SLN - Silence Therapeutics: Breaking The Silence On An Under-The-Radar Mid-Stage SiRNA Platform

2023-03-13 23:58:45 ET

Summary

• Silence Therapeutics is an underfollowed British siRNA company focusing on cardiovascular and autoimmune diseases.
• Silence Therapeutics is a de-risked investment opportunity with significant potential upside, supported by its robust pipeline, strategic collaborations, and favorable financial position.
• We expect multiple clinical catalysts during YE 2023, and the company has 1-2 years of cash runway.
• We initiate with a speculative buy rating.

Background

Silence Therapeutics ( SLN ) is a UK-based biotechnology company specializing in RNA interference [RNAi] technology. The company is focused on developing and commercializing a pipeline of therapies using its proprietary platform technology to target and silence disease-causing genes. Silence Therapeutics has a diversified pipeline of preclinical and clinical programs across multiple indications, including oncology, cardiovascular diseases, and genetic disorders. As of today, the Phase II study of SLN360 targeting Lpa in patients with high ASCVD risk and the Phase I/II study of SLN124 targeting TMPRSS6 in patients with polycythemia vera (PV) is underway. Moving forward, The company plans to release multiple ascending dose data from the Phase I studies of both SLN360 and SLN124 programs in the fourth quarter of 2023.

Silence Therapeutics ' siRNA platform provides precision-engineered medicines that can target both rare and common genetic diseases while reducing potential side effects. The company's siRNA therapies can achieve long-lasting effects after a single dose without permanently altering the gene, making them durable yet reversible. Silence is advancing multiple wholly-owned clinical programs in cardiovascular/rare diseases and +16 partnered programs. The safety profile of the siRNA platform is precise mRNA targeting and cell-specific delivery, reducing the potential for side effects. The treatment modality requires only a few outpatient injections per year, making it a convenient option for patients. The platform's precision mechanism allows for any gene to be silenced by using a siRNA molecule designed to precisely and selectively target the mRNA and induce its cleavage, making it a versatile therapeutic option for a variety of diseases. Overall, the siRNA platform of Silence Therapeutics provides a compelling investment opportunity with its broad utility, durability, and precise mechanism of action.

Underfollowed siRNA opportunity

Silence Therapeutics is an attractive investment opportunity for long-term investors looking for exposure to the emerging RNA therapeutics market. The company's focus on balancing wholly owned programs and strategic partnerships for the mRNAi GOLD platform provides investors with a diversified pipeline that mitigates risk. The Phase II study of SLN360 targeting Lpa in patients with high ASCVD risk and the Phase I/II study of SLN124 targeting TMPRSS6 in patients with polycythemia vera (PV) have shown impressive clinical data to date.

The Phase II trial of SLN360 levels is currently enrolling participants with Lpa ?125 mmol/L at high risk of ASCVD events. The company plans to enroll approximately 160 patients in the fourth quarter of this year.

The results of the Phase I APOLLO study were presented as a late-breaking clinical trial abstract at the American College of Cardiology (ACC) scientific sessions and published in JAMA simultaneously.

As shown above, the phase 1 data of SLN360 demonstrated a) reduction in Lpa up to 98% in the highest dose cohort at day 60 and b) had a sustained effect of 81% reduction at day 150 with a single dose.

Additional data previously presented at the American Heart Association (AHA) meeting showed durable knockdown with about a 50% reduction in Lpa on day 365 after the initial dose. We note that Novartis's pelacarsen's multiple ascending doses showed a return of Lpa to the baseline in 90 days, and olpasiran's Lpa returned to baseline over 225 days).

Although multiple years behind, this data indicates that SLN360 has a competitive profile against both pelacarsen (potentially superior to pelacarsen) and olpasiran. We expect the anti-Lpa market to have multiple blockbuster drugs, similar to what we have seen with Statins and various other metabolic diseases, albeit we believe for significant market adoption, SLN360 needs to come up with a significantly more robust CVD outcomes data and may have to provide an aggressive discount to compete with pelacarsen and olpasiran that will likely be approved between 2025-2030 timeframe.

During Silence Therapeutics' presentation , the company provided an update on SLN124, a lead asset targeting both beta-thalassemia and polycythemia vera (PV). The program is currently in Phase I/II study, and the company expects to release multiple-dose data in the fourth quarter of 2023. Notably, preliminary single-dose results showed a promising safety profile without serious or severe adverse events or dose-limiting toxicity signals. The company also plans to release GEMINI-II multiple ascending dose data of SLN360 in thalassemia by YE 2023. The Phase I/II study in PV is enrolling at the moment.

Key catalysts

• SLN360: phase 1 MAD in patients with high Lpa and stable ASCVD (Q4 2023), completion of phase 2 high-risk ASCVD Q4 2023.
• SLN124: Phase 1 MAD data expected in Q4 2023

Risks

1. Regulatory risks: Silence Therapeutics is subject to various regulatory risks, such as delays in clinical trial approvals or the rejection of its drug candidates by regulatory authorities. For example, the company's lead drug candidate SLN124 is currently in Phase 1 clinical trials for the treatment of iron overload disorders such as beta-thalassemia and hereditary hemochromatosis. However, there is no guarantee that the drug will be approved for these indications by regulatory authorities. Additionally, the regulatory approval process can be lengthy and expensive, with no guarantee of success.

2. Competition risks: Silence Therapeutics faces competition from other biotech companies focused on RNAi therapies, such as Alnylam Pharmaceuticals (ALNY) and Ionis Pharmaceuticals (IONS). These companies have significantly larger market capitalizations and greater financial resources than Silence Therapeutics. For example, Alnylam's Onpattro, an RNAi-based therapy for the treatment of polyneuropathy caused by hereditary transthyretin-mediated amyloidosis, received FDA approval in 2018 and is currently on the market. The success of Onpattro may make it more difficult for Silence Therapeutics to gain market share.
3. Intellectual property risks: Silence Therapeutics relies heavily on its intellectual property portfolio, which includes patents on its RNAi technology and drug candidates. However, there is always the risk of patent infringement lawsuits from competitors or the loss of patent protection for the company's products. In 2018, Alnylam filed a lawsuit against Silence Therapeutics alleging infringement of its patents related to RNAi technology. The lawsuit was settled in 2020, but the risk of similar lawsuits remains a concern for Silence Therapeutics.
4. Clinical trial risks: Developing new drugs and therapies involves significant clinical trial risks. For example, Silence Therapeutics' SLN360, a drug candidate for the treatment of cardiovascular diseases, failed to meet its primary endpoint in a Phase 2 clinical trial in 2019. This failure negatively impacted the company's share price and highlights the risks associated with clinical trials. Furthermore, the success of SLN124 and other drug candidates in Silence Therapeutics' pipeline will depend on their ability to demonstrate efficacy and safety in clinical trials. Any setbacks or failures in these trials could significantly impact the company's reputation and financial performance.

Conclusion

Our analysis suggests that Silence Therapeutics represents an attractive yet underfollowed investment opportunity in the RNA therapeutics space. We consider the siRNA platform to be relatively derisked based on previous approvals over the past five years. The company's mRNAi GOLD platform has demonstrated impressive clinical data from the APOLLO and GEMINI programs, and its continued progress with strategic collaborations with industry giants such as AstraZeneca (AZN), Mallinckrodt (MNK), and Hansoh (HNSPF) validate the strength of its pipeline. We anticipate multiple data readouts around YE 2023 and believe early 2023 to be an excellent time to accumulate a position. In addition, the company has a strong balance sheet. According to the company's 2022 financial statements, Silence Therapeutics burns approximately ~$15m cash per quarter , and with ~$113m of cash on hand, we anticipate a cash runway of 1-2 years. Overall, we view Silence Therapeutics as a compelling investment opportunity with significant potential upside, supported by its strong pipeline, strategic collaborations, and favorable financial position.

For further details see: