Sirna Therapeutics Inc. is looking to further its RNA interference drug development plans in concert with Eli Lilly and Co.

Just the second such relationship between a pharmaceutical company and a biotech firm in the RNAi space, the companies formed an 18-month partnership to develop cancer drugs through a joint investigation of Boulder, Colo.-based Sirna's modified small interfering RNAs against Lilly's targets.

"This shows that large pharmaceutical companies believe in the power of RNAi technologies," Sirna President and CEO Howard Robin told BioWorld Today. "For Sirna, this really validates our technology and intellectual property."

The deal includes an undisclosed up-front payment and additional payments as the collaboration progresses. More specific financial terms were not disclosed. Sirna's stock (NASDAQ:RNAI) gained 39 cents Tuesday to close at $5.65.

Formerly called Ribozyme Pharmaceuticals Inc., Sirna obtained access to the intellectual property behind its RNAi technology from the University of Massachusetts Medical School.

The deal does not mark big pharma's first foray into RNAi-based therapeutics. Last year, Cambridge, Mass.-based Alnylam Pharmaceuticals Inc. formed such a collaboration with Merck & Co. Inc. In that arrangement, Whitehouse Station, N.J.-based Merck is providing drug targets to privately held Alnylam, which is expected to develop compounds against them. (See BioWorld Today, Sept. 10, 2003.)

But Robin said Sirna's collaborative work would play out differently. Over the 18-month period of the collaboration, the parties aim to demonstrate animal efficacy relative to targets and models associated with them. At that point, the partners will have the option to carry the program forward. Should products arise, Indianapolis-based Lilly can opt to discuss a more involved licensing arrangement.

"I believe this will be a very interactive collaboration between the two companies," Robin said. "And Sirna is clearly the most advanced company in the development of siRNAs."

He pointed to the company's various animal model successes through systemic administration of siRNAs, demonstrating the knockdown of a tumor and hepatitis B virus. The company also said the therapy produced a positive impact in an animal model of macular degeneration, and Sirna plans to submit its first investigational new drug application later this year for the ocular indication.

Sirna remains free to talk with other potential partners relative to oncology applications of its technology, and Robin said the company likely would enter additional oncology partnerships, as well as in other areas.

"If you can identify proteins that are linked to specific cancers, this is perhaps an excellent way to prevent the expression of such proteins," he added. "I think siRNAs are actually well suited to treat a number of diseases, but it's clearly early on and a lot more work has to be done. But we have made some remarkable progress in the past year."