Several readers have asked me to respond to comments made elsewhere on the Internet with regard to start of Voyager Therapeutics and whether or not Benitec (OTCPK:BNIKF) has been passed by in terms of it being the gatekeeper of ddRNAi. Instead of responding individually I thought that I would make one post on this Instablog.
In the past Benitec has behaved as if it was the gatekeeper of DNA Directed RNA Interference (ddRNAi) because of the Graham patent licence it holds from Australia's Commonwealth Scientific and Industry Research Organisation (CSIRO). It has signed several licensing deals with companies such as Calimmune and Genable Technologies from which it will obtain revenue. Several years ago, establishing royalty streams from licensees seems to have been the main focus of revenue raising for the company. However, the Graham patent will expire in 2018 and so the long term future of the company cannot depend on such royalties.
Recognising this the current management of the company are steering it away from a platform (ddRNAi) royalty revenue model to a pipeline royalty model, where revenue will be based around the IP generated through research into specific pipeline diseases, such as HCV and Non-Small Cell Lung Cancer (NSCLC). In these specific areas Benitec holds additional patents or it has exclusive licences for the IP. So, while the notion of all users of ddRNAi having to pay Benitec a royalty for the rights is very appealing, the reality is, with 2018 looming, the company needs to move away from this model.
That said, imagine how much the company would be worth if Tribetarna extended the life of NSCLC patients by 2 years more than the current standard of care. Imagine the value of the company if TT-034 gets 10% of the HCV market. These examples indicate just how valuable Benitec's new and additional IP could be.
The bottom-line is that Benitec does not have to be a platform IP company. Its transition to a pipeline IP company could still make it a financial success and deliver significant benefit to shareholders.
With regard to Benitec advancing its IP, one only needs to look at its HCV treatment, TT-034. TT-034 evolved from TT-033 which was designed, in part, by one of the founders of Voyager Therapeutics. As testing showed flaws in the design of TT-033 the design was changed and it became TT-034. The rights to the new design are owned by Benitec.
Benitec has done has much as it can with the limited funds that it has had at its disposal. Its move into a pipeline and not a platform driven company shows that management understands how to evolve the company and in no way detracts from the fact that it has a significant financial upside. This move may not be appreciated by other commentators on the Internet and so their comments may be ill-directed.
Just my opinion, of course.
Disclosure: I am long BNIKF.