Associate

CytRx Corp. is changing by taking up the torch of RNA interference technology through license agreements with the University of Massachusetts Medical School.

Although CytRx, of Los Angeles, has experience in gene therapy and gene-based vaccines through its TranzFect technology and in sickle cell disease through Flocor, Steven Kriegsman, CytRx CEO, said his company has "been studying the RNAi area since it started to be discovered and we know that [UMMS] had probably the broadest platform of RNA technology in the world."

RNAi as a platform has been hot lately, gaining favor among academics and companies alike, so much so that for CytRx it became something "we clearly saw we had to have," Kriegsman told BioWorld Today. "In our opinion, it supersedes antisense and we wanted to be a leader of that technology."

If leadership is the goal, UMMS seems to be a good place to start - RNAi technology was discovered in 1997 by UMMS faculty member Craig Mello in collaboration with Andrew Fire of the Carnegie Institute in Washington. The science is thought to be able to silence genes implicated in various diseases.

Similar to other biotechnology areas that came out hot - such as angiogenesis and antisense - RNAi technology has caught the attention of the sector. Intradigm Corp., Cell Therapeutics Inc. and OSI Pharmaceuticals Inc., to name a few, now all have some aspect of RNAi technology in their research. Sequitur Inc. and Bristol-Myers Squibb Co. in March extended a previous deal focused on antisense to include RNAi. But perhaps the most aggressive changes have been made at the company formerly called Ribozyme Pharmaceuticals Inc. - it changed its name to Sirna (for small interfering RNA), took on the Nasdaq symbol "RNAI" and got agreements in February for $48 million from investors. (See BioWorld Today, Feb. 13, 2003; March 4, 2003; and April 18, 2003.)

In CytRx's deal, it receives a "portfolio of applications for gene silencing technology" in the areas of Type II diabetes, obesity and cancer. CytRx is giving up 1.6 million shares for the agreement, establishing UMMS as the No. 2 stockholder in CytRx, behind Kriegsman himself. Based on Thursday's close of $1.32, the deal is valued at about $2.1 million.

CytRx's stock (NASDAQ:CYTR) rose 17 cents Monday, or 12.9 percent, to close at $1.49.

Although unwilling to divulge more on the intellectual property licensed, Kriegsman said he likes what he got.

"We licensed their technology for obesity, which is the biggest market in the world. That was critical," he said. "If we were going to get into RNA technology, we wanted to pick the absolute major markets worldwide. Since we have such an understanding in oncology, I wanted to be in that area. And that's a huge market that is growing dramatically - unfortunately."

With the wave of RNAi interest in biotechnology, it seems likely others would be seeking UMMS's intellectual property. The key to getting UMMS to license out to CytRx was in its board, Kriegsman said. Its members include Louis Ignarro, a Nobel laureate in medicine; Joseph Rubinfeld, co-founder of Amgen Inc. and SuperGen Inc.; and Max Link and Herbert McDade, both veterans in the life sciences.

"We have a very impressive board," he said.

Ignarro will lead the joint effort of the collaborators, both of which will put funds into the research. CytRx will work with UMMS's "most promising scientists," Kriegsman said, and the work will be done at the university.

CytRx's TranzFect technology is licensed to Merck & Co. Inc., of Whitehouse Station, N.J., for use in Merck's DNA-based vaccines for HIV and three other diseases. It is licensed to Vical Inc., of San Diego, for all other indications. Merck has the technology in a Phase I trial for HIV.

Flocor, an intravascular agent designed to improve blood flow by lowering blood viscosity and decreasing friction between blood cells and blood vessel walls, has been tested in more than 4,000 humans, Kriegsman said. In 1999, the product failed to meet its primary efficacy endpoint of decreasing the length of sickle cell anemia-associated vascular occlusive crisis in a Phase III trial. Kriegsman said the company would like to license it out.

"We'd rather work with partners," he said. "We like the fact that Merck is spending money, Vical is spending money."

As of Dec. 31, CytRx had about $1.8 million in cash and investments. For the year, it lost about $6.2 million, but Kriegsman said the company has cut its burn rate to about $125,000 a month. And from here on out, the company has a "new platform and a new direction," he said.

"RNAi will be a major focus of the company," he said. "We think it's a phenomenal platform and our scientists are confident that not only does it work, but it is going to be significant."