The U.K. RNA interference company Silence Therapeutics PLC is raising £5.7 million ($8.8 million) in funding from new and existing investors to extend its cash runway to nearly the end of 2014. The new funding will allow its lead anticancer RNAi compound Atu027 to reach proof of concept.

The company, which is listed on the Alternative Investment Market (AIM) in London and has research laboratories in Berlin, expects to raise the funds through a deeply discounted share subscription and open offer announced July 12, and a £1 million convertible bond. It is offering 940 million shares at 0.5 pence a share, a 44% discount to the price of 0.89 pence per share at closing on July 11.

Although neither the offerings nor the note are underwritten, company Chairman Jerry Randall said that existing and new shareholders had given commitments for the raising of at least £5.2 million. Approval for the fundraising will be sought at a shareholder meeting on July 31.

To complete its financing changes, Silence has also secured a £10 million equity finance facility from Darwin Strategic Ltd., part of the U.K. fund management group Henderson Global Investors. Silence CEO Tony Sedgwick said the facility would improve the company's financial flexibility and efficiency. The funds can be drawn down over the next three years, paid for by new Silence shares issued at a 5% discount to the prevailing price.

"The company is under no obligation to use the facility," Sedgwick noted in an interview. "In retrospect, a previous fundraising in 2011 of £6.5 million didn't give us sufficient time or breathing space to move our technology forward," he said. “The current fundraising should, depending on various events, take us to the end of 2014," he added.

The proposed fundraising comes just in time for Silence, which previously indicated that its coffers would be empty by the second half of 2012. The new funds should allow it to conduct a small Phase Ib trial of Atu027 in combination with chemotherapy and a subsequent small Phase IIa trial. Atu027, which currently is in a Phase I study, is an RNAi molecule that targets PKN3, a protein implicated in cancer growth and metastases. Preclinical work has suggested that it inhibits the supply of blood to solid tumors and prevents tumor metastases.

There have been pockets of good news in the RNAi sector recently. For example, U.S. company Alnylam Pharmaceuticals Inc. raised $87 million in a follow-on public offering in February 2012 Also see "Alnylam CEO John Maraganore – An Interview With “The Pink Sheet” DAILY (Part 1 of 2)" - Pink Sheet, 5 July, 2012.. Sedgwick said he believed the potential prospects for RNAi therapies have improved since 2010, when Roche announced it was ending its RNAi research efforts and other companies downplayed their RNAi activities Also see "Roche Exits RNAi, Raising Questions For Stalwarts " - In Vivo, 1 December, 2010.). With its own and Alnylam's products progressing through the pipeline, the sector is now a "product rather than a platform story," he commented.

Clinical Results Expected Soon

Silence reported at the recent American Society of Clinical Oncology (ASCO) meeting that the administration of Atu027 was associated with stable disease in 10 of 33 patients with solid tumors in a Phase I trial. Atu027 was reported to be safe and well tolerated, and the trial is set to finish at the end of July 2012, with the results due out shortly thereafter.

Silence has another RNAi molecule in preclinical development that has produced encouraging results in models of acute lung injury. Atu111, aimed against an undisclosed target, uses a DACC, the company's lung endothelium-specific RNAi delivery system. The company also has development projects underway in liver fibrosis.

Silence could receive milestone payments in the future if any licensees of its RNAi technology are successful in their development programs. It has received $6 million to date from Quark Pharmaceuticals Inc. and Pfizer Inc., which are collaborating on the development of RNAi therapy PF-04523655 for eye disorders. A 264-patient Phase IIb trial in patients with diabetic macular edema, with the drug used either alone or in combination with Genentech Inc./Novartis AG's Lucentis (ranibizumab), is slated for completion in the middle of 2014. A Phase IIa trial with PF-04523655 also is planned in open-angle glaucoma. Silence would receive a $4 million milestone if the licensees started a Phase III clinical study.

Silence also could receive milestones if Novartis exercises its option and develops Quark's QPI-1002, an RNAi product based on Silence's technology that is being evaluated for the prevention of delayed graft function in kidney transplant patients. A Phase II trial in the indication is expected to be completed by the end of 2012. Silence also is discussing the licensing of its technology to a number of other pharmaceutical companies.

Silence Therapeutics Raising $8.8M To Send RNAi Drug To Phase IIa

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