We estimate that we will receive net proceeds of approximately $39.4 million
(or approximately $45.7 million if the underwriters’ over-allotment option is
exercised in full) from the sale of the shares of common stock offered by us
in this offering, after deducting the underwriting discounts and commissions
and estimated offering expenses payable by us. We will also receive $25.0
million from the sale by us of shares of our common stock in the concurrent
private placement to AstraZeneca, at a price per share equal to the initial
public offering price.
We intend to use the net proceeds of this offering and the concurrent private
placement for preclinical and clinical development of our initial micro RNA
development candidates, for the identification and validation of additional
micro RNA targets, and for capital expenditures, working capital and other
general corporate purposes, including costs and expenses associated with
being a public company. We may also use a portion of the net proceeds to
in-license, acquire or invest in complementary micro RNA businesses,
technologies, products or assets. However, we have no current commitments
or obligations to do so. We cannot currently allocate specific percentages
of the net proceeds that we may use for the purposes specified above.
Accordingly, we will have broad discretion in the use of the net proceeds
from this offering and the concurrent private placement and could spend the
proceeds in ways that do not improve our results of operations or enhance
the value of our stock. Pending their use, we plan to invest the net
proceeds from this offering and the concurrent private placement in short-
and intermediate-term, interest-bearing obligations, investment-grade
instruments, certificates of deposit or direct or guaranteed obligations
of the U.S. government.
The biotechnology and pharmaceutical industries are characterized by intense
and rapidly changing competition to develop new technologies and proprietary
products. While we believe that our proprietary asset estate and scientific
expertise in the micro RNA field provide us with competitive advantages, we
face potential competition from many different sources, including larger and
better-funded pharmaceutical companies. Not only must we compete with other
companies that are focused on micro RNA therapeutics but any products that
we may commercialize will have to compete with existing therapies and new
therapies that may become available in the future.
We are aware of several companies that are working specifically to develop
micro RNA therapeutics. These include the biotechnology companies Groove
Biopharma, Inc., miRagen Therapeutics, Inc., Mirna Therapeutics, Inc., and
Santaris Pharma A/S. These competitors also compete with us in recruiting
human capital and securing licenses to complementary technologies or specific
micro RNAs that may be critical to the success of our business. They also
compete with us for potential funding from the pharmaceutical industry.
In addition, we expect that for each disease category for which we determine
to develop and apply our micro RNA therapeutics there are other biotechnology
companies that will compete against us by applying marketed products and
development programs using technology other than micro RNA therapeutics.
The key competitive factors that will affect the success of any of our
development candidates, if commercialized, are likely to be their efficacy
relative to such competing technologies, safety, convenience, price and the
availability of reimbursement from government and other third-party
payors. Our commercial opportunity could be reduced or eliminated if our
competitors have products which are better in one or more of these
categories.
Company Description
We are a biopharmaceutical company focused on discovering and developing
first-in-class drugs that target micro RNAs to treat a broad range of
diseases. We were formed in 2007 when Alnylam Pharmaceuticals, Inc., or
Alnylam, and Isis Pharmaceuticals, Inc., or Isis, contributed significant
intellectual property, know-how and financial and human capital to pursue
the development of drugs targeting micro RNAs pursuant to a license and
collaboration agreement. micro RNAs are recently discovered, naturally
occurring ribonucleic acid, or RNA, molecules that play a critical role
in regulating key biological pathways. Scientific research has shown the
improper balance, or dysregulation, of micro RNAs is directly linked to
many diseases. We believe we have assembled the leading position in the
micro RNA field, including expertise in micro RNA biology and oligonucleotide
chemistry, a broad intellectual property estate, key opinion leaders and
disciplined drug discovery and development processes. We refer to these
assets as our micro RNA product platform. We are using our micro RNA product
platform to develop chemically modified, single-stranded oligonucleotides
that we call anti-miRs. We use these anti-miRs to modulate micro RNAs and
by doing so return diseased cells to their healthy state. We believe micro
RNAs may be transformative in the field of drug discovery and that anti-miRs
may become a new and major class of drugs with broad therapeutic application
much like small molecules, biologics and monoclonal antibodies.
We are currently optimizing anti-miRs in five distinct programs, both
independently and with our strategic alliance partners, AstraZeneca AB,
or AstraZeneca, GlaxoSmithKline plc, or GSK, and Sanofi. Under these
strategic alliances, we are eligible to receive up to approximately $1.7
billion in milestone payments upon successful commercialization of micro
RNA therapeutics for the eleven programs contemplated by our agreements.
These payments include up to $106.5 million upon achievement of preclinical
and IND milestones, up to $350.0 million upon achievement of clinical
development milestones, up to $420.0 million upon achievement of regulatory
milestones and up to $850.0 million upon achievement of commercialization
milestones. We anticipate that we will nominate at least two clinical
development candidates within the next 12 months and file our first
investigational new drug applications, or INDs, with the U.S. Food and Drug
Administration, or FDA, in 2014.
POTENTIAL OF micro RNA BIOLOGY
RNA plays an essential role in the process used by cells to encode and
translate genetic information from DNA to proteins. RNA is comprised of
subunits called nucleotides and is synthesized from a DNA template by a
process known as transcription. Transcription generates different types
of RNA, including messenger RNAs that carry the information for proteins
in the sequence of their nucleotides. In contrast, micro RNAs are small
RNAs that do not code for proteins but rather are responsible for regulating
gene expression by affecting the translation of target messenger RNAs. By
interacting with many messenger RNAs, a single micro RNA can regulate
several genes that are instrumental for the normal function of a biological
pathway. More than 500 micro RNAs have been identified to date in humans,
each of which is believed to interact with a specific set of genes that
control key aspects of cell biology. Since most diseases are multi-factorial and
involve multiple targets in a pathway, the ability to modulate gene networks by
targeting a single micro RNA provides a new therapeutic approach for treating
complex diseases.
We believe that micro RNA therapeutics have the potential to become a new
and major class of drugs with broad therapeutic application for the following
reasons:
. micro RNAs are a recent discovery in biology and, up until now, have not
been a focus of pharmaceutical research;
. micro RNAs play a critical role in regulating biological pathways by
controlling the translation of many target genes;
. micro RNA therapeutics target entire disease pathways which may result
in more effective treatment of complex multi-factorial diseases;
. micro RNA therapeutics can be produced with a more efficient rational
drug design process; and
. micro RNA therapeutics may be synergistic with other therapies because
of their different mechanism of action.
OUR micro RNA PRODUCT PLATFORM
We are the leading company in the field of micro RNA therapeutics. Backed
by our founding companies, Alnylam and Isis, we are uniquely positioned to
leverage oligonucleotide technologies that have been proven in clinical
trials. Central to achieving our goals is the know-how that we have
accumulated in oligonucleotide design and how the specific chemistries
behave in the clinical setting. We refer to this collective know-how,
proprietary technology base, and its systematic application as our micro
RNA product platform.
We view the following as providing a competitive advantage for our micro
RNA product platform:
. a mature platform selectively producing multiple development candidates
advancing to the clinic;
. scientific advisors who are pioneers in the micro RNA field;
. access to proven RNA therapeutic technologies through our founding
companies;
. a leading micro RNA intellectual property estate with access to over
1,000 patents and patent applications;
. development expertise and financial resources provided by our three major
strategic alliances with AstraZeneca, GSK and Sanofi; and
. over 30 academic collaborations that help us identify new micro RNA
targets.
The disciplined approach we take for the discovery and development of
micro RNA therapeutics is as important as the assets assembled to execute
our plans and is based on the following four steps:
Step 1 - Evaluation of microRNA therapeutic opportunities
The initiation of our micro RNA discovery and development efforts is based
on rigorous scientific and business criteria, including:
. existence of significant scientific evidence to support the role of a
specific micro RNA in a disease;
. availability of predictive preclinical disease models to test our micro
RNA development candidates;
. ability to effectively deliver anti-miRs to the diseased cells or tissues;
and
. existence of a reasonable unmet medical need and commercial opportunity.
Step 2 - Identification of microRNA targets
We identify micro RNA targets through bioinformatic analysis of public and
proprietary micro RNA expression profiling data sets from samples of diseased
human tissues. The analysis of such data sets can immediately highlight a
potential role for specific micro RNAs in the disease being studied. Further
investigation of animal models that are predictive of human diseases in which
those same micro RNAs are also dysregulated provides additional data to
support a new program. We have applied this strategy successfully in our
existing programs and we believe that this approach will continue to help
us identify clinically relevant micro RNA targets.
Step 3 - Validation of microRNA targets
Our validation strategy is based on two distinct steps. First, using genetic
tools, we determine whether up-regulation, or overproduction, of the micro
RNA in healthy animals can create the specific disease state and inhibition
of the micro RNA can lead to a therapeutic benefit. Second, using animal
models predictive of human diseases, we determine whether pharmacological
modulation of the up-regulated micro RNA target with our anti-miRs can also
lead to a therapeutic benefit. This validation process enables us to
prioritize the best micro RNA targets that appear to be key drivers of
disease and not simply correlating markers.
Step 4 - Optimization of microRNA development candidates
We have developed a proprietary process that allows us to rapidly generate
an optimized development candidate. Unlike traditional drug classes, such
as small molecules, in which thousands of compounds must be screened to
identify prospective leads, the fact that anti-miRs are mirror images of
their target micro RNAs allows for a more efficient rational design process.
The optimization process incorporates our extensive knowledge base around
oligonucleotide chemistry and anti-miR design to efficiently synthesize a
starting pool of rationally designed anti-miRs to be evaluated in a series
of proven assays and models. We also enhance our anti-miRs for distribution
to the tissues where the specific micro RNA target is causing disease.
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We were originally formed as a limited liability company under the name
Regulus Therapeutics LLC in the State of Delaware in September 2007. In
January 2009, we converted Regulus Therapeutics LLC to a Delaware corporation
and changed our name to Regulus Therapeutics Inc. Our principal executive
offices are located at 3545 John Hopkins Court, Suite 210, San Diego,
California 92121, and our telephone number is (858) 202-6300. Our corporate
website address is www.regulusrx.com.