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In late August, agricultural products company Monsanto (NYSE:MON) in St. Louis agreed to license gene-silencing technology from the biotechnology company Alnylam Pharmaceuticals (NASDAQ:ALNY) in Cambridge, Massachusetts, a deal that highlights new strategic directions for both companies.

The deal gives Monsanto access for 10 years to Alnylam's platform technology and intellectual property for use in agricultural products. Alnylam gets $29.2 million from Monsanto immediately, and is eligible for milestone and research-support payments, as well as royalties down the road.

Alnylam's platform is built around ribonucleic acid interference or RNAi. Ribonucleic acid is a genetic substance similar to DNA, but is derived naturally and is structurally different from DNA. RNAi acts on the molecular signals sent from genes to specific proteins in cells. Without these signals, the cell functions matched to their corresponding proteins stop working. This process of cutting off genetic signaling to cells is called gene silencing.

The ability to stop cell activity in its tracks has obvious medical applications, particularly for treating cancer and viral infections, which up to now have been Alnylam's corporate focus. Alnylam's lead product is a treatment for respiratory syncytial virus (RSV), a disease affecting children, the elderly, and those with compromised immune systems. That treatment, now in phase 2 clinical trials -- small sample tests of effectiveness -- silences the virus's reproductive genes.

Another Alnylam candidate addresses TTR amyloidosis, a disorder caused by mutations in the transthyretin (TTR) gene, resulting in a build up of harmful proteins mainly in the liver, but also the peripheral nervous system, heart, and the gastrointestinal tract. That drug candidate is in phase 2 trials as well.

Alnylam's deal with Monsanto opens up an entirely new market for Alnylam, and probably one with less risk than biologic drug compounds. In May, for example, the company reported top-line results of the clinical trial for its RSV treatment (and lead product), which showed the drug achieving some, but not all of its objectives.

Silencing genes in agricultural pests

Monsanto is no stranger to genetic engineering in agriculture, but this deal marks a somewhat new direction for that company as well. In Alnylam's statement announcing the deal, Monsanto's chemical technology vice-president Tom Adams said his company would use Alnylam's technology to support Monsanto's BioDirect platform of biologics applied to agriculture.

BioDirect, according to Monsanto, aims to develop biologic-based alternatives to conventional pesticides and other weed, insect, and virus control treatments based on chemicals. The International Service for the Acquisition of Agri-biotech Applications identified a number of studies that indicate RNAi can control viruses and insects harmful to crops.

Monsanto's chief technologist Robb Fraley told the Goldman Sachs Basic Materials Conference in May that BioDirect is the company's first venture in biologics, but one with more potential benefits than meet the eye. "By working with a plant's own naturally-occurring processes, we have the potential to create products that are very precise and specific in how they work and may require smaller and fewer applications than current agricultural products," said Fraley.

While biologics in agriculture may have much potential for Alnylam and Monsanto, the technology is still relatively new, with many unknowns. Gene-silencing through RNAi may be conceptually simple, but the RNAi genetic pathway and molecular machineries are complex, and their impact on plant development and eventually human consumers are still being studied.

Source: Monsanto, Alnylam To Apply Genomics To Agricultural Pests