Arcturus's Differentiated RNA Technology Faces First Clinical Test In 2017
Executive Summary
Emerging Company Profile: San Diego-based Arcturus Therapeutics has developed technology for the targeted delivery of RNA therapeutics, which Johnson & Johnson's Janssen subsidiary will evaluate for the first time in humans in a clinical trial starting as early as this year for the partners' hepatitis B drug candidate.
Arcturus Therapeutics Inc. has funded its platform for the targeted delivery of therapeutic RNAs through a combination of private equity and collaboration fees, and may see its platform tested in humans for the first time later this year by the company's partner Janssen Pharmaceuticals Inc.
Arcturus has a multi-faceted relationship with Janssen and its parent company Johnson & Johnson, which began when the firm was a tenant at the big pharma's JLabs incubator in San Diego – its headquarters until 2014. Since signing a deal with Janssen, Arcturus has inked agreements with Ultragenyx Pharmaceutical Inc. and Takeda Pharmaceutical Co. Ltd. while using its $13m in private equity plus partnership fees – deals potentially worth nearly $2bn in upfront and potential milestone payments – to advance the company's own therapeutics based on its proprietary UNA chemistry and LUNAR delivery platforms.
Arcturus Therapeutics
Location: San Diego, California
R&D Focus: Targeted delivery of RNA therapeutics
Disease Areas: Rare diseases, including OTC deficiency and cystic fibrosis
Founding Date: 2013
Founders: President and CEO Joseph E. Payne and Chief Scientific Officer and Chief Operating Officer Padmanabh Chivukula
Employees: 50
Financing To Date: $13m in seed and Series A capital from angel investors; fees from partnership deals that could total nearly $2bn
Investors: Private investors, high net worth individuals
Targeted Delivery, Better Interactions
The Lipid-enabled and Unlocked Nucleomonomer Agent modified RNA (LUNAR) platform is a nanoparticle-based technology that allows for targeted delivery of all types of RNA – including small interfering RNA (siRNA), messenger RNA (mRNA), microRNA and antisense RNA as well as mixtures of RNA – to hepatocytes, lung epithelial cells and stellate cells in the liver.
The unlocked nucleomonomer agent (UNA) Oligomer technology is a chemistry platform that's used to target any gene in the human genome and genes of other species, such as viruses, for therapeutic purposes.
LUNAR, the lipid-based delivery system, improves upon 30-year-old technology that used liposome technology that was used to deliver RNA. Older liposome technology added toxicity to RNA therapeutics, because they were permanently charged and unstable, but Arcturus's biodegradable LUNAR delivery vehicles are charged "only when we want them to be," President and CEO Joe Payne explained.
In regard to the company's other platform, Payne noted that doubled-stranded RNA is like a twisty, rigid cord, but UNA-enabled therapeutics don't have a ribose ring, so the RNA therapeutics are "unlocked" and flexible, providing for improved pharmaceutical characteristics once inside the targeted cells.
"If you hug your mother with arms outstretched, it's not a good interaction, but if your arms bend at the elbows, it’s a better interaction," Payne said. "You can inject RNA into the blood and it’s destroyed, but if you put UNAs on the end of the RNA, the body doesn’t recognize it, so it doesn’t get chewed up in the blood stream. By incorporating flexibility into our RNA drugs, it’s softer, less immunogenic and more potent. It's safer, it lasts longer and it's the reason we’ve done multiple deals with this chemistry."
Applications for the company's technology outside of traditional RNA therapeutics include CRISPR gene editing, which seeks to edit, cut or replace deficient RNA; chimeric antigen receptor T cell (CAR-T) therapies used in immuno-oncology; and antibody therapeutics.
"We could inject messenger RNA that’s delivered to your diseased cell and your body naturally manufactures the antibodies, rather than inject the antibody itself," Payne said.
Seven Active Programs, Including Four Collaborations
Arcturus has seven active programs under evaluation in early research and preclinical stages, including three in-house programs and four that are fully funded by the company's collaborators. The three internal programs, which could enter the clinic in 2018, are a research-stage cystic fibrosis project and preclinical rare disease assets, one of which is for the treatment of OTC deficiency, a urea cycle disorder.
The partnered programs include Janssen's hepatitis B asset, a Takeda program for nonalcoholic steatohepatitis (NASH) and two undisclosed rare disease programs funded by Ultragenyx.
Payne noted that development of the wholly-owned programs are funded by money from the company's partnerships, which have included upfront payments and milestone fees as well as royalties if any of those assets become approved drugs. All told, the company could earn nearly $2bn under the agreements, but that total assumes all programs under the collaborations will be successful.
"If we are successful in earning additional milestones or if we add some deals – because we may be adding some more – then we can maybe accelerate our internal programs or move forward with some new ones," Payne said.
The company's most recent partnership agreement was executed with Takeda in December to develop RNA-based therapeutics for NASH and potentially other gastrointestinal diseases. Financial terms were not disclosed.
Previously, Arcturus and Ultragenyx signed a deal in October 2015 to discover and develop mRNA therapeutics addressing at least two and as many as 10 rare disease targets. The Novato, California-based rare disease specialist paid $10m up front and agreed to pay Arcturus up to $156m in milestone fees per target as well as reimbursement for research and development expenses and royalties.
The Janssen agreement signed in June 2015 covers the recently-revealed hepatitis B program. Financial specifics also were not disclosed, but the J&J subsidiary made an upfront payment, committed R&D capital to the collaboration and will pay various milestone fees and royalties. Janssen will fund all development and commercialization costs. (Also see "Deals Shaping The Medical Industry, July 2015" - In Vivo, 10 Jul, 2015.)
"To succeed in the RNA field, you need chemistry technology and delivery technology to deliver therapies safely," Payne said. "It's one of the key reasons Janssen, Takeda and Ultragenyx have done deals with us, because our technology effectively delivers complicated, sophisticated or mixtures of RNA to hepatocytes, lung epithelial cells and stellate cells."
Partnerships Fuel Growth
Arcturus had 45 employees working on its in-house and external programs as of December and at that time the company expected to hire a dozen additional employees in 2017; by March the head count had risen to 50 people.
The company has no plans for a near term fundraising event to fund its growth beyond its existing private equity and any known or future partnership fees and milestone payments.
"We've raised about $13m in equity throughout the first four years and we've raised much more than that with non-dilutive funding," Payne said, including the company's $1.3m seed round in 2013 and other private equity raised in the years since. (Also see "BioNotebook: Seragon, Arcturus, Seattle Genetics, Cytos, CIRM" - Scrip, 21 Oct, 2013.)
"As of now, we're independently funding the company through business development, but we're open to hearing from investors that would like to aggressively grow the company," he added.
Editor's Note: This article was updated on March 9, 2017, because the company's private equity was mischaracterized as venture capital rather than angel investment, and to correct the number of programs in active development.
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