LONDON (Reuters) - Gene therapy may be about to become a commercial reality, 20 years after the first experiments with the ground-breaking medical technology.

But the tale of two biotech companies -- one British and one U.S. -- suggests a tricky road ahead.

On the one side, French authorities last week allowed an experimental gene medicine from Britain's Ark Therapeutics to be prescribed to certain patients with brain cancer, even though it is not approved for general use.

The news boosted hopes that the European Medicines Agency will clear Ark's drug Cerepro for sale across the European Union in the second half of 2009.

By contrast, U.S.-based Introgen Therapeutics -- which had been competing to get the first gene therapy approved in Western markets -- filed for bankruptcy in December, after a regulatory setback for its experimental cancer drug Advexin.

The last two decades have seen more than 1,470 clinical trials involving gene therapy, two-thirds of them aimed at cancer, according to the Journal of Gene Medicine.

But the only drug to get to market so far has been one for for head and neck cancer from Shenzhen SiBiono GeneTech, which was approved in China in 2003 on data that most analysts do not believe would have supported a Western green light.

Some of the other U.S. and European companies in the space include Genzyme, Targeted Genetics, GenVec, Neurologix, Amsterdam Molecular Therapeutics and Oxford BioMedica.

BUBBLE BOY DISEASE

The idea of using genes to treat disease gained credibility in 1990, when the world's first clinical tests showed early success against a rare condition caused by faulty genes, called severe combined immunodeficiency (SCID).

People with SCID -- also known as "bubble boy disease" -- cannot cope with infections and usually die in childhood.

The field then suffered a major setback when an Arizona teenager died in a gene therapy experiment in 1999 gene and two French boys with SCID developed leukaemia in 2002.

More recently, though, doctors have made encouraging advances.

Last year, two separate academic teams reported success in using gene therapy for a type of inherited blindness call Leber congenital amaurosis.

And last month an extended follow-up study of SCID children concluded that eight of 10 treated seemed to have been cured, leading the New England Journal of Medicine to declare that gene therapy was "fulfilling its promise".

"There have been setbacks but we are finally making progress," Thierry VandenDriessche, president of the European Society of Gene and Cell Therapy, told Reuters.

"The tools to deliver genes into cells have been perfected and have become safer and more efficient and we are starting to see the fruits of this in the clinic."

NEW BRANCH OF MEDICINE

Nigel Parker, chief executive of Ark, believes his company is ahead in what will become a major new branch of medicine. He plays down past setbacks as inevitable learning points for any new technology.

"If you think how long it takes for a new therapeutic idea to come to market, it does take about 20 years. So this is not too far away from the normal pharmaceutical cycle," he said.

Industry analysts are still divided as to how commercially successful Cerepro and other gene-based medicines will be.

"We're definitely closer but we are still not quite there yet," said Nomura Code analyst Samir Devani, who forecasts peak worldwide sales for Cerepro of $250 million a year.

Paul Cuddon of KBC is more sceptical about the drug's prospects, pending the release of full phase III trial data.

One of the big hurdles for gene therapy has always been how to get therapeutic genes to the right part of the body.

Normally, a virus is used as a carrier. But viruses can trigger serious immune reactions and damaging genetic mutations, if they integrate into the wrong part of the genome. They are also difficult to steer, making it hard to ensure that genes get to the right places in the body. One option is to adopt a more localised approach.

In the case of blindness, a common cold virus is used to deliver a corrective gene directly into the eyes of patients.

Cerepro, meanwhile, works via injections into the brain that transmit a gene for making a protein, which then reacts with an antiviral drug to produce a chemical that kills cancer cells. That makes Ark's drug a temporary and local treatment.

"If Cerepro gets approved fully for European use, I don't think that changes the risk profile for any other gene therapy because these products are so specific," said Piper Jaffray analyst Sam Fazeli.

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