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

Welcome to another episode of The Business of Biotech, Summer Executive Sessions Edition. I'm Matt Piller, Chief Editor at Bioprocess Online and your host for this week's up close and personal conversation with Dr. Christopher Anzalone, President, CEO, and Director at Arrowhead Pharmaceuticals. Dr. Anzalone was an NIH-supported postdoctoral fellow in reproductive endocrinology at the Smithsonian Institution's Conservation and Research Center prior to managing private equity for Galloway Partners and prior to the founding of his own nanobiotechnology private equity firm, The Bennett Group, in 2005. He joined Arrowhead, uh, which boasts a deep pipeline of therapies developed to silence the genes that cause intractable diseases using RNA chemistry back in 2007. Today we're going to learn a little bit more about Dr. Anzalone, his company, and why they're both committed to taking RNA interference beyond the liver. Dr. Anzalone, welcome to the show.

Thanks very much, good to be here.

Did I get all that right? Did I make any mistakes in your, uh, your brief intro there?

So far so good.

All right, good, good. So I want to start at a high level, uh, and learn a little bit about you and, uh, kind of what led into the founding of Arrowhead. So I'll start with a very simple question. When you made that move, what was the inspiration behind making the move from private equity and taking the reins at Arrowhead?

Yeah, so I didn't start Arrowhead. Arrowhead was an existing company at the time, it was publicly traded.

So there's my first mistake of many. Correct me.

It was an existing company. There were two things that 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. And so it had a number of majority-owned subsidiaries underneath it. Again, that model didn't seem to work, to 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. Right? So anyway, so it was a turnaround. That was interesting to me. But second, and probably more importantly, was that they had a small RNAi company called Colando Pharmaceuticals as one of its subsidiaries. And 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. And so it was a brand new technology when I joined. But it was potentially so powerful that I thought, look, let's— I would be interested in taking the reins here if we could rationalize the business and make it a more traditional biotech company and focus only on that technology. And so I told them, look, you know, 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 going to join the company otherwise. And the board was very generous with respect to that sort of freedom. And so we decided to do it. And I thought I needed a good year of upmarket to fix that business because, you know, it was a it was a capital-intensive business that was not well understood. And so I needed some, I thought I needed some wind at my back, and I got a quarter. March of 2008 rolls around and 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.

Yeah, and in relatively short order. I mean, you talk about the recession impacting things, you talk about taking a small element of the company in its RNA RNAi technology and kind of focusing on that. And like I said, within short order, by 2011, your company really, you know, put itself out there by acquiring Roche's RNAi assets. And then just a few years later, buying all of Novartis's RNAi assets, which by the way, there's a great story. My colleague, Rob Wright, the chief editor at Life Science Leader, wrote a really great story on your company that kind of walked through those purchases. I believe it was in our April 2020 issue of Life Science Leader, so check that out. But as I said, you really, you know, took something small, had some headwinds right off the bat, but then made some very significant investments, kind of stuck the company's neck out to acquire that technology. What is it about this technology that makes you so confident and willing to to make those moves?

Well, first of all, so you say short order, short order for you in retrospect, you know, when we were living it, it was long order, you know, big time, you know, it was a difficult time, you know, in the world, much less, you know, to be at a company that's capital intensive and trying to fix itself. It's funny, as a quick aside, I remember I was talking to my father, you know, 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. And 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 anyway, so it took a while, but we got there. So to your question, you know, what drew us to making those bets. I think that RNAi is the best bet in biotech, and that sounds like hyperbole, but I really, I believed it then, I believe it now. You know, it is a mechanism with surgical precision. You know, if you do it right, you can silence a single gene, and that is extraordinarily powerful. Again, if you do it right and if you are addressing the right gene, there is just nothing with that sort of specificity. So that alone is extraordinarily powerful for a number of different disease states. Second, it's non-permanent. People talk about gene therapy, this CRISPR and the like, and those are— that's an interesting idea, but the permanence of that is frightening, at least right now. There's a long way to go, I think, just from my perspective, between now and being comfortable with changing somebody's genome, for goodness sakes. The first person that needs to be un-CRISPRized makes me nervous. And so 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, you know, activity for more than 6 months. And so it's a pretty neat idea that you can turn off a single gene, you know, with a single subcutaneous injection for over 6 months. And again, if you choose that gene right, I think that's gonna change a lot of lives. And so, you know, those things made this an opportunity that we just needed to jump on. And we need to continue to push forward, I think. Yeah.

Yeah, and in that response, you said, you know, if it's done right, if you choose the gene properly. I want to ask a question about some of those ifs that sort of predates my immersion in the space, so forgive me. But I read, you know, in the earlier days of RNAi therapy, there were some off-target effect and toxicity and delivery method challenges that were, perhaps difficult to overcome at the time. Maybe that alludes to some of those ifs. Can you kind of walk us through how Arrowhead has tackled some of those challenges?

Right. So the ifs that I talk about there don't relate to that, but—

Oh, okay.

But I'll talk about both those. So first, so you mentioned the off-target effects, toxicity, that is a single problem, and that problem is delivery. That has been the cornerstone, the challenge of this industry from the get-go. And it took us in the field, the whole field, over a decade to wrestle that to the ground, but I think we've finally gotten there. So just to take a step back, what we are doing is we're introducing a small RNA molecule into a certain cell, right? And that RNA molecule, which is a small number of all the nucleotides, will initiate this natural process of downregulating the expression of a certain gene, right? So that small RNA molecule is inert. It doesn't do anything. You know, it's not toxic. It's perfectly acceptable. That which we put on it or put around it, you know, can confer that toxicity. And so when the whole field was struggling with how do we deliver these small, fragile molecules, we were sticking on those molecules, these toxic things. And so it took us a while to understand how to just strip that away and make it a very simple, at least conceptually, process. And that process is a small RNA molecule that you chemically modify, so it's not gonna be degraded. If you do that correctly, you can do that in a reasonably non-toxic way. And then you tether to that, a targeting ligand, you know, 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. And again, it took a long time to really understand that science, but we're there. And, you know, I think of innovation in sort of two large buckets, right? There's science and there's 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 liver cells. So, you know, those are the challenges around toxicity that you mentioned and such. The ifs that I mentioned are really knowable ifs. You know, these are, you know, 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, and one of the things we mean by that is understanding genes that are not expressed in certain humans, right? And 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. So, you know, if you do it right and if you can find these genetically validated targets, you have a good idea about negative things that could happen if you turn that off. And so if you can get beyond that and say, okay, yes, if you turn off that gene, a good thing will happen and bad things look like will not happen. Now, how do you make sure that you're not knocking down other genes, right? Because, you know, other genes could have have similar sequences. And that is generally a knowable thing as well, because the human genome is sequenced. And so, you know, we can— it is a known unknown, if you will, to paraphrase Donald Rumsfeld. And that's also what's really attractive about this field is that the number of known unknowns is relatively high. And so I think we can go into clinical studies relatively de-risked. You know, a small molecule— to know a small molecule is to know a small molecule. You don't know, you know, how it's going to interact with other cells. You don't know how it's going to interact with other organ systems and such. And so you go into clinical studies not knowing a lot, and that's why drugs fail in clinical trials. With RNA interference, I think that you go in knowing a heck of a lot more.

Yeah, okay. The Business of Biotech is produced by Bioprocess Online in partnership with Cytea If you're the leader of an early to clinical stage biotech, you need to check out the resources that are hand-curated for people like you at scitivalifesciences.com/emergingbiotech. The Knowledge Center there is chock-full of articles, webinars, videos, podcasts, and other content that's ultra-focused on helping new and emerging biotechs chart the course to the clinic and beyond. Check it out. Cytevalifesciences.com/emergingbiotech. I want to shift gears here a little bit and get into the liver. Uh, your recent focus has been on taking RNAi beyond the liver, but before we discuss your vision for new indications, a couple questions. Let's talk about where the therapy stands with your initial targets, which I believe are the hepatitis B virus and alpha-1 liver disease, and maybe give us a little color on why that was sort of the genesis area for RNAi technology.

Right, so first of all, and let me circle back to your question, but first of all, we've got other liver-directed drugs. We are going after hepatitis B and alpha-1 antitrypsin deficiency-related liver disease, We have other ones as well that we'll talk about in a second. So the reason that the liver was a good initial organ target was that it's a clearance organ, right? So, you know, it wants to soak up things from the blood. And so it is, relatively speaking, straightforward to bring in molecules into, not all liver cells, but hepatocytes, you know, these, because that's one of their jobs. So that's A. B, the field, not just us, but the field has identified good targeting ligands, good molecules that are taken up rapidly by hepatocytes. And so, you combine those two things, and hepatocytes are really tailor-made for RNAi. That's the good news. The other piece of good news there is that there are an awful lot of good targets you can go after. The liver makes a lot of things. And so there are a lot of opportunities to develop really powerful medicines if you can only focus on the liver. And so 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, not to put too fine a point on it, we needed to bring RNAi outside the liver because there are other diseases that needed to be addressed. So 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 for us because it is a great unmet medical need. There may be 300 to 350 million people on the planet with chronic hepatitis B infection. There's no cure, and we thought that we could play there. And so far, so far, you know, I think that we've got a, you know, a powerful medicine that could lead to functional cures. You know, we'll see. The other one you mentioned was alpha-1 antitrypsin deficiency-related liver disease. This also was, we think, a strong unmet medical need. It's a much smaller market, of course, but the biology of that seemed clear. You know, we know that in these patients there is a protein that is produced that can cause liver disease in a subpopulation of those people, and 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, you know, look, we also have a program, a cardiovascular program that we partnered with Amgen against something called Lp(a). It is a genetically validated target that appears in some individuals. It appears that elevated levels of this are an independent risk factor of cardiovascular disease., and so we're excited about their progress there. Internally, we've got two cardiometabolic programs, one called ARO APOC3, that is a triglyceride-lowering drug, and we showed recently that we can lower triglycerides by 95% in patients. You know, 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, that looks like it can lower triglycerides as well as lower LDL, or so-called bad cholesterol. And it will lower that LDL on top of the lowering that you see with statins and, and other modalities. Again, in patients we've seen, you know, 85% reduction of triglycerides with ARO-ANG3 and 40% reduction of LDL. So we think that's a really powerful cardiometabolic medicine as well. You then go to, to NASH. You know, this is, this is, you know, a disease of, of, of increasing focus, you know, with big pharma and we have a genetically validated target that we're going after called HSD. The drug is Arrow-HSD. We are treating healthy volunteers and patients right now. What am I forgetting? I guess, so those are our liver-directed medicines right now.

Yeah, yeah. So, and before we kind of shift gears into other indications, have there been any particular process or manufacturing challenges leading up to your journey into phase these two that, I guess, posed a particular conundrum for you that needed to be overcome?

Yeah, that's a good question. You know, we've spent a lot of time on manufacturing internally. You know, we have redundant suppliers, and so we also use CMOs to manufacture for us, but we really wanted to, you know, to be able to control that more than we were in the past, and so 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 that we saw that we could really shave months off of program time schedules by controlling our own manufacturing, at least in the early stages.

Yeah, good. So yeah, let's move beyond the liver then. What indications are you targeting beyond liver disease, and what's the scientific rationale behind their prioritization? Like, how did you go about choosing these targets?

Sure. So, so let's look at that chronologically, I guess. We started looking at, at solid tumor delivery some time ago, years ago, for a couple of reasons. You know, first, we thought that that could be, you know, a potential next, 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. So many years later, we came up with this platform, 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 that's important because I think it's potentially important medicine for renal cell carcinoma, and I think will be one of those really uncommon oncology drugs that doesn't make you sick, and so should be combinable with a number of other chemotherapeutics. And so we're excited about that, but it's also the sharp end of a spear. I think once we show that we are knocking down the target gene, in this case, HIF-2 alpha, in these solid tumors, then it is proof of concept that we can get into solid tumors, and then we can rapidly, you know, blow out that pipeline and go after other tumor types, go after, you know, other gene targets. So certainly solid tumors is an important one, but what has moved even faster than that is lung. You know, 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 aroenac, in the clinic, and 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, and importantly, it's administered via inhalation, and so that's a big step forward for us. We think it's a powerful medicine for cystic fibrosis. And you look at that landscape and you say, okay, well, Vertex has done a great job with CF, and they certainly have, but there are large pockets of patients that are not served by existing drugs, and we think that we can help them quite quickly. And then we'll see how we expand beyond that. So, you know, aroenac, the CF program, as with our solid tumor program, is, we think, a powerful medicine for the target population of going after cystic fibrosis patients. 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. And the lung is a target-rich organ. We've said publicly that we expect to file to begin clinical studies for our next lung program, you know, by the very end of this year. We haven't said what target is, we haven't said what the gene target is. We have said it's against COPD, but I think that we'll have— I think that will be— that's near term. And then I think next year we'll have one or maybe two additional lung drugs in the clinic. Again, I think that's a very important set of programs for us and for the field. Because again, 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. So we're excited about that. And then 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, we haven't set the indication, but we view that as also important. And so, you know, by the middle of next year, we'll be in what, hepatocytes, lung, solid tumor, and muscle cells. So we have 4 different cell types. And then I think next year, maybe towards the end of the year, there's a reasonable chance that we could be at our next cell type. And so I think, you know, we are pushing this technology forward as quickly as we can into as many new areas as we can.

Yeah. So I gotta ask you how that affects you as the leader of the organization and how it affects the organization just from tooling up standpoint, from a hiring standpoint, an organizational standpoint, when you have such a variety of indications and cell types that you're tackling, is that with this particular technology, is there a bunch of change that has to happen to be able to move into these new indications? Or is it, you know, sort of a one-size-fits-all approach?

Yeah, well, so the G-forces will kill you, you know, we're moving so quickly. But I tell you, from a fluffy standpoint, right? Not from an emotional standpoint, this is where you want to be. I think that the people here, and I certainly speak for myself, but I think the other people here 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 AeroVed today. And because we're so fast, people can see this, right? People can see the movement of developing new science 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 we all appreciate, you know, that it's unique that we get to do this. Anyway, so 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, and so we can be experts in RNA interference and the chemistry of RNA interference. That's scalable, and that's applicable to everything we're going after. You know, the molecule doesn't care what gene it's knocking down, right? You know, it can be epithelial sodium channel cell, or sorry, a gene in pulmonary epithelial cells, or it can be an alpha-1-antitrypsin deficiency target in hepatocytes. It doesn't matter. So that's scalable. The challenge here is scaling our ability to get into these new cell types and understanding new targeting ligands and understanding PK, how do you extend, how do you expand the PK in these new molecules to have enough interaction with cell surface receptors in new cell types? That's all complicated, and that's not one size fits all. You've gotta be pretty good in other areas. So that's the 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 anti-intellectual, but bear with me. I tell you, I think it is helpful for us not to be deep incumbents in some of the areas we're going after. You know, if you look at who drives true innovation, who drives paradigm shifts, it's infrequently the deep incumbents because they're mired in the dogma. It is the outsiders who ask dumb questions, you know, and who can approach a new area you know, with almost childlike naivete, right? You know, to say, well, wouldn't it be cool if you could do X? You know, I wonder if we can do Y. And it is very often the newcomers who can ask those fresh questions. And it is my hope that by expanding our reach into these new areas, that we can continue to ask those really, you know, probing, innovative questions.

Yeah, well, if it weren't for childlike naivete and dumb questions, I wouldn't have a job. So I appreciate the reference there. And when I say I appreciate I mean, it sticks. So how do you— you mentioned these challenges because it's not one size fits all, and the fact that you have to have, you know, very deep expertise in the biology for each of these indications. Just give me some time on how you go about— is that as simple as, you know, attracting the people with the intellectual capital to move those forward?

What's the key there? Sure. So let me start with, we try to make life as easy for ourselves as we can. And one of the ways we do that is to focus on well-validated targets, right? So, you know, there are more than two ways, but 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 it's good, but it's hard and it 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. And so you're not having to invent, if you will, new biology. That's where we start. And so 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. Now, 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. And I tell you, that's important for a few reasons. One, it de-risks these programs. And so we go into the clinic, I think, with a level of risk that is less than most small molecules, if you will, because we have pretty good confidence that RNAi is a reliable process and we also have good understanding that the gene targets we're going after are important for a certain disease process. So it's certainly helpful from that standpoint and also allows us to move a bit more quickly, right? You know, 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. You know, what we've shown is we've gone from idea to the clinic in 12 to 18 months, you know, in many of our, at least, hepatocyte-targeted programs. And that's unheard of in the field. It's just unheard of. Yeah. And that's— and look, it's important for our company, clearly, but, you know, we always think about this from the patient's perspective. This is important for patients because, you know, 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. And so, you know, we tell our our people at all the time, that those patients are our bosses and think about what they need, and that drives us. Excellent.

So I mentioned earlier your acquisition of Novartis's RNAi assets back in 2015, and as you know, this year Novartis got back in the RNAi game with the Medicine Company, the acquisition of the Medicine Company and its RNAi heart drug Inclisiran, did I pronounce that correctly? Yeah, yeah. So what— that makes me curious about your assessment of the competitive landscape in this space, uh, the, I guess, increasing or renewed interest in taking RNAi beyond the liver.

What's, what's your take on that? Sure, the, the world has, has come around to RNAi. Um, you know, it is, it is well accepted now that this is a This is a validated therapeutic modality that can do things that other modalities can't do. And that, look, it's not 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 about that. And they say, do you think Novartis feels foolish about this and such? And the answer is absolutely not. I think 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. Now, 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, and this is a good example of that. I think it's a good partnership. Alnylam and then Medicine Company pushed that drug forward, and then Novartis is going to do what they do well and bring it to the masses. I think that's a really nice case study as to how biopharmas should work.

Yeah, cool. Yeah, that's a refreshing response. So we're running short on time, Dr. Anzalone. I know you need to get running, but I want to give you an opportunity to share some concluding thoughts, knowing that our audience Our audience is comprised of folks who are perhaps first-time leaders of new and emerging biopharmas, perhaps those who have been around the block a few different times but are working on new indications with new therapeutics and new companies, new organizations. So whether it's, you know, I guess directly related to the emergence of RNAi or just, you know, from the perspective of a successful leader, What concluding thoughts would you leave for this group of people?

Yeah, you know, I don't know. I think this is a very exciting time. So COVID be damned. Look, I think this is a very exciting time in RNA interference. It is finally validated. And, you know, I think we are now just starting the process of bringing this, you know, into into the world for various diseases. And I think that we are in the first inning, to mix my metaphors, the first inning of this game. And 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's an awful lot of exciting new technologies that are moving by historical standards quite quickly. So, you know, look, I think it's a great time to be in this field, and look, I'm proud to be in this field. You know, we're doing good things, and, you know, 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, and it is to make important medicines that will affect people's lives, and I think we're good at doing that.

Yeah, I was just having a conversation with someone a little bit earlier today about the fact that it seemed like just what 6, 8 months ago, pharma and biopharma was sort of the favorite, you know, excuse the worn-out metaphor, but red-headed stepchild of the government, right? And now, you know, there's an opportunity for us to be the saviors, the heroes. Amen. Yeah. Well, Dr. Anzalone, keep up the good work. Congratulations on your success to date. And thank you very much for spending some time with us. I really appreciate it.

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

So that's Dr. Christopher Anzalone. I'm Matt Piller, and this is the Business of Biotech Summer Executive Sessions. We're produced by Bioprocess Online, and we're graciously supported by Cyteva. And I encourage you to check out the host of excellent resources for emerging biotechs at Cyteva at the URL cytevalifesciences.com/emergingbiotech. In the meantime, visit bioprocessonline.com, subscribe to our newsletter, be sure to subscribe to this podcast, and thank you for listening.