A Glass Half-Full

Gene silencing by RNA interference (RNAi) has captured the imagination of Wall Street and a new generation of biotech entrepreneurs. Rarely has there been so great a buzz surrounding a new therapeutic paradigm, including multi-billion dollar deals, venture capital funding of numerous start-ups and a Nobel Prize – all before the first marketing approval.

Enthusiasm in the industry for RNAi is encouraged by the notion that this may be the long-sought ‘holy grail’ of the genomics revolution. RNA interference is a method that can, at once, validate a target gene and lead directly from a gene to a drug. Scientists are intrigued by the idea that the discovery process could be encapsulated in a computer algorithm, whose input is genomic sequences. In practice, however, the discovery and development path is more complex. It will remain a human insight-intensive process, whose productivity is amplified by computation.

In fact, the apparent simplicity of the RNAi phenomenon belies the considerable development of ancillary technologies required to advance and market a safe and efficacious therapeutic drug. The advantages of the RNAi approach are groundbreaking: short timeline to target identification and validation; rapid realisation of in vivo proof-of-principle; the likelihood that animal models are predictive; the promise of specificity; harnessing an indigenous mechanism; silencing genes of interest, and so on. On the other hand, the obstacles to developing and marketing a therapeutic drug are manifest and challenging: formulation and delivery; uptake; intracellular localisation; PK/PD; tissue and celltype specificity; off-target effects; potential for immunogenicity; CMC challenges; and regulatory hurdles, among others.

The industry has recognised this situation as a ‘glass half-full’. The programmes closest to the clinic have carefully adopted strategies that tend to avoid or minimise the most difficult obstacles on the path to market.

This article presents an overview of RNAi technology in a business strategy context, and discusses the issues involved in developing a commercially viable product. Several examples of current therapeutic programmes are discussed in the framework of Graham and White’s Harvard Business Review article, in which they delineate business and scientific criteria for commercially successful technological innovations.

Radical scientific innovations are a profound challenge to the pharmaceutical and biotechnology industry – on the one hand opening up new opportunities to serve the market; on the other, forcing a rethinking of existing business paradigms and operating assumptions. RNAi is such an innovation. Already, it has proven its value as a research tool in target validation for conventional smallmolecule drugs and biologics. Ironically, RNA interference has become the new paradigm for innovative drug discovery, while simultaneously becoming an essential component of the discovery and target validation process in the development of small-molecule drugs, by classical screening and rational design methodology.

In the short time since the initial demonstration of RNAi in animals, numerous companies have been launched in order to exploit the direct therapeutic potential. Billion-dollar deals have been made, and a Nobel Prize has been awarded. The intense commercial interest in this technology highlights its strategic importance. In the past decade, much has been made of the need for additional clinical candidates to fill pharmaceutical pipelines: expiration of patents; increasing pressure for ROI; and the trend toward discovery and development partnerships with smaller innovator companies and academia. Add to this ‘perfect storm’, until recent months, relatively easy liquidity in public and private financial markets, which propels new start-up companies.