(FORTUNE Magazine) – 4

Long promised yet never delivered, genetic medicine has finally taken a giant step toward becoming real. In November scientists at Alnylam Pharmaceuticals in Cambridge, Mass., pioneered a process that let it cut cholesterol levels in mice. The process itself is the breakthrough: Alnylam found a way to slip a biotech drug intravenously past the body's defenses, a scientific first.

But let's back up. In recent years Alnylam and rivals like Acuity Pharmaceuticals of Philadelphia have been racing to target disease using a form of biotech known as RNA interference. RNAi, as it's called, is a way of jamming sinister genetic signals in diseased cells, such as those that initiate the proliferation of viruses. Discovered in 1990 by a botanist attempting to infuse petunias with a purple pigment gene, the technology works in animal and human cells too. Scientists now think RNAi will let them attack ailments from AIDS and cancer to heart disease and Parkinson's. "RNAi has the potential to become a powerful therapeutic modality," says biotech analyst Edward Tenthoff of Piper Jaffray. "The approach could address a broad range of disease including some that cannot be treated by traditional drug classes."

Sounds great in theory. But researchers have been stymied in attempts to deliver synthetic RNA to diseased cells--the immune system detects it and destroys it before it can work. That is where Alnylam comes in: Its intravenous treatment found its way to the target (in this case, cells in the liver and small intestine that help digest fat and sugar), triggering a cholesterol drop of as much as 50%.

RNAi could be just what the doctor ordered for the struggling drug industry (see "Biotech's Billion-Dollar Breakthrough" in the fortune.com archive), and Alnylam leads the field. Founded in 2002 by all-star geneticists including Nobel laureate Philip Sharp, the company holds a clear edge in the number of patents it owns and the wealth of collaborative development deals it has penned. Last May it raised $35 million in an IPO. Watch for the company to seek permission to conduct its first human trials soon. -- John Simons