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August 21, 2008
RNAi: Bubble or Not?
Many readers will well remember when Merck bought the RNA-interference company Sirna in 2006. They paid over a billion dollars for them, and made the whole RNA area an even bigger field for speculation than it was already.
Another big player in that field is Alnylam, who have been making deals all over the place. Many shareholders have been waiting for someone to buy ALNY for a similarly hefty premium, but the wait has been long (and all those agreements make such an acqusition harder and harder to realize).
As that post (and this one, and this one from 2004)) should make clear, I've been a bit cooler on the prospects for RNA therapies. I think the current RNA field is full of extremely interesting things, wonderful discoveries, fascinating research tools which could lead to all sorts of things - but I don't necessarily think it's full of new drugs per se. Nucleic acid-based therapies are just nightmarish to administer, and unless a real breakthrough in doing that appears, I think that (as drugs) they're always going to have their ankles tied together.
Well, Jonas Alsenas at Leerink Swann agrees, and he's not afraid to say so. According to Mike Huckman at CNBC, the firm initiated coverage of Alnylam with Alsenas saying that he thought the stock should be trading at about half its current value, and that he didn't see them developing any products for many years, if ever. And he went on to this statement, which I don't think anyone in the industry can deny:
The pharmaceutical industry is often swept by new technology fads. They are caused by sincere enthusiasm, fears of being left behind, and desperation to fill chronically depleted development pipelines, in our view.
I'm sure that the ALNY investors are not going to take this well, but hey, the truth hurts. For now, I continue to agree that modern RNA techniques are extraordinary research tools - but not drugs, not in almost every case.
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