Founder Stories: Christopher Anzalone, CEO of Arrowhead Pharmaceuticals & RNAi Beyond The Liver

Thanks very much, good to be here.

So far, so good.

Yeah, so I didn't start Arrowhead. Arrowhead was an existing company at the time that was publicly traded, so there's my first mistake of many. There were two things that intrigued me about that opportunity. One was that it was a turnaround. It was a broken company with a broken business model, and I thought that was an interesting challenge. It was an unfocused company. It was a nanotechnology holding company at the time, with the idea that it was providing exposure to these nanotechnology opportunities to the public investor. It had a number of majority subsidiaries underneath it, and again, that model didn't work for me, at least, because there were no synergies among those companies, and it was going to be very difficult for any investors to really understand the business. So anyway, it was a turnaround that was interesting to me. But second, and probably more importantly, was that they had a small RNAi company called Calando Pharmaceuticals as one of its subsidiaries. As I looked at what they had, that was interesting, and I thought that was the future. If you could harness RNA interference, and gosh, I think it won the Nobel Prize in 2006 or thereabouts, it was a brand new technology when I joined. But it was potentially so powerful that I thought, look, let's rationalize the business and make it a more traditional biotech company and focus only on that technology. I told them, if you want to do that, I'll do it. If you don't, that's okay too, we can have beers and be friends, but I'm not gonna join the company otherwise. The board was very generous with respect to that sort of freedom, so we decided to do it. I thought I needed a good year of upmarket to fix that business, because it was a capital intensive business that was not well understood. I needed some wind at my back, and I got a quarter. March of 2008 rolls around, Bear Stearns goes belly up, and then all hell breaks loose. So it took longer to rationalize the business than I expected, but we were able to do it still.

Well, first of all, you say short order. In retrospect, when we were living it, it was a long order, big time. It was a difficult time in the world, much less to be at a company that's capital intensive and trying to fix itself. As a quick aside, I remember talking to my father during this whole period, and he said, 'Are you sorry that you made the move? Because you seemed happy at the prior job, and now it's difficult here.' I said, 'Actually, I view the whole meltdown as a gift, because the only way to know how to dig yourself out of the mother of all holes is to dig yourself out of the mother of all holes, and hopefully I don't have to do that again, but I learned how to do it.' So it took a while, but we got there. To your question, what drew us to making those bets? I think that RNAi is the best bet in biotech. That sounds like hyperbole, but I really believed it then and I believe it now. It is a mechanism with surgical precision. If you do it right, you can silence a single gene, and that is extraordinarily powerful. If you are addressing the right gene, there is just nothing with that sort of specificity. That alone is extraordinarily powerful for a number of different disease states. Second, it's non-permanent. People talk about gene therapy, CRISPR, and the like. Those are interesting ideas, but the permanence of that is frightening, at least right now. There's a long way to go between now and being comfortable with changing somebody's genome. The first person that needs to be uncrisperized makes me nervous. The lack of permanence of RNAi is attractive to me. But then you layer on top of that the durability of this. It's a really amazing combination. We have some drugs that show activity for more than six months. It's a pretty neat idea that you can turn off a single gene with a single subcutaneous injection for over six months, and if you choose that gene right, I think that's going to change a lot of lives. Those things made this an opportunity that we just needed to jump on and continue to push forward.

Right. So you mentioned off-target effects, toxicity. That is a single problem, and that problem is delivery. That has been the cornerstone challenge of this industry from the get-go. It took the whole field over a decade to wrestle that to the ground, but I think we finally got there. To take a step back, what we are doing is introducing a small RNA molecule into a certain cell. That RNA molecule, which is a small number of nucleotides, will initiate this natural process of downregulating the expression of a certain gene. That small RNA molecule is inert, it doesn't do anything, it's not toxic. It's perfectly acceptable. What we put on it or put around it can confer that toxicity. When the whole field was struggling with how to deliver these small fragile molecules, we were sticking on those molecules these toxic things. It took us a while to understand how to strip that away and make it a very simple, at least conceptually, process. That process is a small RNA molecule that you chemically modify so it's not going to be degraded. If you do that correctly, you can do that in a reasonably non-toxic way. Then you tether to that a targeting ligand, some molecule that will naturally bind a certain cell type and be absorbed by that cell type. If you can do all those things, then you can get your molecule into the right cell at the right time. It took a long time to really understand that science, but we're there. I think of innovation in two large buckets: science and engineering. Science is harder than engineering in my mind because it's unknown. Engineering is once you have something that works, you optimize it. We are absolutely in the engineering phase of RNAi, at least as it relates to delivery to cells. So those are the challenges around toxicity that you mentioned. The ifs that I mentioned are really nobilities. If we turn off this target gene, what will happen? In a lot of situations, that is a knowable thing. We talk about genetically validated targets a lot. One of the things we mean by that is understanding genes that are not expressed in certain humans. If you can study those people, you can understand if there is a negative phenotype associated with the lack of expression of that one gene. If you do it right and you can find these genetically validated targets, you have a good idea about negative things that could happen if you turn that off. If you can get beyond that and say, 'Yes, if you turn off that gene, a good thing will happen and bad things look like they will not happen,' then how do you make sure that you're not knocking down other genes? Because other genes could have similar sequences. That is generally a knowable thing as well because the human genome is sequenced. It is a known unknown, if you will, to paraphrase Donald Rumsfeld. That's also what's really attractive about this field: the number of known unknowns is relatively high. I think we can go into clinical studies relatively de-risked. With a small molecule, you don't know how it's going to interact with other cells or other organ systems. You go into clinical studies not knowing a lot, and that's why drugs fail in clinical trials. With RNA interference, I think you go in knowing a heck of a lot more.

Right. So first of all, let me circle back to your question, but first of all, we've got other liver-directed drugs. We are going to have Hepatitis B and Alpha-1 antitrypsin deficiency related liver disease, but we have other ones as well that we'll talk about in a second. The reason that the liver was a good initial organ target was that it's a clearance organ. It wants to soak up things from the blood. It is relatively straightforward to bring molecules into hepatocytes because that's one of their jobs. The field, not just us, has identified good targeting ligands, good molecules that are taken up rapidly by hepatocytes. You combine those two things, and hepatocytes are really tailor-made for our RNAi. The other piece of good news is that there are an awful lot of good targets you can go after. The liver makes a lot of things, so there are a lot of opportunities to develop really powerful medicines if you can only focus on the liver. That was clearly an important space for us. But we thought more broadly, to really extract all the value from RNA interference and to really revolutionize medicine, we needed to bring RNAi outside the liver because there are other diseases that needed to be addressed. That was our thinking on this. Now back to our compounds that are liver focused. As you mentioned, we have one that's partnered with Johnson & Johnson against Hepatitis B infection. That seemed to be an important opportunity because it is a great unmet medical need. There may be 300 to 350 million people on the planet with chronic Hepatitis B infection, and there's no cure. We thought we could play there, and so far, I think we've got a powerful medicine that could lead to functional cures. We'll see. The other one you mentioned was Alpha-1 antitrypsin deficiency related liver disease. This also was a strong unmet medical need. It's a much smaller market, of course, but the biology of that seemed clear. We know that in these patients, there is a protein that is produced that can cause liver disease in a subpopulation of those people. We thought we could turn that off, and we're in the process of showing that right now. We think that's important. But beyond those two, we also have a cardiovascular program that we partnered with Amgen, something called Lp(a). It is a genetically validated target that appears in some individuals. Elevated levels of this are an independent risk factor for cardiovascular disease, so we're excited about their progress there. Internally, we've got two cardiometabolic programs. One called ARO-APOC3 is a triglyceride lowering drug. We showed recently that we can lower triglycerides by 95% in patients. It's just stunning, and there's nothing out there that can do that, I don't think. The other one is called ARO-ANG3, which looks like it can lower triglycerides as well as lower LDL, or so-called bad cholesterol, and will lower that LDL on top of the lowering that you see with statins and other modalities. In patients, we've seen 85% reduction of triglycerides with ARO-ANG3 and 40% reduction of LDL, so we think that's a really powerful cardiometabolic medicine as well. Then you go to MASH. This is a disease of increasing focus with big pharma, and we have a genetically validated target that we're going after called HSD17B13. The drug is ARO-HSD. We are treating healthy volunteers and patients right now. What am I forgetting? I guess those are our liver-directed medicines right now.

Yeah, that's a good question. We've spent a lot of time on manufacturing internally. We have redundant suppliers, and we also use CMOs to manufacture for us. But we really wanted to be able to control that more than we were in the past. We have the ability now to make GMP grade material, and we'll scale that up. A hallmark of our company has been speed, and that was one area where we saw that we could really shave months off of program time schedules by controlling our own manufacturing, at least in the early stages.

Sure. Let's look at that chronologically. We started looking at solid tumor delivery some time ago, years ago, for a couple reasons. First, we thought that could be a potential next cell type that we can go after. But also, we viewed that as a test kitchen. We learned an awful lot about how to bring molecules into cells that were not hepatocytes via that program. Many years later, we came up with this platform that we think is a franchise unto itself that allows us to deliver to solid tumors. Our first program there is against renal cell carcinoma, and we are in a Phase 1/2 study right now with that. I think that's important because it's potentially important medicine for renal cell carcinoma, and I think it will be one of those really uncommon oncology drugs that doesn't make you sick, so it should be combinable with a number of other chemotherapeutics. We're excited about that. But it's also the sharpening spear. Once we show that we are knocking down the target gene, in this case HIF-2 alpha, in these solid tumors, then it is a proven concept that we can get into solid tumors, and then we can rapidly blow out that pipeline and go after other tumor types and other gene targets. So certainly solid tumors is an important one. But what has moved even faster than that is lung. We started working on delivering to pulmonary epithelial cells several years ago, and we've gotten really good at that. We have one compound right now called ARO-ENaC in the clinic. We'll be dosing patients shortly, I believe. My hope is that over the next month or so, we can start dosing patients. The initial indication there is cystic fibrosis. We are going after a validated target that big pharma has tried to go after in the past but could not for various reasons. We think RNAi is uniquely suited for this. Importantly, it's a nebulized inhalation, so that's a big step forward for us. We think it's a powerful medicine for cystic fibrosis. If you look at that landscape, Vertex has done a great job with CF, but there are large pockets of patients that are not served by existing drugs, and we think that we can help them quite quickly. Then we'll see how we can expand beyond that. So ARO-ENaC, or the CF program, as with our solid tumor program, is a powerful medicine for the target population, but we think it's also a good proof of concept. Once we show that we are doing what we intend to do in the lung, we can rapidly expand that pipeline. The lung is a target-rich organ. We have already said publicly that we expect to file to begin clinical studies for our next lung program by the very end of this year. We haven't said what the gene target is, but we have said it's against COPD. I think that's near term. Then next year, we'll have one or maybe two additional lung drugs in the clinic. I think that's a very important set of programs for us and for the field, because it's a target-rich environment. There are an awful lot of indications that we can go after using RNAi that are undruggable by other mechanisms. We're excited about that. We also have said that we are targeting skeletal muscle. I expect that we'll be in the clinic there the first half of next year. We haven't set the target or the indication, but we view that as also important. By the middle of next year, we'll be in hepatocytes, lung, solid tumor, and muscle cells with four different cell types. Then next year, maybe towards the end of the year, there's a reasonable chance that we could be at our next cell type. We are pushing this technology forward as quickly as we can into as many new areas as we can.

Yeah, well, the G-forces will kill you. We're moving so quickly. But I tell you, from a fluffy standpoint, from an emotional standpoint, this is where you want to be. I think the people here, and I certainly speak for myself, but I think the other people at Arrowhead have a really good reason to get up in the morning because this is exciting science. I think we are pushing medicine quickly, and there will be literally hundreds of thousands and millions of people whose lives will be affected by the work people are doing at Arrowhead today. Because we're so fast, people can see this. People can see the movement of developing new signs and then how that fits into people's lives in a pretty short period of time. It's extraordinarily exciting, and I tell you, it's a gift that we all appreciate. It's unique that we get to do this. Anyway, the fluffy aside, the nuts and bolts are complicated. It's not one size fits all. What we have going for us is that they all leverage RNA interference. We can be experts in RNA interference and the chemistry of RNA interference. That is scalable and applicable to everything we're going after. The molecule doesn't care what gene it's knocking down. It can be a gene in pulmonary epithelial cells or it can be an Alpha-1 antitrypsin deficiency target in hepatocytes. It doesn't matter. That is scalable. The challenge here is scaling our ability to get into these new cell types, understanding new targeting ligands, and understanding PK, how to expand the PK in these new molecules to have enough interaction with cell surface receptors in new cell types. That's all complicated and not one size fits all. You've got to be pretty good in other areas. That's a challenge, and having enough biology expertise in these new areas to ask the right questions. But I'll tell you, and this is going to sound a little bit intellectual, but bear with me. I think it's helpful for us not to be deep incumbents in some of the areas we're going after. If you look at who drives true innovation, who drives paradigm shifts, it's infrequently the deep incumbents because they're mired in dogma. It is the outsiders who ask dumb questions and who can approach a new area with almost childlike naivete, to say, 'Wouldn't it be cool if you could do X? I wonder if we can do Y.' It is very often the newcomers who can ask those fresh questions. It is my hope that by expanding our reach into these new areas, we can continue to ask those really probing, innovative questions.

Sure. So let me start with we try to make life as easy for ourselves as we can. One of the ways we do that is to focus on well-validated targets. There are more than two ways, but I think the way I think of it, there are two primary ways you can address these sorts of things. One is to be very deep in the biology of a disease and push that disease biology forward and find new ways to address that disease. That's important and good, but it's hard and requires years of experience in a certain disease area. The second way is to stand on the shoulders of that first group of people and go after these well-validated targets. You're not having to invent new biology. That's where we start. If you look at everything we do, we have not invented new gene targets. We've gone after those that have been studied for quite some time but have not been able to be addressed in a therapeutic manner. We view that as a good model for us. At some point, you might run out of those, in which case you've got to roll up your sleeves and do more basic biology work. But for now, we can focus on those. I tell you, that's important for a few reasons. It de-risks these programs, so we go into the clinic with a level of risk that is less than most small molecules, because we have pretty good confidence that RNAi is a reliable process, and we also have a good understanding that the gene targets we're going after are important for a certain disease process. It's certainly helpful from that standpoint and also allows us to move a bit more quickly. We can stand on the shoulders of these biologists who have done good important work in these areas and then create these medicines pretty quickly. What we've shown is we've gone from idea to the clinic in 12 to 18 months in many of our at least hepatocyte-targeted programs, and that's unheard of in the field. It's just unheard of. And look, it's important for a company clearly, but we always think about this from the patient's perspective. This is important for patients because if you are a patient in need of these medicines, every day that they don't have access to medicines is a bad day for them. We tell our people all the time that those patients are our bosses, and think about what they need, and that drives us.

Sure. The world has come around to RNAi. It is well accepted now that this is a validated therapeutic modality that can do things that other modalities can't do. It's not the right for all diseases, but there are a lot of indications where this is a powerful modality. People get that now. You talk about Novartis getting back into the space, and people have asked, 'Do you think Novartis is foolish about this?' The answer is absolutely not. I think that's an example of our industry working the way it should work. Small biotech companies are just better and faster at innovation than big pharma. I think big pharma would even accept that. The world should rely on us to do that innovation. Big pharma is really good at later stage large clinical studies and obviously quite good at distributing and manufacturing drugs. They should focus on those things. This is a good example of that. The Medicines Company pushed that drug forward, and Novartis is going to do what they do well and bring it to the masses. I think it's a really nice case study of how biopharma should work.

Yeah, you know, I don't know. COVID be damned, look, I think this is a very exciting time in RNA interference. It's finally validated. I think we are now just starting the process of bringing this into the world for various diseases. I think we are in the first inning, to mix my metaphors, the first inning of this game. I think you'll see over the next several years dozens of really powerful medicines that will be coming to patients. I think it's really exciting. More broadly, look, I think it's an exciting time to be in biopharma. There are an awful lot of exciting new technologies that are moving, by historical standards, quite quickly. It's a great time to be in this field, and I'm proud to be in this field. We're doing good things. Depending upon the time of year and what politicians are talking about, we can sometimes get a bad rap, but I think that people need to stay focused on what our priorities are here. It is to make important medicines that will affect people's lives, and I think we're good at doing that.

It's a pleasure. Thanks very much, Matt.