RNA play: Benitec acquires US company Avocel

Brisbane RNA-interference (RNAi) technology specialist Benitec Ltd (ASX: BLT) has made a key strategic play in the US market by acquiring RNAi therapeutics pioneer Avocel Inc of Sunnivale, California.

The deal not only provides a Silicon Valley base for Benitec’s new, wholly owned subsidiary Benitec Inc, it gives the company a potentially lucrative therapeutic product that could reach the clinic as early as next year.

Avocel is a private company, well advanced in developing a double-stranded RNAi (ddRNAi) therapy that could save the lives of millions of people around the world chronically and intractably infected by hepatitis C virus (HCV).

Benitec and Avocel signed a deal on the weekend under which Benitec Ltd will issue 7.6 million shares to Avocel, representing about 9 per cent of its enlarged share capital.

At time of writing, Benitec shares had gained 1 per cent to AUD$1.04.

The merged entity, Benitec Inc, will use Avocel’s existing laboratory and administration facilities in Silicon Valley to step up work on the HCV project.

Benitec owns core patents to ddRNAi technology in partnership with CSIRO, and has exclusive rights to all human therapeutic applications of ddRNAi.

The Avocel acquisition extends Benitec’s IP portfolio. Avocel has an exclusive licence from Stanford University to intellectual property developed by the company’s founder, Professor Mark Kay, relating to in vivo expression of plasmid-delivered ddRNAi constructs directed at multiple gene targets.

Avocel also has a co-exclusive licence relating to the use of adeno-associated viruses (AAVs) – specialised viruses that harmlessly infect liver cells – as delivery systems for ddRNAi “designer” genes designed to inactivate liver viruses like HCV.

Kay, who is Director of the Human Gene Therapy Program in Stanford’s School of Medicine, and Professor in Stanford’s departments of Paediatrics and Genetics, founded Avocel last year to develop RNAi treatments for viral diseases.

The two companies are merging their scientific advisory boards. John Rossi becomes chairman of the new board, with Kay as deputy chairman.

Kay will also serve as a strategic consultant on Benitec’s HCV and related viral programs. Benitec has been working on a ddRNAi therapeutic for HIV-AIDS, as well as treatments for auto-immune diseases, cancer and hepatitis.

Sara Cunningham, Avocel’s co-founder and Vice president of Intellectual Property and Business Development, has been appointed Chief Operating Officer of Benitec Inc.

Benitec’s Director of Research and Technology, Dr Ken Reed, says Avocel has “great expertise” in hepatitis C, while Kay has already run gene-therapy trials on other liver-related diseases, including haemophilia.

Reed says the Avocel acquisition is a “very solid” move for Benitec. “Their multi-targeting technology is a superb complement to our own research on developing ddRNAi constructs for therapeutic use,” Reed said.

He says Benitec is “very excited” about the potential of the HCV therapy. The virus is highly variable, like the HIV virus, with distinctly different strains occurring in different populations around the world.

This genetic variability has frustrated efforts to develop conventional drug therapies directed at single-gene products. Reed says this makes the virus an ideal candidate for a multi-targeted ddRNAi therapy – the therapeutic construct developed by Avocel targets highly conserved DNA sequences in three different HCV genes, making it virtually impossible for the virus to escape.

Avocel scientists recently presented data to a major RNAi symposium showing that its multi-gene targeting technique and viral delivery system have a strong safety profile in a clinical trial in human volunteers.

The World Health Organisation estimates that, worldwide, 170 million are infected worldwide. Acute hepatitis, cirrhosis, liver failure and liver cancer cause by HCV cause 8000 to 10,000 deaths per year in the US alone.

Reed says there is a potentially large market for an HCV therapy in the Pacific region, where recreational drug use, and infections via blood transfusions and blood products before blood-screening tests were developed, resulted in thousands of people developing hepatitis C.

The incidence of HCV infection is rising by between 3 and 4 million a year, and the global market for an effective antiviral therapy is estimated at between $2 billion and $9 billion.