MERCK TO BUY SMALL BIOTECH FIRM; SIRNA STOCK SKYROCKETS

Merck has announced plans to acquire Sirna Therapeutics for $1.1 billion, sending the biotech company's stock soaring by 96 percent.

Sirna specializes in a new class of medicines based on RNA interference (RNAi) technology. This is a way of selectively catalyzing the destruction of the RNA transcribed from an individual gene.

One area of great promise for RNAi is cancer research, Merck said. "We can potentially use this technology to target the activity of genes which control the activity of cancer cells, and so produce their destruction without damaging normal cells," Stephen Friend, executive vice president and head of oncology and neuroscience for Merck, said.

Merck hopes this merger will complement the research on RNA expression that the company has been doing since 2001, when it acquired Rosetta Inpharmatics.

Sirna's lead candidate, Sirna-027, is currently moving into Phase II development for the treatment of wet age-related macular degeneration. Sirna also has several programs covering a broad range of therapeutic areas, including infectious diseases, metabolism, CNS and dermatology.

Merck will purchase Sirna stock for $13 per share. Sirna stockholders have committed to support the transaction, which is expected to close in the first quarter of 2007. The merger is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.