Company of the week: Arrakis navigates the undruggable desert

Finding the spice in RNA's vast landscape

Arrakis Therapeutics has positioned itself as a pioneer in RNA-targeted small molecules, securing $378 million in total funding including $265 million in upfront partnership payments from pharmaceutical giants Roche and Amgen as of August 2025. The Waltham-based company, named after the desert planet in Frank Herbert's Dune where valuable spice could only be found through dangerous exploration, is attempting to extract similarly rare value from the RNA landscape - developing oral pills that can modulate RNA to treat diseases previously considered undruggable.

Despite having no compounds in clinical trials yet, the company's rational drug design approach has demonstrated preclinical proof-of-concept in myotonic dystrophy type 1, marking a potential turning point after strategic challenges forced a pivot away from cancer targets and a 20% workforce reduction in late 2024.

The RNA-targeted small molecule market represents a $2.24 billion opportunity in 2023 projected to reach $3.60 billion by 2031. Arrakis stands at the forefront of approximately 10 companies racing to prove this new therapeutic modality, competing against rivals like Skyhawk Therapeutics (which has advanced to Phase 2/3 trials) and newer entrants like Remix Therapeutics.

The company's differentiation lies in its comprehensive platform combining the TRYST bioinformatics system for identifying druggable RNA structures with PEARL-seq technology for validating small molecule-RNA interactions at nucleotide-level precision.

The platform technology spans multiple RNA modalities

Arrakis has built two proprietary technology platforms that form the foundation of its drug discovery engine. The TRYST (Targeted RNA by Screening Technology) platform uses computational algorithms to predict RNA secondary and tertiary structures, identifying potential small molecule binding pockets where traditional drug discovery approaches have failed. This bioinformatics tool maps RNA sequence-structure-function relationships across the transcriptome, focusing particularly on sites where small molecules can interfere with mRNA translation.

The company's second core technology, PEARL-seq (Photoaffinity Evaluation of RNA Ligation-Sequencing), published in ACS Chemical Biology in 2020, utilizes photoaffinity labeling combined with next-generation sequencing to identify and validate small molecule binding locations within RNA targets at single-nucleotide resolution.

The scientific basis for targeting RNA with small molecules builds on historical precedent - several approved antibiotics already target bacterial RNA, and Novartis's LMI070 for spinal muscular atrophy demonstrates the approach can work in humans. Unlike proteins where active sites are often buried deep within complex structures, RNA forms more accessible three-dimensional shapes with defined binding pockets.

Arrakis's approach enables targeting of approximately 85-90% of proteins currently considered undruggable by instead targeting their encoding RNA transcripts. The company has developed multiple drug modalities including direct RNA binding, RNA degradation through recruited cellular machinery (NUTACs - nucleic acid-targeting chimeras), and splicing modulation.

The platform's industrial scale sets it apart from academic efforts or serendipitous discoveries. Arrakis applies modern structure-based drug design principles to RNA, using X-ray crystallography and computational modeling to rationally design compounds. Their reverse structure-activity relationship approach uniquely allows modification of RNA targets themselves to understand binding interactions, rather than just modifying compounds.

This systematic approach has identified over 200 RNA targets in the company's proprietary database, with programs spanning oncology, neurology, rare genetic disorders, and cardiovascular disease.

Funding trajectory reflects pharma validation despite clinical delays

The company's financial journey began with seed funding from Advent Life Sciences and the late Henri Termeer, expanding to a $38 million Series A in February 2017 led by Canaan Partners with participation from Pfizer, Celgene, and Osage University Partners.

The $75 million Series B in April 2019 brought in heavyweight investors including venBio Partners, Nextech Invest, Google Ventures, Omega Funds, and HBM Healthcare Investments. However, the real financial validation came through strategic partnerships rather than additional equity rounds.

Roche's April 2020 collaboration delivered $190 million upfront with potential for several billion dollars in milestone payments across multiple therapeutic areas. The structure gives Roche exclusive development rights after Arrakis completes initial discovery work.

Amgen followed in January 2022 with a $75 million upfront payment for five RNA degrader programs, combining Arrakis's RNA-targeting expertise with Amgen's induced proximity platform. These partnerships not only provided substantial non-dilutive funding but also validated the platform's potential across diverse therapeutic applications.

The absence of additional equity funding rounds since 2019 suggests the partnerships have provided sufficient runway, though the company's recent 20% workforce reduction indicates careful capital management.

With approximately 87-91 employees as of 2025, down from plans to double the workforce following the Roche deal, Arrakis appears to be prioritizing key programs while extending its financial runway through strategic focus rather than additional fundraising.

Clinical pipeline remains preclinical with DM1 as the lead program

Despite nearly a decade of operation, Arrakis has no active clinical trials registered on ClinicalTrials.gov as of August 2025. The lead internal program targets myotonic dystrophy type 1 (DM1), a rare genetic disorder affecting approximately 45,000 Americans and 500,000 people globally. The DM1-rSM compound works by selectively binding to toxic CUG repeat expansions in the DMPK mRNA, disrupting nuclear aggregates and liberating sequestered splicing factors like MBNL1 to correct splicing defects.

Preclinical data presented at the Cell Symposia in December 2024 demonstrated reversal of myotonia in HSALR mouse models, with high-resolution X-ray structures showing precise RNA-small molecule interactions.

The company claims this represents "one of the clearest examples of a rationally designed small molecule that has been purpose-built to address an RNA disease target." Additional data was presented at the MDA Conference in March 2025, though timeline for IND filing remains undisclosed.

The oncology pipeline includes programs targeting MYC and other traditionally undruggable cancer proteins, though CEO Michael Gilman acknowledged in December 2024 that the company hit "cul-de-sacs" in cancer drug development, particularly with the MYC oncogene program. This led to a strategic pivot toward more tractable targets in rare diseases. The APOC3 cardiovascular program and multiple undisclosed partnered programs with Roche and Amgen round out the pipeline, all remaining in preclinical development.

Mechanism of action leverages RNA's structural vulnerabilities

The DM1 program exemplifies Arrakis's mechanistic approach to RNA targeting. In myotonic dystrophy type 1, expanded CUG repeats in the DMPK gene create toxic RNA that sequesters MBNL proteins, causing widespread splicing defects. Arrakis's small molecules are designed to bind specifically to these CUG repeat structures, disrupting the pathogenic RNA-protein interactions and restoring normal splicing patterns.

Unlike oligonucleotide approaches that require injection and have limited tissue distribution, these oral small molecules can achieve systemic biodistribution including crossing the blood-brain barrier.

For the RNA degrader programs developed with Amgen, the mechanism involves recruiting cellular nucleases to selectively destroy disease-causing RNAs. These targeted RNA degraders represent a novel class combining Arrakis's RNA-targeting capabilities with Amgen's expertise in induced proximity platforms. The approach parallels the successful PROTAC strategy for protein degradation but applied to RNA targets.

The broader platform enables multiple mechanisms including direct mRNA translation inhibition (approximately 50% of programs) and pre-mRNA splicing modulation (approximately 50% of programs). Each mechanism offers different advantages depending on the target and disease context - splicing modulation can correct genetic defects, translation inhibition can reduce toxic protein production, and RNA degradation can eliminate pathogenic transcripts entirely.

Market opportunity centers on rare disease economics

The myotonic dystrophy type 1 market represents an $874 million opportunity in 2023, projected to reach $1.2-2.8 billion by 2030-2033 with a compound annual growth rate of 5.6-12.3%. With no approved disease-modifying therapies currently available and only symptomatic treatments like mexiletine for myotonia, the unmet medical need is substantial.

Arrakis's rational design approach positions it favorably against approximately 20 other DM1 candidates in development, most of which are repurposed drugs or oligonucleotide-based approaches with delivery limitations.

Orphan drug pricing dynamics suggest potential annual pricing of $200,000-350,000 based on comparable rare disease therapies. With 80% market penetration of the 50,000 US patients at peak, the DM1 program alone could generate $4.8-11.2 billion in global peak sales.

The broader RNA-targeted small molecule platform addresses a theoretical market of over 200,000 RNA transcripts compared to only 500 current drug targets, suggesting substantial expansion potential beyond the lead indication.

The company benefits from likely regulatory advantages including orphan drug designation, breakthrough therapy designation, and fast track status given the serious nature of DM1 and lack of approved treatments.

These designations typically reduce development timelines by 3-4 years and allow for smaller, more focused clinical trials. Reimbursement prospects appear favorable given the orphan drug status, high unmet need, and historically strong payer coverage for rare disease therapies with clear clinical benefit.

Competitive landscape shows Arrakis leading in partnerships but lagging in clinical advancement

The RNA-targeted small molecule space includes approximately 8-10 direct competitors, with Skyhawk Therapeutics emerging as the clinical leader having advanced SKY-0515 for Huntington's disease into Phase 2/3 trials. Skyhawk has also accumulated over $400 million in upfront partnership payments across deals with Biogen, Vertex, Merck, and others, though its platform focuses more narrowly on splicing modulation compared to Arrakis's broader approach.

Ribometrix, with $65.3 million in funding and partnerships with Genentech/Roche ($25 million upfront) and Vertex ($20 million upfront), has demonstrated c-MYC protein reduction using its SHAPE technology for RNA structure analysis.

Expansion Therapeutics raised $135 million focusing on repeat expansion disorders with its Chem-CLIP platform, while Remix Therapeutics secured $151 million and a 2024 Roche partnership worth up to $1 billion for its REMaster platform targeting multiple RNA processing steps.

Despite clinical delays, Arrakis maintains the largest aggregate partnership value at $265 million upfront, validating its platform breadth. The company's differentiation lies in its comprehensive approach spanning direct binding, degradation, and splicing modulation, while competitors typically focus on single mechanisms.

However, the lack of clinical compounds represents a significant competitive disadvantage that grows more pronounced as rivals advance their programs.

Patent portfolio and scientific publications establish technical credibility

The company's intellectual property portfolio centers on core platform technologies with broad geographic coverage. The foundational PEARL-seq patent (US Patent 11,820,763) was granted in November 2023, covering photoactivatable compounds for RNA binding site determination.

Earlier patents from 2017-2018 cover compounds and methods for treating RNA-mediated diseases and modulating RNA function, with coverage extending across the US, EU, China, Japan, and other major markets.

The scientific foundation was established through the 2020 ACS Chemical Biology publication describing the PEARL-seq platform, which has garnered over 20 citations and recognition as a breakthrough technology for RNA-drug discovery.

Conference presentations in 2024-2025 at Cell Symposia and the MDA Conference have begun revealing structural and efficacy data for the DM1 program, demonstrating the translation from platform technology to therapeutic candidates.

The patent strategy provides freedom-to-operate across chemical compositions, screening methodologies, therapeutic applications, and manufacturing methods. This comprehensive IP position, combined with first-mover advantage in rational RNA-targeted drug design, creates significant barriers to competition and potential value in acquisition scenarios.

Leadership combines biotech veterans with technical founders

CEO Michael Gilman brings a track record of successful exits, having founded and sold Padlock Therapeutics to Bristol-Myers Squibb in 2016 and Stromedix to Biogen in 2012. His experience includes executive roles at Biogen, ARIAD Pharmaceuticals, and Cold Spring Harbor Laboratory, providing deep expertise in drug discovery and company building.

Founder and Chief Scientific Officer Jennifer Petter, who publicly transitioned as a transgender woman at Arrakis in 2018, contributes over 50 papers and 50 patents from previous roles at Celgene, Avila Therapeutics, and Biogen.

The January 2025 departure of Jacques Dumas as Chief Scientific Officer to join Aicuris represents a significant leadership change. Dumas brought 30 years of pharmaceutical R&D experience including co-inventing Bayer's Nexavar and Stivarga. Chief Business Officer James Mutamba, who joined in December 2021 from Pyxis Oncology where he led the Series B and IPO, manages partnerships and strategic initiatives.

Board Chair Katrine Bosley, former CEO of Editas Medicine and Avila Therapeutics, leads a board including representatives from major investors Pfizer Ventures and Advent Life Sciences. The eight-member Scientific Advisory Board includes Melissa Moore, former Chief Scientific Officer at Moderna who led mRNA platform development, though she recently transitioned from the SAB chair role.

Recent strategic pivot reveals both challenges and opportunities

The December 2024 acknowledgment by CEO Gilman of hitting "cul-de-sacs" in cancer drug development marks a significant strategic inflection point. The company's inability to successfully drug the MYC oncogene despite years of effort forced a reevaluation of target selection and therapeutic focus. The subsequent 20% workforce reduction and pivot toward rare diseases with clearer mechanistic rationales reflects both technical realities and capital efficiency priorities.

This strategic shift, while painful, may ultimately strengthen the company's position. The DM1 program offers a more straightforward path to clinical proof-of-concept compared to complex cancer biology, with clear biomarkers, defined patient populations, and strong mechanistic rationale. The December 2024 data showing reversal of myotonia in animal models provides the first clear validation of the rational design approach, potentially marking a turning point after years of platform building.

The partnership revenue provides a financial cushion during this transition, though the lack of additional equity funding since 2019 and recent layoffs suggest careful cash management is essential. The company appears to be extending runway through focus rather than fundraising, prioritizing programs with the highest probability of clinical success.

Red team analysis exposes critical vulnerabilities

Technical execution risk dominates the bear case. Despite nearly a decade of operation and $378 million in funding, Arrakis has yet to advance a single compound into human trials. The failure of the MYC program after years of investment raises questions about the fundamental druggability of RNA targets and the company's target selection process. While preclinical data for DM1 appears promising, the translation from mouse models to human efficacy remains unproven for this novel modality.

Competitive dynamics are rapidly shifting against Arrakis. Skyhawk's advancement to Phase 2/3 trials establishes clinical precedent that Arrakis lacks, potentially making Skyhawk the preferred partner for future deals. Newer entrants like Remix secured major partnerships in 2024 despite less mature platforms, suggesting the window for first-mover advantage is closing.

The proliferation of RNA-targeting approaches including oligonucleotides, siRNA, and other modalities provides alternative solutions that may prove superior to small molecules.

Financial constraints could force suboptimal decisions. The recent layoffs and strategic pivot suggest limited runway despite partnership revenue. Without clinical data to drive additional partnerships or warrant public market access, the company may face difficult choices between accepting unfavorable acquisition terms or risking further delays.

The concentration of value in two partnerships creates vulnerability if either Roche or Amgen reduces commitment based on internal portfolio prioritization.

Regulatory and commercial risks remain unquantified. As a novel modality, RNA-targeted small molecules may face unexpected safety concerns or regulatory requirements that extend development timelines and costs. Even if successful, the DM1 market may prove smaller than projected given diagnostic challenges and disease heterogeneity. Pricing pressure on orphan drugs continues to intensify globally, potentially limiting commercial upside even for successful programs.

Blue team analysis reveals persistent strategic advantages

Platform validation through premier partnerships provides credibility and resources. The $265 million in upfront payments from Roche and Amgen represents the largest aggregate partnership value in the RNA-targeted small molecule space, validating both the technology and team.

These partnerships provide not just capital but also development expertise, commercial infrastructure, and risk-sharing that de-risks the overall enterprise. The breadth of applications across oncology, rare diseases, and RNA degradation demonstrates platform versatility beyond any single program.

Technical differentiation remains meaningful despite clinical delays. The PEARL-seq platform provides unique capabilities for systematic RNA target identification and validation that competitors lack. The ability to conduct structure-based drug design with X-ray crystallography of RNA-small molecule complexes enables rational optimization rather than empirical screening.

The comprehensive approach spanning multiple mechanisms (binding, degradation, splicing) provides more shots on goal compared to mechanism-focused competitors.

Market dynamics favor eventual value realization. The RNA therapeutics market is projected to reach $19-42 billion by 2032-2034, with next-generation approaches growing at 68% CAGR. Large pharma's continued interest in RNA-targeting approaches, evidenced by recent acquisitions like Roche-Ascidian ($1.8 billion) and partnerships across the industry, suggests strong acquisition potential for validated platforms.

The theoretical addressable market of 200,000+ RNA transcripts dwarfs the ~500 current drug targets, providing decades of expansion opportunity.

Leadership and investor quality provide staying power. Michael Gilman's track record of building and selling companies, combined with Jennifer Petter's technical expertise, creates a rare combination of business and scientific leadership. Blue-chip investors including Google Ventures, venBio Partners, and HBM Healthcare provide not just capital but strategic guidance and industry connections. The scientific advisory board including former Moderna CSO Melissa Moore brings cutting-edge RNA expertise and credibility.

Comparison to biotech peers highlights unique positioning

Unlike pure-platform companies that license technology without developing internal programs, Arrakis maintains both proprietary pipeline assets and partnership programs, similar to the successful Ionis Pharmaceuticals model in antisense oligonucleotides. This dual approach provides multiple value drivers and de-risks the business model compared to single-asset biotechs.

Relative to other RNA-targeting companies, Arrakis occupies a unique position. Alnylam Pharmaceuticals (market cap ~$30 billion) proves the commercial potential of RNA-targeted therapeutics but requires injection for its siRNA drugs. Ionis Pharmaceuticals (market cap ~$6 billion) has multiple approved antisense drugs but faces similar delivery limitations. Arrakis's oral small molecule approach could capture significant value if it demonstrates efficacy comparable to these injectable alternatives.

Among direct small molecule competitors, Arrakis's $265 million in partnership validation exceeds Ribometrix's ~$45 million and Expansion's undisclosed amounts, though Skyhawk's $400+ million across multiple partnerships and clinical advancement provides a sobering comparison. The recent $300 million Series A for ReNAgade Therapeutics in 2023 for an RNA delivery platform suggests continued investor appetite for differentiated RNA technologies despite the competitive landscape.

Investment thesis balances transformative potential against execution risk

Arrakis Therapeutics represents a compelling but complex investment opportunity at the intersection of validated biology and unproven therapeutic modality. The company's positioning as the pioneer of rationally designed RNA-targeted small molecules, backed by $265 million in big pharma partnerships, establishes significant strategic value. The lead DM1 program addresses a $1-3 billion market opportunity with no approved disease-modifying therapies, providing a clear path to value inflection through clinical proof-of-concept.

However, the nearly decade-long preclinical phase, recent strategic pivot from oncology, and 20% workforce reduction reveal execution challenges that temper near-term expectations. The company's ultimate success depends on translating elegant platform science into clinical reality - a transition that has proved elusive thus far. Competition from both established RNA therapeutic modalities and emerging small molecule rivals creates urgency for clinical advancement.

The investment case ultimately rests on whether Arrakis can achieve what CEO Gilman calls moving from "biotech fantasy" to therapeutic reality. Success would establish an entirely new drug modality with applications across hundreds of diseases.

Failure would likely result in partnership terminations and limited salvage value. For risk-tolerant investors with long time horizons, the asymmetric upside potential may justify the binary risk profile. For others, waiting for clinical validation may be prudent despite potentially missing the optimal entry point.

The next 12-18 months appear pivotal, with DM1 IND filing and initial clinical data representing critical milestones that will either validate the platform's promise or expose fundamental limitations. Like the desert planet Arrakis from which it takes its name, the company exists in a harsh environment where only the most adapted survive, but where those who succeed in extracting value from seemingly barren landscapes can reshape entire industries.