Written by Dan Cohen and Scott Matusow
Recently, we had a conference call with a Miragen Therapeutics (MGEN), and left the call impressed with what we heard. CEO Bill Marshall was frank and to-the-point, and was able to answer all of our questions regarding the science and business aspects of the company without hyperbole. Mr. Marshall is exactly the type of CEO we look for.
MGEN is focused on developing a unique subset of RNA biology known as micro RNA or miRNA utilizing a locked nucleic acid (LNA) platform. For the majority of the past two decades since its discovery, miRNA has been largely overlooked due to its non-coding nature. Scientists had assumed that because this segment of RNA did not appear to encode for a protein that it would likely just be waste genetic material. However, this couldn't be further from reality.
As it turns out, miRNA are implicated in the regulation of expression of a whole host of downstream proteins. Often times a single miRNA sequence, just 20-25 base pairs long on average can regulate entire networks of messenger RNA (MRNA), the subtype of RNA that directly leads translation of proteins. MiRNA is compatible with any mRNA sequence with a matching sequence along the chain. Given that a typical mRNA sequence is 1000 base pairs long, it isn't hard to imagine that the same miRNA can to bind to several hundred mRNA transcripts. Following a binding event, the mRNA is either prevented from transcription (aka silencing) or is signaled for degradation. Due to their small size and broad utility, miRNAs are able to switch cell polarity, functioning as tiny but potent master regulators of the genome.
MiRNA offers a potentially unique target set for pathologic conditions where patterns of expression have been observed across patient sets. This varies from the mRNA targeted approaches that investors have grown acquainted to such as Ionis (IONS) or Alnylam (ALNY), where the aim is to silence a specific protein target. As such, miRNA targets allow for a broad set of cross-markering across indications.
In 2016 and 2017, both Ionis and Alnylam had some issues with their respective platforms demonstrating toxicities which in some instances led to fatalities. In both the Volanesorsen and Inotersen Ionis reported events of thrombocytopenia, a sharp decline in platelet count likely as a result of a generally "sticky" chemistry administered at high doses. A year prior to the initial announcement of platelet issues a mouse study had found a dose dependent effect whereby phosphorothioate backbone nucleotide therapies lead to platelet activation.
Additionally, possible renal function issues had showed up in the safety signal which might indicate immune activation. As a result The U.S. Food and Drug Administration (FDA) required more intensive monitoring for these Ionis programs, damaging its potential viability. Alnylam also struggled with its Revusiran program where the phase 3 trial showed an "imbalance of mortality in the Revusiran arm" leading to early termination of the program by the data monitoring committee.
Alnylam relied on a GalNAc conjugated siRNA for Revusiran in the treatment of this rare amyloidosis with cardiac complications. Interestingly, multiple reports have discussed siRNA inhibiting vascularization through binding to TLR3 on the surface of blood endothelial cells. This off-target action of siRNA approaches appears to be independent of other factors.
There are two primary variants which can be employed to inhibit the activity of a target RNA with a single stranded approach, gapmers and mixmers. Typically, gapmers are used for inhibiting mRNA whereas mixmers are utilized for miRNA. Gapmers consist of a central DNA sequence flanked by chemically modified sequences to improve stability and affinity of the compound. A gapmer induces activity by an enzyme called RNase-H1 which recognizes duplexes between DNA and RNA for nonspecific cleavage of the RNA strand.
The DNA sequence is ideally 7-10 nucleotides in length in order to induce this activity. However gapmers, especially those with high affinity modifications like LNA are known to induce significant liver toxicities in a RNase dependent fashion. It is hypothesized that the high affinity compounds are binding to long pre-mRNA transcripts in the liver and causing degradation. This may be sequence specific and more work needs to be done to better understand high affinity RNase recruiting therapies for RNA knockdown.
Unlike gapmers, mixmers (in which MGEN utilizes in its antimiR technology) are designed to particularly avoid RNase activity and instead seek to match the target sequence with a complementary base paring, functioning as an antagonist to the miRNA. Mixmers, much as their name implies consists of a mixed sequence of DNA and LNA which avoid a consecutive DNA length of more than 3 nucleotides. Since the activity against the miRNA target is purely dependent on the complementary compound's ability to competitively bind to the miRNA vs. a mRNA, affinity is a very important factor. This, along with stability gives LNA an advantage over other nucleotide chemistries. We, along with MiRagen feel that many of the hepatic toxicity concerns assigned to LNA chemistry are misguided which are informed by the gapmer class as opposed to mixmers.
The other primary toxicity concern we hear from investors is immune activation as markered by complement proteins in serum. Typically this type of toxicity shows up when the immune system detects the RNA therapeutic as a foreign sequence such as what we would find in a virus. However, there aren’t internal mechanisms in the human body to detect heavily synthetic constructs, so there tends to be an inverse relationship between the modification of a given construct and its immunogenicity - LNA/DNA mixmers do not seem to cause an increase in complement protein levels.
Here, we describe the primary antimiR in which Miragen is focused on, but one should keep in mind that this is merely indicative of the broader potential of this platform – targeting the underlying cellular dysfunction. The company's approach takes an indication agnostic view towards the development of miRNA therapies by focusing on biomarkers to lead the pathway forward into new indications.
Miragen's lead product MRG-106 is an inhibitor of mir-155, known to regulate T- and B-cell differentiation, proliferation, and epigenetic state. It is currently being evaluated in a common subtype of cutaneous t-cell lymphoma (CTCL), known as mycosis fungoides (MF). MF functions as a proof-of- concept tumor type due to easy accessibility to the neoplasm for serial biomarkering. MF is also a significant unmet need area given that few single agents can achieve meaningful potency. Combination approaches such as gemcitabine and bexarotene demonstrate a partial response (PR) rate in the 30% range, but there are significant toxicity draw-backs to this approach. The pathogenesis of CTCL has been elusive in the past, but there is a growing body of evidence that the mir-155 pathway drives the proliferation of this disease.
An interim look at MRG-106 data demonstrated that 64% of patients dosed for over a month achieved a PR. In this context, a PR is measured by an improvement in the modified Severity-Weighted Assessment Tool (mSWAT), and requires a score reduction of at least 50%. In CTCL, mSWAT represents the total surface area of the skin impacted by this disease. More notably was the lack of toxicity seen to date despite multiple administrations of MRG-106 ranging from 300-900mg through subcutaneous, 2 hour IV, or a push IV administration.
There has been no observed severe adverse events (defined as grade 3+) so far in the trial, which is quite encouraging given the struggles that other miRNA approaches, such as Regulus (RGLS) or Mirna Therapeutics (fka. MIRN) have faced in the clinic. This lack of toxicity is in spite of significant peak serum levels, particularly with the IV push administration - a far greater exposure than has been tested without other constructs.
This data, along with pre-clinical modeling in primates which demonstrates only brief liver enzyme increases, helps to validate the mixmer hypothesis. Unlike many of the safety results which dogged the RNA sector last year (Ionis, Alnylam) with respect to thrombocytopenia, Miragen did not observe any notable impact on platelet counts or immune inflammation clinically or pre-clinically.
Following a June meeting with the FDA, the company decided to tack on additional arms for adult t-cell leukemia/lymphoma (ATLL), diffuse large b-cell lymphoma (DLBCL), and chronic lymphocytic leukemia (CLL). We believe this is a strong sign that mir-155 is hitting the intended target and that the company has established clear biomarkers to prove mechanistic response. The company has guided for an update to the CTCL at the T-cell Lymphoma Forum on February 2, 2018 as well as updates to the expansion indications at major medical conferences throughout the year.
If these are indeed established, we think there is significant potential for additional indications. Interestingly, Miragen is also considering tackling neurological inflammation. Subsequently, the company has filed for a patent to develop a neural targeted variant of a mir-155 inhibitor MRG-107, against microglial cells in ALS to reduce said neurological inflammation. In another embodiment, mir-155 has been implicated in the activation of STAT3 by inhibiting SOCS1, and its expression appears to be inversely correlated with p53. These markers could apply to breast, cervical, colon, thyroid, pancreatic and lung cancers. In the case of colon cancer, there is a unique hereditary subtype known as Lynch Syndrome that is characterized by the inactivation of DNA mismatch repair (MMR), carried out by over expressed mir-155.
As a result, patients have a significant elevation of mutations leading to an aggressive disease. Up to 80% of all patients with Lynch Syndrome will develop a form of colorectal cancer in their lifetime. This particular disease has is estimated to effect 1 in 440 people globally. However, before the company can transition MRG106 into solid tumors, more work needs to be done on ensuring correct bio-distribution to the tumor mass.
The flip side of the coin is where one would seek to promote the activity of a given miRNA which is down-regulated in diseased tissue through a mimetic. The key for selecting a target in this space is to find miRNAs which are ubiquitously expressed in healthy tissue, as increasing the amount of miRNA in a healthy cell does not appear to cause adverse effects. When miRNAs are at saturation no further activity can be elicited in a cell.
MiRagen is focused on developing a mimetic of mir-29 as an initial proof of concept in this "promiR" space. Mir-29 downregulation appears to have an impact on the deposition of extracellular matrix proteins such as collagen and is implicated broadly in fibrotic disease. The first indication being tested is cutaneous fibrosis in order to validate correct target engagement and its impact on transcripts. The trial was designed to induce fibrosis through two surface incisions on a patient. Miragen treated one wound with MRG201, and one with a placebo. In this simple study, the patients effectively are their own control. MRG201 demonstrated a beneficial impact on scar deposition without any detrimental impact on wound healing in the treated incision. This is being used in the developmental path of MRG201, targeting ocular, pulmonary, and hepatic indications.
It would seem easy to get lost in the sea of possibilities for miRNA targeted compounds, but we feel it’s important to keep focus on key indications where a company can progressively de-risk a therapeutic. In MRG-106 and MRG-201, the company is focused on simple cutaneous trials where it is very simple to validate the activity of the drug candidate.
We feel that this step-wise approach is the best way to tackle such a broad therapeutic space without having to risk putting up significant front-end capital. Miragen is rightfully being cautious in not assuming that toxicities are purely a class effect, as this assumption largely led to many of the unexpected late stage issues for Ionis and Alnylam. Thoroughly screening each new compound built on the mixmer platform is an essential part of the Miragen strategy here.
According to our call with CEO Bill Marshall, the company has expressed a willingness to explore beneficial partnerships in non-core indications that add value and validation to the platform. This could be realized in the early discovery stages such as with Miragen’s Servier deal in ischemia, wherein the company retains rights to the two key markets in the cardiac space (USA and Japan). Servier will be doing the heavy lifting in terms of the developmental process that can potentially follow in-human validation within spaces such as aesthetics for MRG-201, as an example. Therefore, we anticipate additional deals which follow this mold as MiRagen continues to prove the capability of their science, step-by-step.
Balance Sheet as of September 30th, 2017:
Cash and cash equivalents | $ | 42,805 |
Accounts receivable | 635 | |
Prepaid expenses and other current assets | 2,981 | |
Total current assets | 46,421 | |
Property and equipment, net | 610 | |
Other assets | 50 | |
Total assets | $ | 47,081 |
Miragen burns roughly $5.8M per quarter and has $47M + on hand in cash and equivalents. As the company moves its platform forward step-by-step, we anticipate this burn rate to slowly increase. As per the company's "foothold" strategy, we feel Miragen is properly handling its finances, especially when considering its current market cap of around $150M. In our estimation, as per where the company is at now, its current cash-on-hand should provide runway into 2019.
We see Miragen’s key risk factors as:
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Possible uncharacteristic effects of targeting miRNAs since it is a high-level systems approach. In the context of mir-155 inhibition on immune cell viability and for mir-29 on tissue healing. - Limitations of where one can administer antimiRs or promiRs if the linker chemistry required for specific organ targeting is immunogenic or otherwise toxic.
- Potential read-through of the platelet issues that impacted Ionis to all high dose phosphorothioate modified chemistries; however this issue appears to be related to purely unconjugated variants
- Additional upstart competition in the maturing RNA space
Conclusion:
Miragen has a current market cap roughly between $150M and $200M, which we feel provides an attractive risk/reward speculative investment. As with any developmental biotech, we need to closely monitor the risk/reward ratio as the company moves its platform forward while remaining vigilant to the above identified risk factors. With the barrage of acquisitions and mergers currently on-going in biotech, we also expect both the iShares Nasdaq Biotechnology ETF (IBB) and SPDR S&P Biotech ETF (XBI) to continue to receive a strong bid in-between brief periods of consolidation.
