Gene therapy company Benitec (ASX:BLT) has weathered a head-on challenge from US rival, Nucleonics, to its key DNA-directed RNA-interference (ddRNAi) patents.

RNAi specialist Benitec (ASX:BLT) and Wisconsin-based Promega have settled their contract dispute which began last year.

A lacklustre third quarter for Australian biotechnology stocks resulted in an overall fall of almost 20 per cent for the year ending June 2005, according to the Intersuisse Biotechnology Index.

Californian biopharmaceutical company Calando Pharmaceuticals has granted an exclusive worldwide license to Benitec (ASX:BLT) for the use of its polymeric nucleic acid delivery technology, which Benitec will use in conjunction with its RNA interference (RNAi)-based therapeutic for hepatitis C virus (HCV).

A new report on ASX-listed life sciences companies by PricewaterhouseCoopers shows that the sector has posted its worst quarterly performance in three years.

With many biotechnology companies struggling to find investor support, the idea of banding together against the harsh elements -- merging or acquiring a like company -- is gaining currency. But there are many snares for the unwary, warns mergers and acquisitions specialist Nathan Drona.

Queensland Investment Corporation has ceased to be a substantial shareholder in Benitec (ASX:BLT), but millionaire Richard Pratt's Thorney Group has upped its holding in the company to 11.54 per cent.

Biotech companies which have failed to raise enough capital to see them through to the next funding cycle might expire as a funding drought sets in, and blame "shocking" market conditions for forcing them to abandon or change their plans.

Biotechnology stocks have been hit hard in calendar 2005 with the Intersuisse biotechnology index showing a fall of 23 per cent, including a 10 per cent fall in April.

"I have frequently said that RNA interference, as far as I'm concerned, is the most important discovery of the past decade," says MIT's Phillip Sharp. As co-founder of Biogen Idec and Alnylam Pharmaceuticals, and Nobel laureate for his discovery of gene splicing, Sharp knows of what he speaks.

Brisbane company Benitec (ASX:BLT) has signed a reciprocal licensing agreement with one of its biggest competitors in the RNAi field, US company Alnylam Pharmaceuticals.