Welcome to a new issue of The Biopharma Report!
Merck and Orna Therapeutics Collaborate to Advance Orna’s Next Generation of RNA Technology
This is a very good catch for Merck because Orna’s RNA tech is potentially revolutionary - and I don’t use this word lightly.
In a nutshell, Orna’s tech is based on circular RNA (oRNA). When compared to mRNA, oRNA is easier to manufacture, more stable, more flexible in terms of formulation, has increased protein expression, and a more optimal immunogenicity profile. oRNA is not only competing with mRNA, but also with CAR-T cell therapies. In theory, oRNA-based therapies should be cheaper and require less logistics than CAR-T.
But Orna Therapeutics is not operating in a Blue Ocean environment - other biotechs are working on similar platforms: Laronde, Circode, Chimerna, and Therorna. Both Therorna and Circode are operating out of China and are enigmas - there isn’t a lot publicly available information on their technologies.
Merck has been relatively unlucky - or shortsighted? - when it comes to RNA-based therapies.
First, it purchased RNA interference-focused biotech Sirna Therapeutics for $1.1 billion in 2006 only to sell it in 2014 to Alnylam for $175 million + $105 million in milestones. Merck clearly did not know what it was getting into when they purchased the biotech and had no clear idea on how to leverage its assets and platform - they just knew that other large pharmas like Sanofi and Roche were getting into the RNAi game and that they couldn’t afford to be left out.
Then, it inked a deal with Moderna back in 2018 to gain rights to its mRNA-based KRAS cancer vaccine. But Merck ditched the partnership earlier this year, mostly because the KRAS space changed significantly with companies like Amgen and Mirati becoming pioneers and effectively decreasing the strategic value of the Moderna asset. It is worth noting though that Merck still has an ongoing mRNA-based cancer vaccine collaboration with Moderna.
The pandemic has made the value proposition of RNA-based technologies and therapies clear as day - and a lot of big players - like Merck - are dying to get on the RNA train.
Sanofi’s failure to develop a COVID-19 vaccine - especially given its vaccine-rich history - clearly highlighted the company’s R&D gaps when it comes to mRNA. Sanofi had signed an agreement with Translate Bio back in 2018 to develop mRNA vaccines, but the pandemic made Sanofi realize that it needed to adopt a more pro-active approach on the mRNA front. So in 2021, Sanofi acquired Translate Bio to beef up its mRNA capabilities.
GSK has been in a partnership with CureVac since 2020 to develop mRNA-based vaccines. CureVac had 2 COVID-19 vaccine programs, the first one flopped in early in 2021 and was terminated, but a lot of hope rests on the shoulders of the second program which is being developed in collaboration with GSK. This partnership is part of GSK’s strategy to enter the COVID-19 vaccine market - better late then never. The collaboration also encompasses an mRNA-based flu vaccine. The duo has already snagged a contract with the German federal government to supply COVID-19 vaccines.
With the RNA battlefield becoming more complex and heated, one must wonder how fruitful the Merck-Orna deal will be? Only time will tell. But one thing is clear: it was the right move to make for Merck to position itself strategically in the RNA space.
GentiBio Announces Collaboration with Bristol Myers Squibb to Pioneer Engineered Treg Therapies for Inflammatory Bowel Diseases
This deal is part of BMS' broader strategy to fortify its leadership position in the CAR-T space. But unlike Breyanzi or Abecma, the partnership is focused on inflammatory bowel diseases (IBD).
GentiBio’s platform is based on Regulatory T-cells (Tregs). The idea is to use genetically engineered Tregs to reach a state of immune tolerance - in other words preventing the body’s immune system from attacking itself - which is kind of useful in IBD.
BMS is the latest pharma to join the Treg race. Merck already started playing the Treg game in 2020 when it first partnered up with and then acquired Pandion Pharmaceuticals for its very promising ulcerative colitis asset PT-101. Takeda partnered-up with Egle Therapeutics back in 2020 to validate oncology targets of its Treg platform. In 2022, J&J struck a deal with TRexBio to develop therapeutics using the biotech’s Treg platform. Pfizer, Eli Lilly and J&J have all invested in TRexBio’s Series A. BMS bet on GentiBio because it believes that its platform can result in more specific and stable therapeutics when compared to other Treg players.
I expect more pharmas to invest in/partner up with/acquire Treg biotechs in the coming years. Biotechs with Treg platforms actually stand to win a lot by partnering up with big pharma early on since the whole Treg game is heavily based on computational technologies - which is where large pharmas can bring in a lot of value with their tech firepower. Two biotechs with interesting Treg platforms that I suspect could be involved with large pharmas soon are Abata Therapeutics and Sonoma Therapeutics.
BMS is also looking to beef up its IBD pipeline/portfolio with this deal. The company has an approved IBD asset, Zeposia, that is also approved for MS. In ulcerative colitis, BMS’ asset is mostly competing against AbbVie’s Humira and Rinvoq, Pfizer’s Xeljanz, Takeda’s Entyvo, and J&J’s Stealara. What is interesting and actually pretty attractive about the IBD market is that patients switch treatments rather frequently, which means that in theory all players should be able to get a piece of the pie if they play their cards right. Patients are always trying to get away from injectables if there is no significant loss in efficacy, so this is good news for both BMS and AbbVie since Zeposia and Rinvoq are oral assets. Another interesting trend is that patients and physicians alike have reservations about JAK inhibitors on safety grounds, which could mostly hurt Pfizer’s Xeljanz - as well as AbbVie’s Rinvoq to a certain extent. BMS has been relatively timid with its marketing for Zeposia, but I expect the drug to modestly gain market share in the coming years.
BMS’ other IBD asset is deucravacitinib. The asset flopped in an ulcerative colitis trial last year but management has high hopes for it in psoriasis. BMS thinks of deucravacitinib as a potential blockbuster - but due to its mechanism of action, it could have a safety profile similar to JAK inhibitors, which could badly hurt its uptake if approved.
BMS is facing a looming patent cliff - actually the worst in recent history - that will decimate sales of Rivlamid, Opdivo, and Eliquis in the coming years. So BMS really needs deucravacitinib to deliver - but that doesn’t necessarily mean it will. BMS’ deal with GentiBio is definitely a step in the right direction in terms of bolstering the pipeline in the long run - but BMS needs more late-stage assets to mitigate the upcoming flood.
DISCLAIMER: This is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
DISCLOSURE: I have no business relationships with any company that is mentioned in this article.