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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 Ignarro.


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 again."


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.




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