RNA Interference: NOT Better Late Than Never
by Michael Shulman
Biotech Blitz
RNA interference is arguably the hottest area of raw biotech research today.
And, up front, I don’t like it as a place for investors to put their money for two reasons -- it's too early, and it is too late.
It is far too early to see if this technology and approach for treating disease will pay off in the form of approved drugs and treatments.
It is too late because many of the stocks in this segment have been bid up due to M&A and partnership activity between the big pharma dinosaurs that are desperate for new approaches and the little itty bitty start ups a decade or more away from an approval drug.
And, like most investors, I don’t like it because I missed it.
What is RNA interference?
It is the use of RNA regulation of gene expression to inhibit the genetic direction given to disease -- simply put, the use of RNA to mess up gene expression in disease. Check out the complete definition at Wikpedia if you are helping your children with their homework or if you want to pose as a scientist at a cocktail party .
There is an even more boring, ongoing discussion of the science at RNAi News. And if that gets you going, there is also a Genome News, but I will save that dor a rainy day. Last year, Craig C. Mello and Andrew Fire won the Nobel Prize for their work in RNA interference in roundworms. Too bad you cannot swallow these roundworms to cure what ails you.
Why am I such a cynic? Because RNAi is elegant but incredibly hard to manage and build into real drugs. The single biggest task is to get enough engineered RNA into a human cell -- enough to treat the target disease. The problem is RNA is inherently volatile and unstable, so there is a great deal of work required on drug delivery and packaging before any of this becomes real. The first targets will be where drug delivery is easiest: A shot (literally) in the eye, inhaled treatments in the lungs and so on.
Stay with me folks! This is a blog about money, not RNAi pathways or molecules.
IS there still money to be made among the RNAi intereference stocks? I spent a good deal of time on this one, as late as this entry might be, and I am still uncomfortable. I admit a bias against investing based on the hope of M&A activity – but, well, it’s your dough.
And let me say, though, that RNA interference or something akin to it -- something that modifies or suppresses the genetic sequences of disease -- is arguably a holy grail in medical treatments, for it goes after the disease and the disease alone -- at least we hope so -- and leaves the rest of the body alone -- again, we hope.
Alynlam (ALN): This used to be a true dog -- it has now licensed more than $300 million in core technology to Roche and that company also got a 5% stake. A dog no more, and far too expensive to buy. Alynlam is also working with heavyweight device maker Medtronic.
Arrowhead Research (ARWR):This outfit invests in early stage research, including RNAi and then if anything it has comes close to success ARWR will partner it off or bring it to market.
CyTrx (CYTR): This company manages press releases and the growth spurts in its stock better than its labs and, cleverly enough, announced a new subsidiary to do RNAi-only research earlier in the year. Too much hype, not enough hope, stay away.
ISIS (ISIS): This company was in the news in the past few days as it cut a major deal to work collaboratively with Alnylam to form a company called Regulus to do research in microRNA, a derivative technology. Why? To eventually take this new outfit public because they are tired of losing money on RNAi research without a payoff. I will write about Regulus when it comes to market.
Merck (MRK) -- through Sirna (formerly RNAI): Merck bought Sirna for $1.1 billion late last year to get into this game and Sirna was the only company with a drug in late-stage testing. The drug is for age related macular degeneration. It was this purchase that set off the frenzy in RNAi stocks. I think MRK is almost a short, let alone an investment, and I would stay away from Merck at all costs.
Rosetta Genomics (ROSG): This company is also specializing in microRNA and is the closest to a possible investment for me because it
a) is benefitting from the hundreds of milliosn spent by others on research, and
b) it has not done as well as others since its recent IPO so the stock is not ridiculously priced. If you look at the little things like revenues and profits ROSG is over priced, but compared to other RNA stocks that have burned through serious dough, it is in better shape -- sort of.
Yes, I missed the run. But I also owned Dendreon (DNDN) at chump change prices, saw it go past $20 and got out. So I do get it right more than occasionally – and if you are going to go speculative, take a look at immunotherapy, next up here.
RELATED READING:
- RNAi: Next Phase or Next Fad?
- Micro RNAs: The Last Frontier of Medicine?
- RNAi developments by Alnylam, CytRx Highlight Tuesday's Biotech News
- Merck Looking To Become RNAi Technology Leader
Biotech Blitz is a regular contributor to BioHealth Investor
______________
Biotech Blitz
RNA interference is arguably the hottest area of raw biotech research today.
And, up front, I don’t like it as a place for investors to put their money for two reasons -- it's too early, and it is too late.
It is far too early to see if this technology and approach for treating disease will pay off in the form of approved drugs and treatments.
It is too late because many of the stocks in this segment have been bid up due to M&A and partnership activity between the big pharma dinosaurs that are desperate for new approaches and the little itty bitty start ups a decade or more away from an approval drug.
And, like most investors, I don’t like it because I missed it.
What is RNA interference?
It is the use of RNA regulation of gene expression to inhibit the genetic direction given to disease -- simply put, the use of RNA to mess up gene expression in disease. Check out the complete definition at Wikpedia if you are helping your children with their homework or if you want to pose as a scientist at a cocktail party .
There is an even more boring, ongoing discussion of the science at RNAi News. And if that gets you going, there is also a Genome News, but I will save that dor a rainy day. Last year, Craig C. Mello and Andrew Fire won the Nobel Prize for their work in RNA interference in roundworms. Too bad you cannot swallow these roundworms to cure what ails you.
Why am I such a cynic? Because RNAi is elegant but incredibly hard to manage and build into real drugs. The single biggest task is to get enough engineered RNA into a human cell -- enough to treat the target disease. The problem is RNA is inherently volatile and unstable, so there is a great deal of work required on drug delivery and packaging before any of this becomes real. The first targets will be where drug delivery is easiest: A shot (literally) in the eye, inhaled treatments in the lungs and so on.
Stay with me folks! This is a blog about money, not RNAi pathways or molecules.
IS there still money to be made among the RNAi intereference stocks? I spent a good deal of time on this one, as late as this entry might be, and I am still uncomfortable. I admit a bias against investing based on the hope of M&A activity – but, well, it’s your dough.
And let me say, though, that RNA interference or something akin to it -- something that modifies or suppresses the genetic sequences of disease -- is arguably a holy grail in medical treatments, for it goes after the disease and the disease alone -- at least we hope so -- and leaves the rest of the body alone -- again, we hope.
Alynlam (ALN): This used to be a true dog -- it has now licensed more than $300 million in core technology to Roche and that company also got a 5% stake. A dog no more, and far too expensive to buy. Alynlam is also working with heavyweight device maker Medtronic.
Arrowhead Research (ARWR):This outfit invests in early stage research, including RNAi and then if anything it has comes close to success ARWR will partner it off or bring it to market.
CyTrx (CYTR): This company manages press releases and the growth spurts in its stock better than its labs and, cleverly enough, announced a new subsidiary to do RNAi-only research earlier in the year. Too much hype, not enough hope, stay away.
ISIS (ISIS): This company was in the news in the past few days as it cut a major deal to work collaboratively with Alnylam to form a company called Regulus to do research in microRNA, a derivative technology. Why? To eventually take this new outfit public because they are tired of losing money on RNAi research without a payoff. I will write about Regulus when it comes to market.
Merck (MRK) -- through Sirna (formerly RNAI): Merck bought Sirna for $1.1 billion late last year to get into this game and Sirna was the only company with a drug in late-stage testing. The drug is for age related macular degeneration. It was this purchase that set off the frenzy in RNAi stocks. I think MRK is almost a short, let alone an investment, and I would stay away from Merck at all costs.
Rosetta Genomics (ROSG): This company is also specializing in microRNA and is the closest to a possible investment for me because it
a) is benefitting from the hundreds of milliosn spent by others on research, and
b) it has not done as well as others since its recent IPO so the stock is not ridiculously priced. If you look at the little things like revenues and profits ROSG is over priced, but compared to other RNA stocks that have burned through serious dough, it is in better shape -- sort of.
Yes, I missed the run. But I also owned Dendreon (DNDN) at chump change prices, saw it go past $20 and got out. So I do get it right more than occasionally – and if you are going to go speculative, take a look at immunotherapy, next up here.
RELATED READING:
- RNAi: Next Phase or Next Fad?
- Micro RNAs: The Last Frontier of Medicine?
- RNAi developments by Alnylam, CytRx Highlight Tuesday's Biotech News
- Merck Looking To Become RNAi Technology Leader
Biotech Blitz is a regular contributor to BioHealth Investor
______________
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