Novartis slams the brakes on once-ambitious RNAi development efforts

Novartis ($NVS) is shuttering a large part of its once-ambitious RNAi research efforts in Boston, FierceBiotech has learned. The pharma giant, which has extensive R&D operations in the Boston area, confirmed the decision, saying that the lingering problems associated with delivering these therapies tied to the small number of relevant targets they could shoot for drove the move. 

"We have decided to significantly reduce our internal drug discovery efforts in RNA therapeutics," Novartis told FierceBiotech in a statement. "This decision was driven by ongoing challenges with formulation and delivery and the reality that the current range of medically relevant targets where siRNA may be used is quite narrow.  In the future we will have a small group working in this field and look for partnering opportunities."

A total of 26 Novartis staffers were working on the RNAi program full time, the spokesperson added. The program grew out of a large partnership with Alnylam ($ALNY), one of the leaders in the field. The company now is working on reassigning staffers and will try to keep "job cuts as low as possible."

Novartis has been laying off thousands of people around the globe as it restructures and looks to streamline its R&D operations. That move has benefited Boston, though, one of a handful of R&D hubs for the pharma giant. And Novartis says the decision to chop RNAi is not tied to the overall restructuring.

Novartis' decision to drop most of its RNAi efforts comes several years after Roche ($RHHBY) and others had bowed out as well, unhappy with the delivery tech available and looking at a long and expensive clinical journey before any products could be developed.

It was Novartis' decision to nix an extension of its collaboration with Alnylam back in 2010 that initially sent shivers down the spines of researchers and companies working in the field. At the time, Novartis kept 31 targets from the work it did with Alnylam on RNAi and remained a major investor in the biotech. Merck ($MRK) recently sold off its RNAi work to Alnylam for a fraction of what it had paid to get into the field.

Over the past year, though, Alnylam had been making progress in the clinic as well as with the collaboration end of the business. Sanofi ($SNY) paid $700 million to invest in Alnylam and its RNAi pipeline. The news today nevertheless represents another setback for Alnylam and the field.

Novartis still owns close to 1.7 million shares of the biotech, says a spokesperson for Alnylam. But Novartis's decision to wind down its work in RNA won't affect the company, she adds.

"There is absolutely no impact to us based on Novartis' decision to scale down their efforts in this area," notes Alnylam's spokesperson in an emailed statement to FierceBiotech. "Our recent clinical findings give us great confidence and encouragement and we remain very excited about the opportunities we are pursuing in rare disease, as well as expanding our longer term views into other disease areas."

Alnylam's shares dipped about 4% on the news from Novartis. Tekmira ($TKMR), which ended up licensing its RNAi delivery tech to Alnylam after a bitter legal dispute, saw its share price plunge 19% today.

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