A Promising Future for DNA and RNA-based Therapies
In this first of a three-part series, Earlybird Health’s Partner Florent Gros and Investment Professionals Dr. Rabab Nasrallah and Dr. Alejandro Restrepo Arango will venture into the world of DNA and RNA-based therapies. This article will explore the evolving landscape of DNA and RNA-based therapies in healthcare, highlighting their potential as novel modalities for treating diseases and the investment considerations associated with these innovative approaches.
Small-molecule and antibody therapeutics are the most commonly used modalities for regulating proteins and enzymes. Small molecules are limited in their ability to only target a fraction of the estimated 20,000 human proteins, with ~3,000 being amenable.
The introduction of monoclonal antibody therapies, known for their engineering simplicity and a broader range of target proteins, has significantly broadened the spectrum of druggable targets. Further expanding the breadth of such assets to treat disease remains a significant part of R&D expenditure both by pharma and biotech. Innovation in the scope of optimizing antibody binding, structures, affinity and small molecule development timelines, binding, manufacturing, etc., is growing.
The field has also rapidly expanded into new target types (DNA, RNA, metabolites, and others) and modalities (gene editing, ASOs, siRNA, cell therapies, degraders, and others). While the fundamental role that DNA and RNA play in health and disease has been clear for decades, the more recent development of technologies to target such assets has brought the field into focus. Despite these remarkable advances, small molecules and antibodies continue to dominate the therapeutic market, commanding a substantial 44%. DNA/RNA-based therapies, while poised for growth, are projected to capture a modest 7% of the market by 2026.
Pharma’s extensive knowledge and success in small molecules and antibodies continue to drive investments, as seen in Pfizer’s $43 Billion acquisition of Seagen recently to develop new antibody-drug conjugates. While interest in innovative technologies advancing RNA-mapping/ targeting, DNA/RNA disease associations, genomic editing capabilities are growing, the emerging nature of this sector highlights the relatively higher level of risk it brings compared to traditional approaches. Success in this field requires investments in both assets and internal expertise.
As an investor, innovation in DNA/RNA-based therapeutics combined with the increasing interest from strategic players makes it compelling to actively invest in such startups. As we map the ecosystem, we become more aware of the risks — unclear regulatory processes, manufacturing costs, off-target toxicity, high list prices, and more. It is noteworthy that as more assets reach the clinic and progress through trials, we gain a better understanding of what drives success. This refines our investment approach (what risks we can take and when) and defines the technological innovations we are likely to invest in.
From a therapeutic perspective, the DNA/RNA space can be broadly divided into two categories:
- DNA/RNA as therapeutic modalities — treat disease using DNA/RNA molecules to modify expression levels, etc.
- DNA/RNA as therapeutic targets — treat disease using gene editing or RNA modulation, etc.
In this article, we will delve deeper into modalities, exploring developments in the field and investment considerations.
DNA/RNA as therapeutic modalities
To date, the two most commonly used RNA therapeutic-based modalities are mRNA and siRNA. Among the top 18 biopharma companies, 12 have engaged in deals related to mRNA technologies and 16 in siRNA.
While cancer vaccines have not seen much success over the years, developments in RNA-based technologies during the COVID-19 pandemic have revived the space, with notable deals in mRNA showing interest in developing cancer vaccines. BioNTech has developed years-long partnerships with Genentech (since 2016) and Sanofi (since 2015). Both deals amounted to more than $600 million plus milestones. Clinical trials are ongoing with favourable results. Similarly, Moderna and Merck have been collaborating since 2015 with a current Phase 3 trial in melanoma. Recent siRNA deals are aimed at a broader range of diseases, focusing particularly on metabolic diseases. Novartis has made two acquisitions, The Medicines Company (2019 — $9.7 Billion) and DTx (2023 — up to $1 Billion), to target hypercholesterolemia and Charcot-Marie-Tooth disease. Novo Nordisk and GSK independently made deals to develop siRNA therapies against NASH with a total amount of $4.3 billion.
While the strategic interest and clinical developments using these two modalities are strong, we are also seeing increasing use of antisense oligonucleotides (ASOs). ASOs represent a unique form of RNA-based therapy modality that can be injected without the need for a carrier or protective shell. This technological innovation coupled with improved (target specificity) mapping on both DNA/RNA levels and disease associations has led to interesting developments. In 2021, 64 ASO-based therapies were tested in clinics at different stages, targeting the central nervous system (CNS), muscle, cardiovascular, metabolic, ophthalmology, cancer, and other diseases. Nine of these therapies have been approved for commercial use; nevertheless, the off-target effect of ASOs remains the main obstacle to reaching a wider adoption. We see two ways to improve this challenge:
- Sequence specificity: Single-cell RNA sequencing has identified tissue/disease-specific RNA sequences that allow for improved tissue/disease targeting. One example is Haya Therapeutics, which is taking the lead on mapping RNAs to achieve high levels of tissue and cell specificity.
- Tissue-specificity: Chemical modifications can induce better tissue selectivity by directing molecules to the right tissues. Particularly, Ionis Pharmaceuticals has developed a third generation of ASOs, which are coupled with biological moieties that deliver them to tissue of interest. With their developments, Ionis has achieved selective delivery of ASOs in CNS disorders (among others), which allows for systemic administration, a consistent problem for neurological indications due to biological barriers (Spinraza’s administration is more invasive).
With these developments, we see companies increasingly innovating in addressing unmet needs in hard-to-treat indications. VICO Therapeutics and Cardior Pharmaceuticals address indications without currently available treatment, such as Huntington’s disease, or indications with treatments that do not address the root cause of the disease, as in the case of myocardial dysfunction. Although these companies are in the early stages of development, we expect to see future deals around these assets. Recent commercialization deals from top pharmaceutical companies (Biogen, AstraZeneca, and Roche) show the appetite to acquire innovative ASO-based therapies after clinical safety has been proven. Of the total approved ASOs, only Sarepta Therapeutics has developed and commercialized its own internal assets.
With development in the sector, we believe that DNA/RNA-based therapeutic modalities present a significant opportunity to treat areas with huge unmet needs or target novel disease mechanisms. From an investment perspective, as the field develops, we increasingly understand the risks associated with clinical success and with more engagement from industry players, we see this space having a significant impact on the industry.
If you are a founder of a biotech company, stay in touch with Florent, Rabab, and Alejandro on LinkedIn.
Would you be interested in presenting your investment opportunity to our team? Send us an email at health@earlybird.com — our Health team will get back to you!
If you’ve enjoyed this article, make sure to look out for the next two pieces in this series on DNA and RNA-based therapies!
