Dicerna: Competitive GalXC RNAi Platform + Partnerships Makes Share Price Gain Likely

Feb. 18, 2020 10:26 PM ETNovo Nordisk A/S (NVO)3 Comments

Summary

  • Dicerna is an RNA-interference / gene silencing drug developer with a proprietary platform GalXC RNAi.
  • The company is developing 2 wholly-owned drug candidates for the treatment of primary hyperoxaluria and alpha-1 antitrypsin.
  • Dicerna also has collaboration agreements in place with Roche, Eli Lilly, Alexion, Bohringer Ingelheim and Novo Nordisk to develop and progress candidates towards commercialisation targeting a range of indications.
  • With sufficient cash reserves to continue operations beyond 2021 Dicerna is on course to make significant progress towards commercialising a drug this year.
  • Unique opt-in co-development strategy is an interesting point of difference to sector rivals. A good year will be steady progress, a stellar year delivering best-in-class trial data.

Investment Thesis

I have been looking into the biotech sector for RNA interference ("RNAi") and in this article I am focusing on Dicerna Pharmaceuticals (DRNA). Despite competing in a crowded field, the company's recent collaboration deals are impressive and there is reason to believe the GalXC platform can deliver a commercialised drug that can take market share from rival treatments. As such I feel the current share price somewhat undervalues Dicerna.

There are a cluster of companies, including Arrowhead (ARWR), Alnylam (ALNY), Ionis (IONS) and Moderna (MRNA) developing different varieties of gene-silencing drug candidates using proprietary technology platforms to identify and develop drugs, either themselves or by making structured deals with big-pharma companies involving milestone payments that are triggered by investigational new drug ("IND") or clinical trial application ("CTA") submissions, and progression through clinical trials, and revenue sharing agreements (usually in the mid-to-late-teens) of global net sales subsequent to approval for commercialisation.

It has taken more than a decade (since the Nobel prize-winning science behind RNAi gene silencing using strands of RNA first came to light) for RNAi targeted therapies to have achieved FDA approval for commercialisation due to the complexity of delivering these unstable molecules to their target organs and cells, whilst preventing the body's own immune system from destroying them before they are able to carry out their work of preventing messenger RNA ("mRNA") from passing on its instructions to manufacture disease-causing proteins.

Dicerna gets it name from the DICE enzyme which unwinds the double-stranded RNA molecule before passing it to the RNA induced silencing complex ("RISC") from where it is passed to the mRNA, which is cleaved and prevented from continuing the process of manufacturing proteins.

Extract from Dicerna guide to how its GalXC molecules work. Source: Dicerna website.

Dicerna's proprietary GalXC platform develops molecules that the

This article was written by

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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