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Genesis Research and Development Halts Operations Amid Cash Shortfall

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By Doug Macron

One-time RNAi drug developer Genesis Research and Development said this week that it has suspended its operations due to "lack of funding."

At the same time, work on single-stranded RNAi technology that Genesis had been conducting for its subsidiary Solirna Biosciences has also ceased, although it may restart if an existing investor provides additional financing, a company official told RNAi News.

"Genesis was undertaking the [ssRNAi] research for Solirna under contract," Genesis CEO Stephen Hall said. "Solirna had no employees and was just paying Genesis to do the research on a monthly basis."

With Genesis "closing its labs and terminating its staff … Solirna is also in suspension and not able to take its technology forward," he noted.

New Zealand-based Genesis first began working in RNAi in 2005 after failures developing antibody-based drugs (RNAi News 8/5/2005). After a false start in allergic disease, the company turned its attention to siRNA-based treatments for cancer, predicting it would advance its first program into the clinic by 2008.

The cancer programs also ran aground, and in early 2009 Genesis began focusing on a proprietary technology that uses single strands of RNA to trigger an RNAi effect (RNAi News 2/12/2009).

According to Genesis, the technology involves chemically modified, nucleobase-masked single-stranded oligos capable of forming "an active double-stranded molecule only when the masking groups are removed inside cells." In part because of their smaller size, ssRNAi agents are expected to be more easily deliverable than their double-stranded or hairpin counterparts.

Problems raising the capital needed to advance the ssRNAi technology prompted Genesis to spin it out into a new subsidiary, Solirna, which in theory would allow would-be partners and financers to invest in the technology independent of the company's other programs (RNAi News 6/18/2009).

Genesis eventually was able to secure funding commitments for Solirna of up to NZ$1 million ($700,000), primarily from Japanese biotech firm MediBic Group, which, while primarily a pharmacogenomics company, has invested at least twice in RNAi drug shop Intradigm through its investment banking arm MediBic Alliance (RNAi News 10/15/2009).

The MediBic investment was to come in two tranches, the first of which, worth NZ$200,000, was already paid. The second, worth NZ$350,000, would be provided upon the achievement of an in vitro proof-of-concept milestone for the ssRNAi technology.

According to Hall, "we felt we got very close to the milestone last December, but [MediBic] didn't feel so. We carried on and did some more work and reported more advanced [in vitro] data at the end of March. We're just waiting on their decision following the release of that data."

He said that the data show that the single strands do not anneal outside of the cell, but do so once inside and induce RNAi, using both RT-PCR and a growth assay.

"We're actually really excited and very pleased with the progress that has been made with the project," he noted. "We heard that … a number of the [MediBic] staff are excited about it also, but somehow they haven't gotten to a final decision."

Should MediBic provide the additional money, Genesis will not resume work on the ssRNAi technology, Hall said. Instead, the company is weighing the possibility of resuming operations around non-RNAi programs with an undisclosed group that has a preclinical drug program and funding to move it forward.

"They don't have any interest in the Solirna project or the other assets Genesis has, so the plan is to take those assets out of Genesis and into a separate subsidiary company, then pass ownership of that subsidiary to the current investors in Genesis," he explained.

Work on the ssRNAi technology will instead be undertaken by "other groups" willing to do it under contract or in exchange for sweat equity.

And if the MediBic investment does not come through, Hall said that there are parties interested in the technology that may either invest in Solirna themselves or "just provide services and put equity in that way."

Hall also said that it is possible that Genesis would simply sell off the ssRNAi technology, but he noted that there is significantly greater value to be realized from it once proof of concept has been established in vivo.

"There have been a lot of concepts [in the RNAi space] that haven't worked," he said. "The real proof … is in vivo data and … we have felt that at that point a lot of groups that have been watching us would be interested in stepping up."

That, however, "takes time and money that we have, unfortunately, run out of."

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