Tag Archives: Flagship Ventures

Moderna Therapeutics as the next Genentech? Not so fast

By Steve Dickman, CEO, CBT Advisors

December 10, 2012 (slightly shorter version originally published on TechnologyReview.com)

Quick biotech PR tip: When exiting stealth mode, heralding your company as the next Genentech is one way to get above the noise. That was the approach of Moderna Therapeutics, a Cambridge, MA-based startup that announced itself last Thursday, revealing that it had raised more than $40 million and attracted an all-star set of board members and scientific advisers.

Announcing that you just might be on the way to becoming Genentech II raises the bar a wee bit. And, at first blush, Moderna looks like it might even get over that very high bar.

Central Dogma of Molecular BiologyThe concept is intriguing, to say the least. Biology’s central dogma is “DNA to RNA to protein.” Although Nobel Prizes have been won for discoveries that expand upon that central dogma (the discovery of reverse transcriptase, for example), the core approach underlies the first several generations of biotech products. Think EPO, Neupogen or the grandfather of them all, human insulin. You manipulate the DNA in the lab and then express the protein in the production facility. Then you put it in a vial and sell it to the patient, who gets an injection or an infusion. The main role for the dogma’s middleman, messenger RNA (mRNA), is a passive one: get transcribed from the DNA then, in turn, get translated into protein.

Moderna turns the dogma on its head: go straight to the RNA, do some fancy chemical tricks to it and deliver it directly into the body. This makes the patient herself into the production facility. All of us carry around cellular protein factories, known as ribosomes, and if properly activated, those can be harnessed (at a much lower cost) to produce proteins in which we have deficiencies.

One report on Moderna, published on Xconomy, quoted venture investor Noubar Afeyan of Flagship Ventures as saying that the company “builds on lots of things that have been tried before.” One of those things is gene therapy, providing genes (that is, DNA) via viruses or other delivery vehicles and trying to get cells to express those genes. Those approaches, too, tried to use the body as a manufacturing facility. Unfortunately, with some recent intriguing exceptions, most of them have failed.

Aside from this novelty, three things make Moderna so interesting:

Breadth of application

Since the mechanism is potentially so universal, proteins could be produced that address any number of diseases. The company said it will focus first on areas where protein therapeutics are already well-established: oncology supportive care, inherited genetic disorders, hemophilia and diabetes. But the company also claimed that it can also induce production of intracellular proteins that could never be given exogenously due to efficacy or immunogenicity concerns. Should this approach work, and it’s a bit of a long shot, it opens up new areas of application to the pharmaceutical industry.

Repeat dosing

Unlike many gene therapies, which could potentially be curative, in Moderna’s case the patient will need to be dosed with the mRNA over and over again. Think “recurring revenue stream.”

Intellectual property

When Genentech and Amgen were founded, neither one had a monopoly on the production of all human proteins in bacteria. When monoclonal antibodies were invented in Cesar Milstein’s laboratory in Cambridge, UK, Milstein was discouraged from patenting the concept. But in Moderna’s case, filing broad and deep intellectual property was the company’s central focus and a big reason why the company remained in stealth mode for the past two years. This means that even if other companies manage to enable the use of mRNA-based techniques in areas not yet explored by Moderna, the company could still demand royalties.

Yet another reason to pay attention to Moderna: unlike many other biotech companies, Moderna was not based on work published soon after its founding. The original publication that drew interest from Afeyan didn’t involve using patients as protein factories at all. The paper, published by company founder Derrick Rossi in 2010, involved using injected mRNA to produce cells that resemble embryonic stem cells. According to the Xconomy article, Afeyan did not want to invest in a stem cell company, which he perceived as too risky. Instead, he suggested that Rossi use the mRNA as a way to induce protein production in patients. That led to the key experiments, as yet unpublished, that were the basis of the company’s intellectual property and its initial financing. According to Moderna’s triumphant press release, the publications are supposed to come in 2013.

At the same time, there are three big questions:


Isn’t Moderna facing a double hurdle, first in selectively getting into the right kind of cell and then in achieving the right therapeutic dose level? The first of these hurdles represents the same kind of delivery problem that has presented such an enormous challenge to RNA interference (RNAi) companies like Alnylam. For all its promise, RNAi was born amid a hail of questions expressing doubt about delivery. How to use systemic delivery to propel nucleic acid molecules with strong negative charges and potentially vulnerable to ribonucleases into the right cell types in the right organs at high enough concentrations to have a biological effect? That was the question. (The early results, as I viewed them in a cramped biochemical laboratory in Kulmbach, Germany, in 2002, looked blotchy at best.) More than ten long years later, despite some powerful efforts that cleverly take advantage of biological reality, for example, the “leakiness” of tumors, those questions have still not been completely laid to rest.

The other part of the delivery challenge has to do with what happens to the mRNA once it is inside the right kind of cells. How many cells exactly has it penetrated? What are the expression levels over time of the desired proteins on a per-cell or per-tissue basis? Will the levels in one patient be the same as in the next one? Achieving appropriate dosing without setting off alarm bells at the Food and Drug Administration will be tough.

Where are the other investors?

The only institutional investor named in the press release was Flagship Ventures. If other VC firms were involved, one would expect to find them sharing the limelight. So either Flagship decided that what it had in Moderna was so good, it did not want or need to share or other VC funds were approached and said no. It will be interesting to learn over the coming weeks which of these explanations, or which combination of them, pertains.

What’s the value in its first applications?

Let’s assume that the Moderna approach works. Suddenly EPO, Factor VIII and beta-globin can all be produced in patients deficient in these proteins simply by dosing them regularly with mRNA. But so what? There are already therapies on the market that will be doing this. In fact, some of those will be going generic and will be joined on the market by “biosimilars” that will presumably cost less than the existing (expensive) drugs. Furthermore, many of today’s most successful protein therapeutics have been modified (e.g. pegylated) to improve their half-lives. Where would be the advantage of an injection of mRNA over one of protein, especially a second-generation, long-acting protein such as Amgen’s Neulasta®?

Perhaps the advantage would come in proteins that cannot be injected as such because they elicit unwanted immune reactions from patients. But there are not too many examples that come to mind (thrombopoietin is one). That might be one reason why Moderna CEO Stéphane Bancel said that the company would be partnering the largest-market indication areas, like cancer, while retaining only rare diseases (in which intracellular protein production might make sense) for itself.

In summary, Moderna reflects a novel approach. For that, its founders and visionary investors deserve their well-earned day in the spotlight. It is especially commendable that a venture investor in the current no-whip, Splenda-only funding environment would create a good old-fashioned full-fat latte of a biotech company. Funding it exuberantly, vigorously protecting the IP and keeping the shares to yourself are all probably wise moves. But for the rest of us to see Moderna as a new Genentech, Moderna will have to publish in a peer-reviewed journal, partner with a pharmaceutical company or at least explain how it addresses basic questions like delivery and consistent dosing across tissues and patients.

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Filed under Startup

Venter Builds a Bacterium – and a Bio+Technology Company

By Steve Dickman, CEO, CBT Advisors

For a glimpse at the future of biotechnology, we recommend this week’s Economist cover story on Craig Venter and his Science paper describing the creation of a bacterium with a synthetic genome. The accomplishment, which made front pages around the world on Thursday*, reflects a high-profile step along the winding path to a new industry. The new bio+technology will practice true genetic engineering on genomes and organisms, yielding predictable and practical results including – one hopes – cheap and environmentally friendly biofuels.

The Economist story along with an accompanying editorial is available without charge here. The Science paper is similarly free here.

The Economist has done its usual thorough job in this piece. The science and technology editor of many years, Geoff Carr, demanded and got the cover for the story, not to mention three full pages inside. That’s unusual treatment for a science piece. The piece, unattributed, lays out the case for why Venter’s creation is so remarkable: “the first creature since the beginning of creatures that has no ancestor.” As you see from this example, the treatment is somewhat breathless (cue the Frankenstein metaphor) but also persuasive:

• We learn the limitations of Venter’s organism, cobbled together as it was from the carcass of an enucleated bacterium in which the new genome hijacked the cadaver’s protein synthesis machinery.
• We learn the status of Boston-based academic projects like the RNA-based self-replicating life forms that Harvard’s (Nobel laureate) Jack Szostak hopes to create that can mimic what early life may have looked like in a primordial “RNA world.”
• And we learn of next-stage projects like that of another Harvard professor, George Church http://arep.med.harvard.edu/gmc/, who is attempting to engineer a protein-synthesizing ribosome from scratch.
• Finally, we learn the magazine’s view that although technology, which until now been mostly of academic interest, is perhaps still nothing more than a parlor trick (the magazine calls it a “stunt”), there is one big reason to believe that re-engineering of microorganisms is the next big step toward true bio+technology.

That reason derives largely from two diverging exponential curves: the rising productivity of efforts to synthesize DNA; and the cost of said synthesis, which is plummeting. This application of “Moore’s law” leads directly to the conclusion that ever-fancier tricks will lead to ever-more practical and powerful end products, which might include carbon-dioxide-eating, gasoline-producing bacteria. At least this is what Venter wants investors in his company Synthetic Genomics to believe. The case is strengthened by this publication, although in July, 2009, presumably even before the paper was even submitted to Science, Exxon Mobil had promised to invest as much as $600 million in Synthetic Genomics.

Moore's Law of Biology: declining cost, increasing productivity of DNA synthesis

Figure 1: Exponential improvement in the availability of (some of) the stuff of life (Courtesy The Economist)

And therein lies an interesting twist not covered in the article: how the race for a new organism is playing out on the commercial side. It is just thirteen months since the Boston Globe (in April, 2009) announced the demise of the Boston area’s entry to the gene synthesis race, a now-defunct, then five-year-old biotech company called Codon Devices. Codon Devices, a CBT Advisors client, went to market with a strategy of selling synthetic DNA. The company had high-profile advisors, including Church and then-MIT professor Drew Endy, also quoted here. Codon did not lack for high-profile investors, who included Kleiner Perkins, Alloy Ventures and the Boston area’s own Flagship Ventures and Highland Capital. Its corporate slides, presented at BIO 2006 in Chicago, even mentioned “Moore’s law in biology” as a selling point. But the assumption that “if you build it they will come” did not work for a DNA factory. There was a lack of demand for DNA, even long stretches of it, at premium prices.

Codon’s problems included the main one mentioned by the Globe: lack of ability to raise additional venture money during a financial crisis and an IPO drought. But in retrospect it also seems like the company did not forward integrate quickly enough into lucrative end markets, preferring instead to try to supply them all and try thereby to capitalize on its technology advantages. Other gene synthesis companies have recently moved beyond selling genes (e.g. California-based DNA 2.0, which just signed a strategic alliance with a protein expression company) or been sold off (GeneArt in Germany, bought by Life Technologies last month).

Venter’s firm was never content to stop at DNA synthesis alone. It forward-integrated all the way to a new and interesting form of life. Synthetic Genomics has also been quicker and more efficient – not to mention having Venter himself as its marquee spokesman – at finding a deep-pocketed and thus far sustainable base of investors.

We agree that synthetic biology has the potential to be the future of biotech. That’s why we are calling the field it is spawning bio+technology. It will take not just cheap DNA but brilliant bio-architects doing more than parlor tricks to make the new industry a reality.

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*The Belfast Telegraph jumped the gun and broke the Science embargo on publication early on Thursday. That landed the story at the top of the web sites of newspapers and scientific journals around the world a day or so ahead of the original plan.

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