RNAi Companies to Consider
Terry is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
RNAi and RNA companies had a terrible time when they were abandoned by big pharmaceutical companies. The abandonment came from the fact that both types of biotechs lacked proper delivery methods to get the RNA molecule strands to their target. Well it seems that this year all that has changed completely, as RNA therapeutics have been creating delivery methods to make their technologies work. Some RNA technologies use nanoparticles, lipids, and other forms of delivery. I will be discussing one RNAi company, and another RNA company that long term investors should put on their radars for some nice gains.
The RNAi to consider
The first is an RNAi biotech named Alnylam Pharmaceuticals (NASDAQ: ALNY). Alnylam has run up a lot from 2012 to 2013, edging up 195%! In the same time period, the Dow has gone up 84%! Alnylam is an RNAi therapeutic that's a bit different than the others. The reason being is Alnylam is targeting orphan diseases, which carry lot more benefits than non orphan diseases. Some advantages include longer market exclusivity, longer patents, and faster approval by the FDA.
Just recently, Alnylam reported results of its trial targeting a rare disease known as TTR-Amyloidosis. This disease causes a lot of abnormal mutations of proteins that accumulate in the liver and other organs. This condition is very severe because of the organs that are involved. Why investors should look into this is that orphan drugs get the whole market because of limited competition. Also, they can set high prices as there is no other therapy available for these patients. The results showed a knockdown of genes by 93%, which for a phase 2 trial is very good. Investors should watch closely as other trials are reported. The company is also targeting other rare diseases like Hemophilia and Hypercholesterolemia.
Now to RNA
The next company deals with RNA molecules, and this company is known as ISIS Pharmaceuticals (NASDAQ: ISIS). This company is amazing in its own right, as it has a big pipeline of antisense drugs. It uses a different method of delivery as it binds its drugs with the RNA molecule itself, and not the proteins. The company goes after diseases with unmet medical needs like Hypercholesterolemia and other rare diseases.
This company has partnerships with Biogen Idec and GlaxoSmithKline in the rare diseases department. The drug that ISIS has developed for hypercholesterolemia is Kynamro, which has been approved by the FDA on Jan. 29, 2013. ISIS is expected to eventually make up to $2 billion on the Kynamro drug. The fact is that Sanofi will get 50% of the profit of Kynamro sales. Still, this first antisense drug to be approved by the FDA shows that the ISIS technology works in terms of efficacy. With its big pipeline and ground breaking technology, I think ISIS will be a good long-term play.
Merck has acquisition power
Merck (NYSE: MRK) has a pretty decent pipeline, but has struggled lately compared to other big pharmaceutical companies. For instance, Merck has been forced to shut down certain divisions due to lack of innovation in drug therapies. Merck's worldwide sales had dropped 2% in 2012, and it doesn't seem like it will pick up anytime soon. Even though Merck had acquisition problems in the past, it should take a look at acquiring a biotech company to boost its pipeline.
Merck should attempt to go after ISIS, and there are two reasons behind it. For starters, RNA technology is different now than it was in the past. Merck had acquired Sirna Therapeutics which dealt with antisense and oligonucleotide technology. Merck had spent $1.1 billion in 2006 to acquire Sirna, but till date the acquisition hasn't shown any true value. Now is the time for Merck to acquire ISIS as RNA technology is coming more into play this year. The second reason is that ISIS has one amazing pipeline! If you compare ISIS' pipeline against other biotech companies, you will be amazed.
These two RNA companies have found a way to bypass the delivery failures in the past. With this new research, a lot of RNA companies can be good investments for those seeking a long term speculative play. RNA can be proven to help the biotech industry, and may later be acquired by big pharma. Whether these trials are ultimately realized remains to be seen, but it wouldn't hurt to have one speculative RNA type biotech in your portfolio. You never know how the industry will change, and you may be the first to see a revolution of RNA therapies making progress.
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