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9-Misc: RNAi Roundup

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                                  PART I
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TITLE:  RNAi Roundup: Cytrx's Strategy Takes Shape; Cyntellect Leaps in
SOURCE: genome.web, USA, by Marian Moser Jones
DATE:   Jul 18, 2003

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RNAi Roundup: Cytrx's Strategy Takes Shape; Cyntellect Leaps in 

NEW YORK, July 18 - When ailing biotech and drug delivery company Cytrx
acquired Global Genomics exactly a year ago, the company's CEO, Steven
Kriegsman, came with the deal.

As a result, the company got an injection of new executive energy and a
new direction: RNA interference-based therapeutics in several niche areas.

"I took over the company in July 2002 and totally cleaned up everything
by the end of the year," said Kriegsman, a business journalist-turned
venture capitalist-turned executive. "We restructured the company and
totally turned it around." Now, he said, the company is the number one
peforming biotech on the Nasdaq small cap exchange.

In the past six weeks, this apparent turnaround has become evident, as
Cytrx has closed on a $5.44 million private financing round; and its
scientific collaborator, Michael Czech at the University of Massachusetts
Medical School, has published a scientific paper detailing the
application of siRNA to silence genes in fat cells in order to discover
drug targets for obesity and type 2 diabetes.

Following the paper's publication in the June 24 issue of the Proceedings
of the National Academy of Sciences, the company announced that it was
using the techniques described in the paper for high-throughput screening
of hundreds of candidate drug targets for obesity and type 2 diabetes.
"We're the first RNAi company to be in mammalian cells for that
indication," Kriegsman said. "For that indication we believe we are the
world leader."

The obesity and diabetes work comes out of a collaboration the company
began in April with UMMS, which has been spearheaded by the head of
Cytrx's scientific advisory board, 1998 Nobel laureate in Medicine Louis

The collaboration includes exclusive licenses to patents for RNAi by
inventors Andy Fire and Craig Mello, and held by the university for use
in obesity and diabetes therapeutics, as well as for treatment of
amyotrophic lateral sclerosis. In return for the licenses, Cytrx granted
the university 1.6 million shares of its stock.

The agreement also includes sponsored research, in which Czech, a
professor and chair of molecular medicine at UMMS, is studying the
effects of RNAi on obesity and type 2 diabetes, and Zoushang Xu, an
associate professor of biochemistry at UMMS, is conducting research on
RNAi as a therapeutic for ALS.

Cytrx's strategy of identifying one key academic collaborator and several
defined therapeutic areas contrasts widely with that of other RNAi
therapeutics companies emerging on the market, such as Alnylam Holdings
and Sirna Therapeutics. Alnylam, of Cambridge, Mass., aims to use RNAi in
a broad range of therapeutic areas, and has sought a dominant position in
the IP space by licensing the array of patents and applications from its
scientific founders, Tom Tuschl, Phillip Zamore, Phillip Sharp, and David
Bartel; and then last week, by merging with Ribopharma, which has early
European patents on RNAi. Sirna has specialty programs in Hepatitis C
vaccine and macular degeneration, but is widening its therapeutic net to
develop RNA interference technology for "oncology, metabolic,
inflammatory, central nervous system, renal and infectious diseases."

Cytrx is also much less well-capitalized than these two companies: while
Alnylam has $43 million as the result of the merger with Ribopharma; and
Sirna recently raised $48 million in a PIPE; Cytrx had $1.3 million in
cash and cash equivalents at the end of March, before raising the
additional $5.44 million. (The company also received $15 million from NIH
for a phase 1 study of a non-RNAi HIV vaccine project.)

Given Cytrx's position as a relative 99-pound weakling compared to
Alnylam and Sirna, the strategy of focusing on just a couple of disease
niches may not just be a smart one: it may be the only viable one.

In the target validation technology area, another back-from-the dead
company is making headway with a new $183,000 SBIR grant for a novel
laser-based RNAi system.

Cyntellect, which is a subsidiary of moribund stem cell cancer treatment
company Oncosis, said Thursday it had received the SBIR grant to develop
its proprietary Laser-Enabled Analysis and Processing - or LEAP - platform.

The company's leap into the RNAi field is driven by the realization that
its laser technology, which was originally designed for removing cancer
cells from a patient and then reintroducing the purified cells, had
applications in the drug discovery research arena, according to Dana
Hosseini, the company's vice president of business development.

"We found that [the laser] didn't kill the cells, but transiently
'permeable-ized' the cell membrane, which allows things to get in."
Hosseini said. "We image the cell or cells we want to target with the
laser - they can be targeted on the fly - the laser hits those target
cells, [and] the membrane opens up for a matter of seconds, then closes

The LEAP system involves a CCD camera imaging system with mirrors that
steer the image in tandem with the cameras, and a laser that then works
with the imaging system.

Cyntellect believes this laser-driven method, which it terms
optoinjection, is better than other techniques for transfecting RNAi or
siRNA into cells because it more efficiently transfects cells than other
methods, kills fewer cells, and allows users to transfect one cell but
not the adjacent one with the RNA molecules, Hosseini said.

The 16-person company is planning to make the LEAP technology available
for technology access partners by the end of the summer, and estimates
that it will launch the system commercially in the fourth quarter of 2004.

                                  PART II
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TITLE:  Biotech Watch: Silencing genes new method of research
SOURCE: The Associated Press/The Seattle Timers, USA, by Paul Elias
DATE:   Jul 18, 2003

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Biotech Watch: Silencing genes new method of research

SAN FRANCISCO -- The biotechnology field is littered with the debris of
would-be miracle cures.

These days, the buzz is building around a technology called "RNA
interference," whose legions of fans insist this one is different and
could dramatically alter our understanding of molecular biology.

They may be right.

Even cynical veterans of biotechnology's failures find it hard to
overstate how rapidly the technology has been embraced. Scientists
researching everything from cancer to crops are using RNA interference to
silence genes, thereby creating drugs, gene-searching tools and even a
new way of decaffeinating coffee.

"It has totally changed my research," said Phillip Sharp, a Nobel
laureate in gene research at Massachusetts Institute of Technology and
co-founder of a company using the technology to develop drugs that would
treat cancer, hepatitis and other diseases.

Sharp began working with RNA interference four years ago, when few
scientists were interested in the field. Now, thousands of them aim to
capitalize on the role RNA plays in life, custom-designing small snippets
of double-stranded RNA to silence specific genes.

They're publishing papers, filing for patents and organizing scientific
conferences dedicated solely to the topic. Even skittish venture
capitalists are investing in the field.

RNA originally was viewed simply as a passive messenger that took DNA's
recipe from the cell's nucleus and delivered it to protein-building
machines called ribosomes.

But recent discoveries show that double-stranded RNA patrols the genome
with the job of silencing mutant genes. These RNA, armed with destructive
enzymes, mug the messenger RNA from bad genes before it can reach the

A similar kill-the-messenger method is used in "antisense" research,
which involves injecting synthetically created mirror images of the RNA
messenger that spreads an illness. The mirror image forms a double-helix
bond with the RNA, preventing it from delivering its message to the
body's protein-building machinery.

But antisense researchers have had trouble tricking human cells into
accepting the foreign genetic material. Scientists hope RNA interference,
which exploits a natural phenomenon, will prove easier to deliver.

Rapidly evolving research

RNA interference research is rapidly evolving, and the phenomenon remains
little understood. But what is known is that these double-stranded
snippets effectively silence targeted genes. And that makes the experts

"Most forms of life utilize this mechanism," said Dr. Peter Rowley of the
University of Rochester Medical Center.

Rowley uses RNA interference to stop production of telomerase, an enzyme
thought to keep cancer cells from dying. He presented his work last week
at the annual meeting of the American Association of Cancer Research in
Washington D.C.

RNA interference already is streamlining the time, energy and money gene
hunters spend slogging through the human genome attempting to determine
what each of our 35,000 genes actually does.

A gene's function can be determined by turning it off and seeing what
happens to the plant or animal.

"I've never seen anything like it," said Garret Hampton, head of cancer
research at the Genomics Institute of the Novartis Research Foundation in
San Diego. "The field has moved so incredibly fast because it's clearly
powerful and has applications."

Researchers can now study gene functions in roundworms over a matter of
days instead of weeks, feeding them bacteria designed to produce RNA that
silences specific genes. By contrast, it usually takes about six months
to engineer a mouse with a knockout gene; Sharp says "this technology
offers the possibility of doing that in weeks."

Hunt for 'magic bullet' drugs

But the big game hunt is for "magic bullet" drugs.

Drugmakers and researchers have long sought to create drugs that target
bad cells while leaving healthy ones alone, hoping to rely less on
dangerous, blunt treatments such as chemotherapy.

Now, investors are betting RNA interference will be a powerful tool in
customizing drugs.

In April, one struggling biotechnology company drew a cash infusion of
$48 million from venture capitalists as the company announced it was
shifting away from its previous research to focus on RNA interference.
The venture capitalists now own a majority of Boulder, Colo.-based Sirna

MIT's Sharp helped start Alnylam Pharmaceuticals in Cambridge, Mass.,
last year with $17 million in venture-capital investment. The company
merged this month with German competitor Ribopharma AG and received $24.6
million in new funding.

"If the technology can be made to work, there's a long list of diseases
it can be applied to," Sharp said. "Such a highly promising approach is
worth the investment."

Still, even Alnylam Chief Executive John Maraganore said much hard work
remains before the field proves worthy of all the excitement.

"Beyond the hype, people have to be cautious," Maraganore said. "There
are still hurdles to overcome."

How to deliver the custom-designed snippets of RNA into the body still is
a mystery. Researchers also must figure out a way to make sure the
inserted RNA attacks only its intended targets.

"There is always a fear that there will be unintended consequences," said
Gregory Hannon, an oft-cited RNA interference expert at Cold Springs
Harbor Laboratory who has published several major findings in prestigious
journals such as Science and Nature. "But even with a few off-target
effects, it is still going to be better than any drug currently
available. I believe this is revolutionary."


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