Oligonucleotide Therapeutics: The Second Evolution – Redefining the Frontier of Innovative Drug Development

Feb 25, 2024 14:24 CST Updated 14:24

Ribo Life Science

Small Nucleic Acid Drug Developer

Boehringer Ingelheim

Developer of Innovative Drugs and Therapies

Junshi Biosciences

Innovative Drug Developer

Hengrui Pharma

Innovative and High-Quality Pharmaceutical Developer

Sirnaomics

Nucleic Acid Interference New Drug Developer

Following ADCs, small nucleic acid drugs have become the new goldmine for MNCs to explore.

On January 3, Ribo Life Science announced a collaboration with Germany's Boehringer Ingelheim (BI), granting the latter an innovative small nucleic acid therapy for non-alcoholic steatohepatitis (NASH). The total value of this deal exceeds 2 billion US dollars. Then, on January 7, Novartis purchased multiple small nucleic acid drugs targeting cardiovascular diseases from Bowang Pharmaceutical, with an upfront payment as high as 185 million US dollars and a total transaction value reaching 4.165 billion US dollars.

Figure: Overview of Major License-Outs in the First Week of 2024, Source: Jinduan Research Institute

Compared with the previous ADC overseas trend, the total transaction amount of small nucleic acid drugs has been significantly higher recently, and the pharmaceutical companies favored by MNCs are also younger. After a series of consecutive license-out deals, China's innovative pharmaceutical companies have taken the lead in global drug development.

Small nucleic acid drugs are not a new phenomenon. Long before the pandemic, they were a core focus for multinational corporations (MNCs), but progress was interrupted by the outbreak. Now, with the completion of two major acquisition deals, small nucleic acid drugs are returning to the central battlefield of innovative drug development, and Chinese pharmaceutical companies are no longer content to play a supporting role.

Innovative Drug 3.0

If small-molecule chemical drugs laid the foundation for modern medicine, then Genentech ushered in a new era of biotechnology. Small-molecule chemical drugs and biological antibody drugs form the main framework of modern medical therapies.

Although this framework is capable of treating a wide variety of diseases, it still falls far short of meeting the needs of human medicine. Whether they are small molecule chemical drugs or biological antibody drugs, most of them target proteins such as kinases, receptors, and antigens. However, it is regrettable that over 80% of disease-causing proteins have remained "undruggable" targets, meaning no effective drug can reach them.

Figure: Overview of Drug Targets, Source: GF Securities

However, the synthesis of proteins must go through two major processes: transcription and translation, requiring nucleic acid substances such as DNA, mRNA, and tRNA. In theory, by mastering the genetic coding sequence of a pathogenic protein, a corresponding RNA chain can be designed. By silencing this RNA sequence, it is expected to prevent the formation of the pathogenic protein, thereby addressing many difficult and complicated diseases.

Based on this, the concept of small nucleic acid drugs emerged, and they are also regarded as innovative drugs 3.0, following small molecule chemical drugs and biological antibody drugs.

From the superficial protein level to the deeper nucleic acid level, attempting to bypass proteins and directly address the more fundamental underlying coding issues is the core logic of small nucleic acid drug development. Since it tackles problems at the underlying coding level, people have higher expectations for small nucleic acid drugs, with many even believing that these drugs could revolutionize the entire pharmaceutical industry.

Throughout the development history of small nucleic acid drugs, it can be roughly divided into three main stages: the Exploration Period (1978-1998), the Confusion Period (1998-2013), and the Growth Period (2013 to present).

Figure: Development History of Nucleic Acid Drugs, Source: GF Securities

During the exploratory period, small nucleic acid drugs were still in the theoretical stage, and it was unclear whether they could be successfully developed into drugs through nucleic acids. This led to a relatively slow development of small nucleic acid drugs during this phase, with major milestones primarily focused on academic research and industrial exploration being cautious. It took nearly 20 years from theoretical practice to the approval of the first drug—until 1998, when Ionis Pharmaceuticals' nucleic acid drug fomivirsen was approved by the FDA.

After the approval of the first drug, the small nucleic acid drug field quickly attracted many giant companies to enter, such as Roche, Merck, Pfizer, Sanofi, and Abbott placing significant bets. However, no one expected that small nucleic acid drugs were not yet mature at the time. First, the first drug, fomivirsen, was forced to withdraw from the market in 2003 due to low sales. Then, three major small nucleic acid drug pipelines failed in clinical trials, causing the popularity of this emerging field to rapidly drop to freezing point. During this period, many investors exited at a loss.

Despite a thorny path ahead, Ionis, the pioneer of small nucleic acid drugs, chose to persevere and eventually made another breakthrough in 2013 when its second product, mipomersen, was approved for the treatment of homozygous familial hypercholesterolemia, once again demonstrating the value of small nucleic acid drugs.

Thanks to the relentless pursuit of innovation by companies such as Ionis, Sarepta, and Alnylam, small nucleic acid drugs have emerged in large numbers in the following years. Not only has a blockbuster drug, nusinersen, with annual sales exceeding 2 billion US dollars been born, but also more than ten approved indications, most of which are for the challenging orphan drug market.

The Three Years Interrupted by the Pandemic

A tortuous journey: this is a microcosm of the development of small nucleic acid drugs.

After regaining industry recognition, small nucleic acid drugs once again became the focus of many MNCs' strategic layouts. If everything goes smoothly, they should rightfully become the third major category of drugs alongside small-molecule chemical drugs and biological antibody drugs. However, an unexpected event occurred again—just when the development of small nucleic acid drugs was at its smoothest, the pandemic suddenly broke out.

In addition to bringing the economy to a halt, the pandemic's most significant impact lies in its inducement for companies to excessively focus on another emerging nucleic acid drug platform—mRNA.

mRNA and small nucleic acid drugs together form the large category of nucleic acid drugs. However, unlike small nucleic acid drugs, which have undergone years of industrial iteration, mRNA experienced a sudden surge during the pandemic. Under the prestigious banner of the COVID-19 vaccine, a large number of multinational corporations (MNCs) flooded in, stealing the spotlight that should have belonged to small nucleic acid drugs. This is also the reason why the visibility of small nucleic acid drugs has declined in the past two years.

Figure: Classification of Nucleic Acid Drugs, Source: CITIC Securities

As we previously pointed out, the COVID-19 vaccine has overly inflated the technological expectations of mRNA, which is very likely to be the largest healthcare investment bubble of the 21st century. Although mRNA remains a popular technology today, it no longer enjoys the same level of investment enthusiasm as before, and multinational corporations (MNCs) are gradually shifting their focus back to small nucleic acid drugs that were once overlooked.

A Review of the History of Small Nucleic Acid Drug Licensing Deals: From 2018 to 2020, this field witnessed frequent transactions, with major multinational corporations (MNCs) such as Biogen, Eli Lilly, GSK, Pfizer, Roche, and Novartis all engaging in a pipeline acquisition frenzy, much like their rush to acquire ADC pipelines last year. However, after the pandemic, the热度 of mergers and acquisitions for small nucleic acid drugs sharply declined, only recently regaining its status as a core target for MNC布局.

Figure: Overview of Small Nucleic Acid Drug Licensing Transactions, Source: CICC

If not for the sudden outbreak of the pandemic, small nucleic acid drugs would very likely have become a hot technology platform with higher priority than ADCs. However, there are no "ifs" in this world. During its rapid development phase, the pandemic abruptly halted the progress of small nucleic acid drugs, allowing ADCs to steal the spotlight that should have belonged to them.

The Next Gold Mine to Be Tapped

Small nucleic acid drugs have elevated human drug research and development to an entirely new dimension—the nucleotide coding level.

With RNA encoding, many undruggable proteins are expected to find new nucleic acid targets, significantly expanding the range of targets for small nucleic acid drugs. Compared with gene therapy, small nucleic acid drugs focus on the RNA level and do not alter the patient's original genome, making them safer. Additionally, RNA encoding sequences exhibit a certain regularity, allowing small nucleic acid drugs to achieve greater progress through continuous iterations.

Prior to this, the reason why small nucleic acid drugs entered a period of confusion was mainly due to the poor stability of the nucleotide molecular chain, a relatively short half-life, and susceptibility to degradation. Additionally, poor targeting could lead to off-target issues. To address these problems, the industry proposed two major solutions: one is chemical modification of RNA, and the other is the RNA delivery system.

Through chemical modifications of RNA, the stability of nucleotide molecular chains has been significantly enhanced, and the half-life has been greatly extended, such as methods involving phosphate backbone, ribose five-membered ring modification, and nucleotide chain end modification. On the other hand, the emergence of delivery systems has significantly improved the endocytic efficiency of small nucleic acid drugs, thereby helping them reach the designated sites where they are intended to function. Common delivery systems include cyclodextrin nanopolymers, lipid nanoparticles, conjugate delivery systems, etc.

With the two major weapons of chemical modification and delivery systems, small nucleic acid drugs have developed rapidly, and so far, 13 drugs have been launched. At this stage, small nucleic acid drugs mainly include two types of drugs: ASO drugs (antisense oligonucleotides) and siRNA drugs (small interfering RNA).

Figure: Overview of marketed small nucleic acid drugs, Source: GF Securities

ASO is a single-stranded oligonucleotide molecule typically containing 15-25 nucleotides. After entering the cell, ASO binds to the target RNA through base complementary pairing under the action of ribonuclease and then cleaves the target RNA via RNase H, preventing the protein from being expressed.

siRNA is a double-stranded RNA about 21-23 base pairs in length. After being transcribed in the nucleus, the double-stranded siRNA and associated proteins pass through the nuclear pore, where they are cleaved by the RNase III nuclease to form single-stranded siRNA. The resulting single-stranded siRNA binds with proteins such as Ago, which is used for recognizing complementary mRNA and serves as a template for cleavage. The formed protein complex is called the RNA-induced silencing complex (RISC).

The core mechanism of the two small nucleic acid drugs lies in restricting the expression of target RNA. ASOs can function in both the cytoplasm and nucleus, but they generally exhibit higher toxicity; siRNAs function only in the cytoplasm, but they are typically safer.

In addition to these two therapies, small nucleic acid drugs also include Aptamer therapy, which targets proteins and modulates protein activity. However, currently, only one drug, Pegaptanib, has been approved for marketing on this route, and more subsequent R&D iterations are still needed.

For the small nucleic acid drug market with immense prospects, leading pharmaceutical companies in China such as Junshi Biosciences, Innovent Biologics, and Hengrui Pharma have already taken the lead in strategic deployment. In April of last year, Junshi Biosciences launched a clinical trial for an ANGPTL3 siRNA drug, becoming one of the pioneering innovative drug companies to explore small nucleic acid drugs. Similarly, Hengrui Pharma also initiated the clinical trial for its siRNA drug, HRS-5635, in 2023. Also eyeing the potential of small nucleic acid drugs are Huadong Medicine and Innovent Biologics, both of which have partnered with Sirnaomics to enter the field of small nucleic acid drug research and development.

In addition to these leading pharmaceutical companies, Sirnaomics has its own self-developed delivery system—polypeptide nanoparticles—and the company also has several siRNA drugs entering clinical trials; Brii Biosciences, Ribo Life Science, and Bowang Pharmaceuticals also have deep expertise in the small nucleic acid drug field.

From the logic of the pharmaceutical industry, small nucleic acid drugs that penetrate the surface of proteins undoubtedly represent a technological leap. If this technology matures, it is highly likely to break through the current limits of human medicine. Small nucleic acid drugs are very likely to be the next goldmine waiting to be tapped, potentially giving rise to blockbuster products at the level of a "drug king."

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