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RNAi Evolving As A Two-Fisted Knockout Technology

Managing Editor

Ribonucleic acid interference (RNAi) has grown from a curiosity, outlived its hype and has emerged as a sound market that has revolutionized biotechnology research and is proceeding toward the ultimate goal of producing effective marketed therapeutics for treatment of a variety of disease targets.

RNAi has achieved credibility as a research tool in scientific, laboratory, and now, clinical, applications and has been the breadwinner for its market while the therapeutics sector methodically negotiated the regimented drug development path. Now that the technology has entered the clinic, and anticipates knocking on the door again soon to request entry for as many as six more candidates in 2006, the therapeutics sector is poised to relieve the research tools market and vie for the blockbuster revenue in the prescription drug market.

A year ago, RNAi was one of the most talked subjects in the biotechnology industry. A year later, it is just as hot a topic, but the talk has evolved parallel to the technology. Discourse through late-2004 was limited to hyping RNAi's discovery and potential. Since the technology's initiation into clinical trials in October 2004 and its rapidly growing, and profitable, role as a research tool, discussion has grown to profess its accomplishments and laud its expectations.

Genes influence all structures and functions in the body and abnormal genes can originate disease or alter the risk of developing a disease. Regulation of genes can turn off disease-causing functions in therapeutic applications, or it can manipulate gene function for research purposes. RNAi is the process researchers are using to conduct that regulation, and that is the primary value of RNAi.

BRCA1 and BRCA2 (Breast Cancer 1 and Breast Cancer 2) are examples of abnormal genes that are involved in many cases of hereditary breast and ovarian cancer. Regulation of these genes can reduce susceptibility by as much as 10 percent in the approximately 192,000 women diagnosed annually in the U.S. with the disease.

We currently treat diseases such as hypertension, cancer, diabetes and clinical depression, but if scientists can identify function and terminate activity in atypical genes, then it may be possible to cure such diseases.

Since scientific research, such as the Human Genome Project (HGP) and other endeavors, has conquered the monumental task of identifying every gene in the human genome, in several animal species and in many microorganisms that cause disease, researchers can use RNAi to methodically shut down function in one gene after another. This allows for precise identification of each gene's role in various processes, including that of starting, or maintaining, disease. If a particular gene plays such a role, it can be targeted for RNAi delivery of appropriate therapeutics that shut down the gene and silence its aberrant function.

Therapeutic endeavors reclaim headlines from litigation issues

There are still more RNAi litigation cases than there are RNAi products or relative clinical trials; however, there is decreasing anxiety over the outcome of those intellectual property (IP) issues and increasing attention being focused on entering and advancing RNAi therapeutics through the drug development clinical process.

Litigious issues are declining through a drop in the number of new filings and through resolution of outstanding cases, while drug development projects are increasing, due to the dwindling apprehension over the impact of such an influential and significant market factor as the impending court decisions.

Companies are determined to protect their technologies, but are more than willing to share them afterwards. The number of new lawsuit filings is decreasing and litigation trends are resulting in conciliatory outcomes which leave no one out in the cold, rather than castigatory conclusions that exclude defeated litigants from participation in the relative space. Academic institutions and corporate entities that are holding patents for RNAi technologies are on record for endorsing policies of inclusion which advocate dissemination of their technologies throughout the industry. The practice of that philosophy has contributed to the number of companies conducting research in the RNAi sector and has provided the patent holders with a source of research funds which can help to support internal drug development enterprises.

Such proactive thinking has rendered more individual, as well as cooperative, R&D activity and less legal action, thereby advancing RNAi technology during a period of disputation that usually hinders the development progress of one or more parties in the biotechnology or pharmaceutical markets. At this point in the litigation landscape, losing a patent dispute translates to summarily licensing a red-hot technology from which the defeated party may still wind up being the first to market a derivative drug and reap fame and fortune.

There are still hundreds of RNAi-related patents on file with the U.S. Patent and Trademark Office (USPTO), but the typical claim now involves simple ownership establishment, and does not entail ownership challenges. Since the RNAi market has had time to mature, new discoveries are more clearly able to be acknowledged and assigned to an inventor. Many of the earlier litigation cases stem from simultaneous pioneering research conducted by two or more parties in similar areas. The parties claim to have had no knowledge of the work being performed by the other, leading each research group to stake a claim for being the first to develop that particular technology.

Verdicts are being rendered in court, but they are not gravely penalizing companies to an extent that incapacitates their product development pursuits. Since the fourth quarter of 2004, two RNAi drug development companies have entered the clinic with therapeutic candidates and before the end of 2005, several more companies are expected to file for approval to enter programs into Phase I clinical trials in 2006.

Drug development activity accelerates in spite of IP issues

Acuity Pharmaceuticals Inc. made history in October 2004 when the company began Phase l trials for its lead candidate, Cand5 for the treatment of wet age-related macular degeneration (AMD), dosing the first human ever to receive a potential therapeutic drug based on RNAi technology.

In November 2004, Sirna Therapeutics Inc. entered the clinic with SIRNA-027, its own lead candidate for treatment of wet AMD. The two drugs seek to shut down the same disease, but aim for different targets to deliver the therapy. Sirna's drug targets Vascular Endothelial Growth Factor Receptor-1 (VEGFR-1), while Acuity's treatment targets Vascular Endothelial Growth Factor Receptor (VEGF). SIRNA-027 is chemically modified in an attempt to increase stability, while Cand5 relies on straight RNA injection in a more frequent delivery schedule.

Alnylam Pharmaceuticals Inc. is preparing to file an Investigational New Drug (IND) application with the Food and Drug Administration (FDA) for its ALN-RSV01 therapeutic development program, targeting Respiratory Syncytial Virus (RSV) for the treatment of RSV infection.

Other companies on the threshold of entering clinical trials include CytRx Corp., with RNAi-compound products in development for obesity and type 2 diabetes, and Nastech Pharmaceutical Co., in preclinical trials with programs for inflammatory diseases, cancer, metabolic diseases and infections.

The huge success of RNAi as a research tool and the entry of candidates into pipeline trials underscore the significance of keeping pace with competitors at a crucial time in which many companies with similar candidates are vying for position in the same space.

There has been a significant amount of litigation, primarily involving patent disputes, in the RNAi sector over the past five years. Many of the disputes were attributable to the fact that the technology was new and companies were forging ahead in areas for which there was not a palpable history to trace to establish ownership.

Benitec Ltd., an RNAi therapeutics company with a major proprietary stake in DNA-directed RNA interference (ddRNAi) technology, and small-interfering RNA (siRNA) applications, has been involved in three court decisions in 2005. The company emerged unscathed, getting favorable outcomes in each case; however, it does not appear any apprehension over the decisions prior to their resolution inhibited the ability or will of the company to make prominent moves to advance its position in the interim. Benitec made six licensing and R&D deals involving its technology in 2005, before the cases it was involved in were resolved.

The attitude of the litigants and outcomes of the cases are indicative of the trend in RNAi intellectual property issues. They don't impair research endeavors and they don't foster intense controversy.

In August 2005, Benitec and Promega Corp. announced the settlement of their contract dispute pending in the U.S. District Court of Delaware, Benitec Australia Ltd. v. Promega Corporation, et al. (Case No. 04-174-JJF). As part of the settlement, Promega will hold a worldwide nonexclusive license to make and sell research products derived from (ddRNAi) technology. Promega will also receive payment in the form of cash and continued royalties from certain sublicenses.

In joint statements released to the press announcing the settlement, executives from both companies sounded more like partners than contestants in emphasizing the importance of moving forward with the technology and gave no indication of emerging from a contentious fight in which the loser would be hampered enough to impair R&D efforts.

Sara Cunningham, CEO of Benitec stated, "We are happy that the issues between Benitec and Promega have finally been resolved and that all parties will be able to concentrate their efforts on business rather than litigation. We are particularly pleased that Promega will continue to develop and market ddRNAi-based products. Benitec will continue to license its intellectual property in all human fields, including the research and therapeutics fields, consistent with furthering its corporate goals and enhancing shareholder value."

Bill Linton, CEO of Promega stated, "What's most important is that this key RNAi technology will be available to life scientists without confusion over its use. We are pleased to resolve the dispute and move forward in our support of this emerging technology in life science research." The financial terms of the settlement are confidential, but it was stated that the settlement completely resolves all claims and counterclaims asserted by the parties, including those involving Ambion Inc. and the Commonwealth Scientific and Industrial Research Organization (CSIRO.

Earlier in 2005, Benitec's providential legal streak continued when its patent portfolio was additionally validated when the Australian Patent Office upheld Benitec's patent estate (Australian Patent No. 743316 and Australian Innovation Patent No. 2001100608) following reexamination proceedings rendered by the court, brought about by questions related to Benitec's ownership claims.

In October 2005, Benitec dismissed its suit against Nucleonics Inc., previously pending in the United States District Court for the District of Delaware. Benitec filed a motion to dismiss the suit in light of a recent Supreme Court decision in Merck KGAA v. Integra Lifesciences Inc., Ltd, in which the court changed the nature and scope of the "safe harbor" exemption for drug development. In March 2004, Benitec had sued Nucleonics for infringement of U.S. Patent No. 6,573,099.

This trend of a more amicable form of litigation and commitment to resolution that usually ends in partnership is unique and unusual in the biotechnology landscape, and puts a perspective on the direction of the RNAi industry. IP issues still rank as one of the major issues facing the market, but there is little evidence they will inhibit overall market growth or exclude committed players from participating in the market.

There are still many active lawsuits and the outcome of these suits will play a role in defining the RNAi sector, but the current trend of conciliatory negotiation is a positive indicator that encourages continued growth and has not intimidated investors. Venture capitalists continue to fund RNAi therapeutics companies, as well as businesses involved in the front-end reagent and research tool sector.

IP activity in the RNAi market is not all about litigation of existing patents that are causing ownership and infringement disagreements. Licensing and R&D agreements, often involving the same patents in active litigation, have increased steadily over the past year, creating a vibrant market with plenty of opportunity to buy into one of the various technologies using RNAi.

The race to get the first RNAi therapeutic into clinical trials was highly contested and offered valuable recognition and credibility for the winner. Acuity and Sirna were frontrunners in that race, in addition to competing in the same therapeutics application space for wet AMD. The natural rivalry was contentious, but still did not cause controversial language or action between the companies which could have impinged on their individual efforts to move forward with their R&D agendas.

In a 2004 interview with BioWorld, while the two companies were on the verge of entering the clinic with their RNAi candidates, Nassim Usman, Ph.D., then-COO and senior vice president of Sirna, responded to a question regarding whether he felt there was room for Sirna and Acuity to concurrently pursue similar AMD drug development programs. His reply was indicative of the theme of sharing over the tactic of threatening and excluding, as he implied the possibility of eventual licensing agreements between the two rivals.

"That's problematical in that it will depend on the efficacy that will be seen in humans before we will be able to say there is room for both drugs, although we feel strongly that if Acuity's drug does advance, we will have to come to some sort of licensing agreement. So, one way or the other, we expect to have a piece of that drug, if it does move forward," he said.

Patent pooling gains acceptance as a resolution model

Much of the legal cooperation and many of the expeditious arrangements which thrive in the RNAi market are attributable to the model of patent pooling, a form of dispute resolution which encourages compromise over confrontation.

Patent pooling has become a popular option in the RNAi space for solving scientific ownership and usage disputes without straining relationships or corporate coffers.

The philosophy behind patent pooling advocates the avoidance of time-consuming and financially draining delays. This is achieved through the implementation of conciliatory approaches that expediently settle litigation and feature an increased willingness to license technology.

Patent pooling is defined by the USPTO as the amalgamation of intellectual property rights for the purpose of direct cross-licensing between patentee and licensee or through mutual joint venture agreement involving multiple parties, set up specifically to administer the relative participants.

The USPTO firmly advocates the use of patent pools in biotechnology and has published guidelines for its practice in order to facilitate its acceptance as a preferred method of resolution. The agency commissioned publication of a white paper titled Patent Pools: A Solution to the Problem of Access in Biotechnology Patents?

The authors of the paper touted the advantages of patent pools and concluded that they are beneficial enough to justify their costs and allay apprehension over exclusionary outcomes. The paper listed the primary benefits obtained through execution of patent pools.

The first benefit is the elimination of problems caused by "blocking" patents or "stacking" licenses that can allow the owner to monopolize some of the industry's building blocks and possibly prevent others from marketing off-shoot products, thereby counteracting market expansion and secondary research.

The second benefit of patent pools is their capability to significantly decrease licensing transaction costs by eliminating legal action expenses.

The next patent pooling benefit is the diffusion of risks between parties, resulting in the probability of recouping some R&D costs through involvement in a patent pool royalty group-sharing pact.

The final benefit is an institutionalized exchange of research data not covered by patents. The spirit of cooperation would foster more accommodating relationships, in which participants would voluntarily share more information and lessen the opportunity for coincidental research.

Judging from the trend in settling RNAi-related litigation, companies are embracing the patent pool philosophy and regard the tactic as one of cooperation, rather than concession.

Patent pooling gives everyone involved a share of one of the most promising drug development technologies, thereby increasing the opportunity to put much-needed therapeutics on the market.

Patent pooling provides enforceable protection for the technology owners and a usually non-prohibitive cost for licensees. Such circumstances, by design, augment the systems of competitive innovation and end-user price control.

According to the USPTO paper, patent pooling results in more innovation through an increased number of sources, analogous research for more time-efficient corroboration of results, fewer patent bottlenecks, and a speedier product development process.

There is also an increasing amount of patent pooling activity with new patents, as smaller and newer companies holding exclusive rights to RNAi technologies acknowledge the benefits being reaped by the more established companies, such as Alnylam, Sirna and CytRx.

These upstart companies are adopting broad licensing philosophies and entering into agreements that require a minimal amount of work on their part, other than waiting for upfront payments or royalties to come in. If a licensee does bring a drug to market, the licensing company will still benefit from the validation of its technology and may additionally gain applicable knowledge for internal research from the success of a partner's discovery.

Attractive patent estates and aggressive licensing drive a knockout market

Companies possessing access to favored patents have defined the RNAi market over the past year through negotiation of small, moderate and mega-deals that have facilitated the transformation of RNAi technology from hype to contender. The willingness and determination of those companies to get that technology into the research programs and products of many relative influential and promising companies and institutions have provided the thrust to propel the RNAi sector from the level of potential to the echelon of profitability and credibility. That prevailing attitude has spurred corporate and sector growth, while producing reputable markets which have valuable portfolios, own research platforms validated by results and attract serious investor attention,

Alnylam is an example of the auspicious position many of the premier RNAi therapeutics companies have attained. The company holds exclusive rights to particular key issued patents and pending patent applications covering crucial facets of the configuration and function of siRNAs and their therapeutics development value.

Alnylam holds broad rights to more than 150 issued and pending patents covering synthetic chemistry used in the discovery, development and commercialization of RNAi therapeutics. The company also holds a granted patent in the European Union (EU) and pending patent applications on the use of specific siRNAs to silence precise targets and to treat particular diseases.

Alnylam's patent estate is likely to be prominently involved in the early rounds of any RNAi drug approvals, due to the company's aggressive internal pipeline programs, as well as its expansive licensing philosophy. Alnylam holds some of the industry's most venerable patents and has access to the pioneering RNAi work of scientists such as Craig Mello, Thomas Tuschl and Andrew Fire.

The first issued Kreutzer-Limmer European patent was granted to Alnylam in 2002 and specifically covers the use of small double-stranded RNAs (dsRNAs) as therapeutics.

The Tuschl II patent application, owned by the Max Planck Society, covers a key structural feature of siRNAs, namely the presence of overhangs at the 3'-end of each of the two strands and was the first and only patent application of the "Tuschl series" to include data on mammalian cell gene silencing. Alnylam has also obtained an exclusive license to claims in the Tuschl II patent application uniquely covering the use of siRNAs for therapeutic purposes.

Two issued patents, US Patent Nos. 5,898,031 and 6,107,094, owned by Isis Pharmaceuticals Inc. and licensed to Alnylam, cover degradation of target micro RNA mediated by chemically modified RNAi-like oligonucleotides.

Alnylam has exclusive or non-exclusive access to other fundamental RNAi patents and patent applications, including those known as "Fire and Mello" (licensed from the Carnegie Institute), "Glover" (licensed from Cancer Research Technology), "Tuschl I" (licensed from MIT, the Whitehead Institute and the Max Planck Society), "Kay" (licensed from Stanford University) and "Hannon" (licensed from Cold Spring Harbor Laboratories).

Alnylam has licensed more than 150 issued patents covering chemical modifications of RNAi therapeutics licensed from Isis. These patents cover an extensive range of chemical modifications to oligonucleotides including phosphorothioates, 2 -O-methyl, 2 -fluoro and conjugation modifications.

Alnylam has also licensed or filed patent applications covering more than 200 disease targets.

The company's 2005 partnership with Novartis AG and the Novartis Institute for BioMedical Research (NIBR) focuses on the joint discovery of new therapeutics using RNAi across multiple disease applications in Novartis' research portfolio.

Novartis' major move to participate in the RNAi field is a three-year deal in which it acquired almost 20 percent of Alnylam as part of the agreement, a stake that could be worth more than $700 million.

A multifaceted partnership with Merck & Co. Inc. to infuse some of the pharmaceutical giant's pipeline candidates with RNAi technologies has generated extensive R&D activity for Alnylam. The company is conducting preclinical research to discover and develop RNAi therapeutics targeting the treatment of ocular diseases caused by abnormal blood vessel growth. These diseases include diabetic retinopathy, diabetic macular edema and AMD. Additionally, Alnylam is enhancing RNAi technology to initiate discovery and development activities for up to 12 Merck RNAi therapeutic programs.

Alnylam has signed eight other agreements providing nonexclusive rights to its RNAi patents, including four deals in 2005 with MWG Biotech AG, Sigma-Aldrich Corp. and Eurogentec.

In September 2005, Sirna entered into its largest deal to-date, in combining its RNAi therapeutic work with the delivery methods and ocular drug know-how of Allergan Inc. The deal has a potential value of $250 million and Allergan has agreed to pay for all development and commercialization costs for Sirna's wet AMD drug, Sirna-027, which is expected to enter Phase II clinical trials in 2006.

Howard Robin, Sirna president and CEO, says the deal makes his company an even more formidable force in the RNAi market and that the cash infusion is destined to hasten its lead candidate's passage through the clinical trial process.

"We create what I think is a very powerful force," Robin said in a BioWorld interview. "The data so far have demonstrated that Sirna-027 is very effective in 100 percent of the patients with no side effects."

In January 2004, Sirna entered into an 18-month collaboration with Eli Lilly and Co. for joint research to employ Sirna's proprietary siRNAs against specific oncology targets provided by Lilly.

Robin has said he expects more major deals for his company, further indicating the growing interest of big pharma in the science of RNAi.

CytRx has liberally outlicensed the technology it accessed from a broad strategic alliance with the University of Massachusetts Medical School (UMMS) which has given the company unparalleled access to an exclusive RNAi technology and serves as a broad platform for a myriad of drug discovery applications. The company is using RNAi technology internally as a drug discovery tool and as an element in its therapeutic programs.

CytRx currently has at least 12 agreements in its portfolio and is in negotiations with undisclosed big pharma companies to further expand its R&D agenda.

Challenges facing the RNAi market

Identification of disease-triggering genes has become common in RNAi scientific research, and gene silencing has been successful in laboratory experiments. There is no problem producing the micro RNAs that silence genes, but the inability to find a way to get that material to the location where it can provide therapeutic remedy is primarily what is keeping RNAi drugs off prescription shelves.

The problem facing the RNAi market is delivery of therapeutic siRNA inside the human body to the sites where offending genes are initiating disease. Scientists are looking to discover a delivery process that conveys the therapeutic before it degrades.

Durability also is an obstacle that must be overcome in the clinic. Currently, RNAi treatments must be administered repeatedly in order to maintain an effective benefit in most cases in which efficacy is even possible. In an application such as wet AMD, repeated applications mean numerous injections into the eye, which is a painful and daunting prospect for the patient.

There has been progress made in various animal laboratory study disease applications, including viruses and cancer, and RNAi has shown potential in addressing macular degeneration and wet AMD in humans. The complete success of these, and other, applications is dependent on the ability of researchers to overcome the challenges of delivery, stability and durability.

Problems related to delivery, stability and durability are being addressed and research has been ameliorated by the HGP. Scientists can use data from that project to conduct advanced research and compare information from other species with current clinical work to determine distinguishing factors that make RNAi successful in animal and plant genes, but not in humans.

Companies such as Cytrx and Sirna are showing steady progress in durability and delivery issues. In 2006, companies have hopes for at least four new RNAi products to enter the clinic, and two products already in clinical trials are projected to move into Phase II studies.

RNAi therapeutics companies, acknowledging the leverage research tools can offer their R&D pursuits, have begun to ink agreements with major reagent companies, such as Invitrogen Corp., Ambion Inc. Promega and Dharmacon Inc. These reagent companies have expansive gene libraries and resources to address the myriad issues being encountered in research

The human immune system does not recognize siRNA as a foreign or invasive substance; therefore, its use is likely to result in less rejection, fewer side effects and fewer adverse drug reactions than conventional chemical-based medicines.

Reagents/research tools companies continue fight for market leadership

The companies that have been buoying the RNAi market while the therapeutics companies secured their footing and marched toward the clinic are not eager to relinquish their position just yet.

Companies such as Dharmacon, Promega, Ambion, Invitrogen, Qiagen Inc. and Cenix Bioscience GmbH are supplying the biotechnology and pharmaceutical industries with the RNAi components and research tools needed to support the increasing amount of research being incorporated into new and existing laboratory and clinical work.

These companies are undergoing tremendous growth resulting from allocation of their products for external projects as well as their involvement in contract research projects and internal experiments. These companies have numerous licensing and R&D agreements that will entitle them to a percentage of potentially high-selling RNAi-derived drugs once they are on the market.

The reagent companies that provide RNAi tools can claim a who's who list of big pharma and biotechnology powerhouse clients and partners, including Genentech Inc., Pfizer Inc., Wyeth Pharmaceuticals, Bayer Pharmaceuticals Corp., Millennium Pharmaceuticals Inc., GE Healthcare, Merck and Abbott Laboratories.

Reagent companies experienced vigorous sales of siRNAs and related RNAi tools throughout the market's hype era, when therapeutics companies and academic institutions were toiling to validate the technology and gain respect as a viable commercial market. During this period, reagent companies perpetually gained credibility for the industry by providing the elements that facilitated the progress of many projects which had long been stuck in neutral.

The success of the reagent/research tools market led to the expansion of siRNA tools into diverse applications that had been banking on largely ineffective technologies such as antisense and ribozymes. It is not a coincidence that the rise to prominence of RNAi tools coincides with the falling virtues of those comparative technologies. The ability of siRNAs and other RNAi mechanisms to immediately show results that were unattainable for antisense resulted in investor and researcher confidence, making RNAi the preferred choice of many projects.

The reagent market shows no sign of slowing down, as RNAi R&D activity is thriving and more companies are converting disease application programs to use RNAi in place of existing mechanisms. Some form of the technology is popping up in just about every disease application, the growing track record of success in facilitating and jumpstarting stalled research should continue to attract the interest of big pharma and biotech entities.

The rise of RNAi may hasten the end of comparative technologies

Continuing the trend that began in 2001 when siRNAs were first being used to provide target validation for gene function applications, RNAi is projected to maintain its pace to replace its primary competitors, antisense and ribozymes technologies, as the drug discovery mechanisms preferred by pharmaceutical and biotechnology companies in research work.

RNAi, antisense and ribozymes are each basically oligonucleotides which identify target mRNAs and disrupt the function of genes, but there are differences that impact their effectiveness.

RNAi reagents and tools burst upon the scene and immediately started to overcome many of the problems that had been encumbering antisense and ribozyme applications for years. Issues of delivery, stability, durability, toxicity and design were improved or resolved.

After more than quarter century of research, there is still only approximately 10 percent of identified antisense oligonucleotides that are effectively functional, while, in less than five years, RNAi has produced effective libraries which encompass entire genomes of mammalian and plant cell lines.

RNAi has exceeded the stability of antisense and ribozyme, enduring for as much as six generations in relative cell lines, allowing researchers the opportunity for sustained observation.

The minor achievements of antisense have been moderated by undesired risk, since any chance for significant efficacy will rely on extremely high and excessive dosages, which increase toxicity hazards. RNAi eliminated that concern in many applications even before the technology entered the clinic, since it is triggered at very low doses that decrease the likelihood of side effects.

Ribozymes are generally mechanisms that have low potency delivery, high dosage requirements and short duration terms. Those seemingly unconquerable issues are reflected in the fact that there are still no marketed ribozyme products.

RNAi is less likely to be rejected in in vivo applications than antisense or ribozymes because it operates as a natural cellular mechanism to manage protein production and gene function. That renders it more potent and less likely to produce adverse drug reaction situations than comparative ribozyme and antisense mechanisms combined.

The double-stranded RNA process augments stability more than the single-stranded antisense and ribozyme mechanisms. Upon delivery to its target, RNAi binds with many defensive proteins to create an RNA Induced Silencing Complex (RISC). That supplementary stability avoids the need for the type of chemical manipulation and synthetic additions that antisense and ribozyme rely on.

Many antisense and ribozyme therapeutics companies continue to incorporate RNAi into stalled pipeline candidates. Sirna is the prime example of a company that restructured its entire strategy and agenda in abandoning ribozyme drug development to become a major RNAi therapeutics company.

Large companies that are still committed, at least in word, to antisense technology are showing indications of reconsidering their resolve, as they use RNAi to rescue programs in danger of failing.

Long-time antisense and ribozyme companies such as Genta Inc. and Isis have not declared an abandonment of those technologies, but have heavily incorporated RNAi platforms into their research efforts.

In June 2005, Genta submitted a New Drug Application (NDA) for approval of Genasense, its lead anticancer compound. A month earlier, the company had raised industry speculation about the product's future in announcing the pullout of Aventis, its long-time partner in the development of the drug, after reporting mixed data on the trial. Additional analysis yielded more favorable results in the study's endpoint and FDA evaluation is ongoing, and Genta is anticipating approval soon. Prior to that, Genasense had also failed in advanced multiple myeloma indications in December 2004.

Genta has also instituted an internal RNAi platform for drug discovery against several anticancer drug targets and appears ready to at least consider the possibility that RNAi may be a move worth making in an attempt to jumpstart its pipeline fortunes.

Isis does have the only marketed antisense drug, Vivatrene for indications of cytomegalovirus (CMV) retinitis, but all its other candidates have been long-term pipeline residents with relatively little movement. Isis has had its deficiencies with antisense too. The latest coming in December 2004 when its candidate for Crohn's disease, Alicaforsen, failed in two Phase III trials.

The company's decision to open a branch in Singapore that will conduct mRNA research which includes RNAi as a trigger mechanism may indicate the future focus of the company as a shift away from its long-time antisense reliance.

Isis also announced in October 2004 that it had entered into a license and R&D agreement with RNAi entities Max Planck Society Garching Innovation GmbH and Alnylam to develop relative therapeutics and to exploit the pioneering work of Thomas Tuschl, Ph.D., who is credited with discovering the structure of mammalian RNAi and is a co-founder of Alnylam.

RNAi is on the road to becoming the most popular and effective mechanism for research for biomedical applications, and is projected to soon accompany, or replace, antisense and ribozyme technology in the programs of most relative companies.

Market drivers are pushing RNAi forecast in the same direction

Despite the immense hype RNAi received and the reservations many had regarding this market's ability to live up to the fanfare and promises, the technology has been on a roll from its inception.

A clear pattern of unbroken progress has been established enough to give this market credibility and value. There has not been one public setback that has critically impaired or even stalled the market, and although no drugs are on the market yet, novel therapeutic targets identified from several RNAi research tools have entered small-molecule screening, thus plainly contributing value to the early phases of drug discovery.

Over the course of a few years, RNAi has emerged as an acknowledged and essential component in the development of not only RNAi drugs, but in industry-wide applications. The number of disease targets made available by the Human Genome Project creates an unbounded field of opportunity, in which RNAi is the best-suited mechanism to operate.

BioWorld projects the worldwide RNAi market, valued at $634 million in 2006, to increase to $774 million in 2008, $1.071 billion in 2010 and $1.195 billion in 2014. This reflects methodical and relatively uninterrupted progress in the clinic, accounting for the billion-dollar designation by the end of the decade. The resolution of siRNA delivery issues would have wide-ranging effects and could concurrently unleash a number of RNAi and conventional clinical trial programs into fast-track drug approval status within the forecast period.

The value of the market for RNAi therapeutics and drug development, valued at $490 million in 2006, is forecasted to increase to $531 million in 2008, $793 million in 2010, $831 million in 2010 and $831 million in 2010.

Factors such as the ongoing research to map of the bacteria genome and the growing emergence of companies that specialize in reviving stalled pipelines with novel technologies could further strengthen this segment by opening up additional targets for RNAi and leading to drug development in additional applications, such as vaccines, antibiotics and anti-psychotic drugs.

The reagent/research tools market worth, $144 million in 2006, is projected to increase to $243 million in 2008, $281 million in 2010, $297 million in 2012 and $314 million in 2010.

The advancement of clinical trials that must utilize RNAi for target validation, the increasing recognition of siRNAs and related mechanisms as highly effectively gene knockout tools and the expanding demand for reagent companies to conduct contract research are the primary drivers for the reagent/research tool market.

While all the focus was centered on the hype and the therapeutics' sector's quest to reach the clinic, the market rolled along at a steady and prosperous pace. Through October 2004, that success was carried prominently out front by the wave of optimism created by the fanfare of publicity surrounding the novel technology. The fortune of the market was supported also in relatively quiet fashion by RNAi's target validation and knock-out abilities as a research tool.

The hype was backed by enough promising laboratory data based on the impressive work of the more popularly renowned pioneering scientists and researchers, including Mello, Tushl and Fire.

The ability of this market to maintain its course to-date and avoid the distraction of the surrounding hype is a testament to the validity of the research which brought the technology to the attention of the public. RNAi has not lived up to its ultimate promise yet, but nothing has disrupted its progressive movement toward delivering approved drugs. The technology has achieved most of its claims in the laboratory and is showing the ability to carry that success into the clinic. Resolution of R&D issues in the RNAi market is on a much faster schedule than that of the general biotechnology market, where problems typically take years to solve. That type of track record is likely to sustain investor attention from corporate and venture capital sources.

A cooperative attitude in litigation, the two-pronged power of reagents and therapeutics, the confidence of big pharma in the potential of the technology, the industry-wide systematic approach to solving the problems of delivery, stability and durability and the predominant forward-thinking of the RNAi companies are the drivers that will push this market to prominence and profitability.

The technology is already a success, due to its laboratory skills which have accomplished the task of facilitating many relative and non-related research programs. As therapeutics move closer to becoming more of a reality than wishful thinking, the market will attract more than enough attention to grow into one of biotechnology's foremost applications.