Merck Announces Purchase Of Sirna Therapeutics

On Monday, October 30 pharmaceutical giant Merck announced its plans to acquire Sirna Therapeutics for $1.1 billion. The purchase indicated Merck's interest in RNA interference, a technology which won a Nobel Prize earlier in the month.

RNA interference, known as RNAi, is a mechanism for inactivating specific genes. The hope is that one day the technique will be instrumental in killing viruses or healing tumors by literally turning off their genes.

Merck is still in the process of recovering from the effects of the withdrawal of the painkiller Vioxx from the market as well as setbacks in work with a number of experimental drugs. The Sirna acquisition is part of a move to diversify away from a strict reliance on pharmaceuticals and to move into other forms of medicine. In May, for instance, Merck paid $480 million for two companies in an effort to enter the field of protein drugs.

Sirna, based in San Francisco, has a staff of some 80 employees and currently has a drug to treat the eye disease macular degeneration that is entering the mid-stage of clinical trials. Other projects on which the company is working include therapies for Hepatitis C, Huntington's disease, and cancer as well as hair removal and drugs for respiratory diseases.

Sirna chief executive Howard W. Robin described the acquisition as "a clear validation for Sirna and it strengthens the likelihood that patients will one day benefit from RNAi therapeutics."

Investors appeared less than enthusiastic about the deal, however, as shares in Merck slipped 22 cents on Tuesday, October 31, closing at $45.42.