical development, but Pam is probably the most appropriate example for our efforts.

Finally, the third piece is to secure “validating” partnerships with medium to large pharma companies that are hungry for technology and the opportunity to participate in a meaningful way in RNAi technology. These kinds of deals are common to the RNAi field. For example, Dicerna Pharmaceuticals licensed its RNAi delivery technology to a large Japanese biopharmaceutical company, Kyowa Hakko Kirin. Also, Alnylum Pharmaceuticals has a number of these collaborations, as do some of the other RNAi companies. More important to us, however, is that through such partnerships, large pharmaceutical companies want to access RXi’s ability to develop novel RNAi-based compounds that can be advanced into clinical development and eventual commercialization. We are actively working on developing such collaborations.

Furthermore, having the right company culture plays an important role in all of these efforts. Having worked at a number of different types of companies, I know there is a distinct difference between a company that is at a research stage and one that is moving into product development. The main difference is a shift in focus. Research-focused companies spend most of their time and resources on developing technology platforms, whereas product-focused companies spend more time and resources on developing clinical candidates. To date, RXi has been more focused on being a research-stage company. To make this shift, we must create a development mentality where we try to identify the best disease areas and product candidates, while ultimately managing clinical trials. So it becomes a shift in focus from research to development. For RXi, the timing for the shift is now.

How Does This Strategy Compare To Those You Have Incorporated In The Past?
I think under Tod Woolf’s leadership the company did what it needed to do — advance the technology platform in the RNAi space. I would say that strategy was executed very well. But my experience is in moving candidates into development and commercialization. Pharmaceutical development is a tricky area, but I think we are prepared to take products to the next stage. Our board of directors and Tod recognized this fact, as well. I am really just leveraging the company’s past achievements, focusing the company, and then evolving the culture a little bit as we move ahead, while not leaving behind what’s happened to date.

Can You Describe Situations Where You Will Collaborate Or Partner And The Advantages Offered At Those Steps?
In my business experience, it’s been all about collaboration. Sometimes, you are the technology donor, and sometimes you are the technology recipient. And sometimes it’s a two-way street. In our case, it is going to be all of the above. For instance, we have some very important academic collaborations with University of Massachusetts Medical School and others that are helping us make our technology platform even more robust. One such collaboration is with Dr. Bob Brown at UMass, where he tests products for ALS/Lou Gehrig’s disease for us.

Academic collaborations are very important, as are collaborations with peer companies. Academic collaborators often have access to unique animal models. In some cases, they have access to patients who have very serious medical conditions, such as Lou Gehrig’s disease. They also have tremendous expertise and are thought leaders in these areas. And as a company, we cannot be all things to all people, so we reach outside to academic collaborators who have specific expertise we need.

From the peer company perspective, there are a number of small companies that have different pieces of the technology. I think it is fairly well recognized in the industry that nobody has all of the pieces put together, which is why collaborations are important. For example, one company might be better at delivering a molecule while another might be better at developing the payload (the actual molecule itself).

The more important collaborations are often with the middle and large pharma and biotech companies that help advance our products through to development and ultimately to commercialization. Those companies have those capabilities in place and have the ability to take products through development. What we look for are companies that have the resources and the wherewithal to focus in on the best candidates and therapeutic areas. Also, because RNAi is a very new technology, we want collaborators to be open-minded in terms of how they see this whole technology and how it fits into the future of pharmaceuticals. The key competencies we need are expertise in marketing and therapeutic strategy. There might be a time when we have to compete with these other companies, especially when our products get into late-stage development, but for now we are able to collaborate with them.

What Are The Unique Regulatory Challenges That You Face While Trying To Bring This New Science To Market?
The good news is that we are not the first company to attempt to bring an RNAi-based therapeutic into clinical development. There is a small handful of companies that have products in phase 2 clinical development right now. So, we know what the regulatory path needs to look like. I think the biggest challenge we face is the fact that we are developing an entirely new therapeutic modality. So, from a regulatory path standpoint, we need to check all the boxes that any traditional pharmaceutical-based product would check during its first time through the regulatory process.

For the last few years, we have had RNAi products enter clinical development, but there have not been too many significant safety issues that bring into question whether the RNAi approach, in general, is safe. We know there will be regulatory challenges, but we believe they are not insurmountable. We have not uncovered any challenges so far. Moreover, because of the high specificity of RNAi molecules for their targets, in theory, this should help us decrease any off-target side effects of the drug. To meet any FDA challenges, RXi will rely on external consultants and the experience of its employees in bringing RNAi molecules into clinical development.

How Will You Position Your Company For The Potential Success And Widespread Application Of This Therapy?
Because of our position as a technology developer, our main mission is to get these technologies into the hands of larger collaborators who can then move into therapeutic areas that we could not have otherwise pursued. That means we have to build support for those efforts, and we can do that both with technological support and manpower. Currently, we have 30 people at the company, and about 2/3 are mainly involved in research. As we get this technology into the hands of collaborators, those research individuals will be responsible for managing those collaborations. We have already instituted this internally.

We also need to grow in terms of head count, so, for example, instead of one person performing a specific function, we will have three. We will need to increase personnel in the areas of development, regulatory affairs, clinical development, chemistry, manufacturing, and other areas. Other peer companies have greater numbers of personnel.

I’ve been through this before. When I was at Indevus, we went from 20 employees to 250 within a span of five years. I increased the size of R&D, managed the purchase of another company for manufacturing, and managed the development of a sales and marketing organization that ultimately employed about 100 people. We now have to do this at RXi. (Editor’s Note: He could not give specific numbers or percentages.)

What’s The Potential Impact Of This Technology On The Business Model Of The Life Sciences Industry Over The Next 10 Years?
RNAi products will reach the market sooner than you think. Many of us in the field believe this could be the wave that revolutionizes the way we treat many diseases, having a tremendous impact on industry. It could reduce the time to compound discovery and the time to clinical development because the molecules themselves could be more quickly developed into a drug than other types of compounds. Typically, there is an iterative process when you develop a new drug. You develop it, modify it, do chemistry on it, put it through a feedback cycle, and ultimately find a candidate that is ready for clinical development. With RNAi, this process could be significantly shortened to the point where the molecule you are testing becomes a candidate or could be put into a delivery vehicle that becomes a candidate. So, it has the ability to decrease the time for discovery of new molecules.

RNAi is a technology that can achieve things other technologies and approaches cannot. And compared to antibody-based therapeutics, which can get to only about 20% of their targets, RNAi can get to, theoretically, 100% of its targets. So we have a very novel therapy with very broad applications.

What Advice Would You Offer Other Similar Bio Companies Trying To Turn New Science Into Business Success?
People view biotech as being all about the technology. My opinion is that, although the technology is certainly critical for any success, it is also about the people and the leadership in the decision-making process in terms of where you take that science.

I’m a big fan of focus, and I think it’s difficult to make decisions when you see so much potential in the technology. In principle, we can use our RNAi technology for any disease area. But, as a company we cannot possibly go after every disease area. We have to pick three or four and target those that are the most likely to succeed and the most likely for us to be able to invest.

One final note: In my opinion, if you are successful at the business end of things, you have a better chance of advancing the science. So it becomes kind of a self-fulfilling prophecy.

RNAi's Potential Explained By Craig Mello, Ph. D.

It is no secret that academic thought leaders have become leaders in the business of life sciences. One of the most illustrious of these academic/business hybrids is Craig Mello, Ph.D., who has served as the chairman of RXi Pharmaceutical’s scientific advisory board since February 2007. Mello, corecipient of the 2006 Nobel Prize in Medicine, codiscovered RNAi and coinvented RNAi therapeutics.
What Are The Advantages Of RNAi Over Other Therapeutic Methods?
We now know all the genes in the human genome. However, only a handful of these genes can be targeted by conventional therapeutics. RNAi holds the potential to make any gene into a drug target. Because RNAi drugs can be rationally designed to target a specific gene, the time required to develop a clinical candidate is dramatically shorter. Finally, this specificity can potentially reduce side effects.

What Are The Current Applications Of RNAi And What Diseases Will This Method Eventually Target?
The only limitation on the application of RNAi is achieving efficient delivery to therapeutic target tissues. Once in cells, RNAi enters a natural and highly efficient mechanism and almost always achieves significant target gene silencing. So delivery is the key. The good news is that delivery technology is advancing rapidly. RXi, as well as other companies, have developed delivery strategies ranging from direct injection to inhalation and even some potential oral delivery options. Delivery is an exciting and rapidly growing field in RNAi therapeutics.

What Are The Scientific And Business Challenges?
I don’t think there are any unusual challenges. I don’t anticipate any big surprises in terms of safety. There really aren’t a whole lot of other issues. The main hurdles are getting efficacy and getting delivery. Those are achievable, and I am very optimistic that we will see RNAi become successful as a therapeutic approach.