Sirna Therapeutics (NASDAQ:RNAI) is one of several companies hoping to shut down diseases and disorders at the genetic level. Viruses and cells gone bad spread their malicious genetic instructions through messenger RNA (mRNA). But small bits of double-stranded RNA, known as small interfering RNA, or siRNA -- hence Sirna's name -- can "knock down" that translation, destroying the offending mRNA. In essence, siRNA can switch off unhealthy or damaging genes.

Sirna hopes to create drugs based on this process of RNA interference (RNAi). Though it's still a young technology, RNAi was dubbed 2002's breakthrough of the year by Science magazine, and it's already considered indispensable in many drug-discovery programs for the validation of promising drug targets.

So far, Sirna has advanced just one drug into clinical trials. Sirna-027 is directed at age-related macular degeneration (AMD), a leading cause of blindness among the elderly. It recently completed a successful phase 1 trial, and it's expected to progress to phase 2 later this year. Allergan (NYSE:AGN), a strategic partner in the development of this treatment, will run the phase 2 trial. Competitor AlnylamPharmaceuticals (Nasdaq: ALNY), which is also seeking RNAi-based treatments, recently halted a similar program directed at this indication.

Sirna Therapeutics' preclinical pipeline is robust. Sirna-034, directed at hepatitis C, should enter the clinic after the completion of its investigational new drug filing, expected later this year. Sirna-034 is a combination of two small interfering RNAs and a nanoparticle delivery vehicle. It proved effective at decreasing viral counts in infected primate models. Treatment of hepatitis C would require systemic delivery of Sirna-034 to humans, a traditionally large hurdle for siRNA and related antisense-based drugs. In addition to Sirna-034, the company has pre-clinical programs directed at treatments for Huntington's disease, hair removal, and diabetes.

The company also recently signed a collaboration agreement with GlaxoSmithKline (NYSE:GSK) to develop therapeutics for respiratory ailments. Partnerships with big pharma firms like GSK are often strong indications of a medical technology's potential. Rival Alnylam Pharmaceuticals can count Merck (NYSE:MRK) and Novartis (NYSE:NVS) as collaborators for RNAi-based drug development.

Sirna Therapeutics currently has more than $92 million in cash, with no debt. Its war chest was boosted by a $47.4 million follow-on offering in May 2006. Given management's projected annual burn rate of $30 million-$33 million, that should give the company adequate funds to demonstrate the effectiveness of a few more of its therapies in clinical trials. Signing additional partnerships and collaborations should bolster Sirna's development program as well.

While drugs based on RNA interference may have the potential to become the next big thing in biotechnology, they're still a long, long way from becoming FDA-approved, marketable entities. Still, Fools with an eye toward the future should keep tabs on RNAi research firms like Sirna, and the developments they discover.

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GlaxoSmithKline is a Motley Fool Income Investor selection; Merck was a former Income Investor pick.

Fool contributor Ralph Casale is constantly trying to keep all his genes from getting knocked down. He owns shares in GlaxoSmithKline, but holds no financial position in any other firm mentioned. The Fool has a disclosure policy.