WASHINGTON (Reuters) - RNA interference, whose discovery brought Americans Andrew Fire and Craig Mello the Nobel Prize in Medicine on Monday, is one of the hottest new areas of biotechnology and has spawned its own mini-industry.

The two researchers discovered that certain types of RNA could silence genes -- turning them off and altering a cell's functions. RNA stands for ribonucleic acid -- the molecule that transmits the genetic information encoded in DNA.

Plants use the RNA interference mechanism to fight off viruses and the discovery is being exploited by labs and companies around the world to try to find cures for cancer, certain types of blindness, and even bird flu.

"It's a classic example of basic research which has turned out to uncover a biological mechanism which now has tremendous potential for ... really impacting human health," said Dr. Jeremy Berg, head of the U.S. National Institute of General Medical Sciences, which funded Fire and Mello's work.

Less than a decade after Mello and Fire made their discovery in 1997, trials using RNA interference, or RNAi, to treat people are already under way.

"It has led to clinical trials on age-related macular degeneration but also there are trials for diabetes and

HIV and influenza and most anything you can imagine where we know enough to know that overexpression of particular genes is important," Berg said in a telephone interview.

"Cancer, for example, is often caused by overactive genes, and quelling their activity could halt the disease," his institute said in a statement.

RNA interference can also stop HIV, polio, hepatitis C, and other viruses.

"It is also an incredibly powerful research tool," Berg added. Researchers can use it to turn off or turn down a gene and see what happens.

Every cell in the body carries the complete genetic code, written in DNA. These genes cannot all be firing full blast at the same time, so in each type of cell some genes are turned on, or expressing, and most of the others are off.

STOPPING TROUBLE AT THE SOURCE

"If you can think of a flood coming out of your kitchen sink to the kitchen floor, today's medicines simply act like a mop and mop up the water. With RNA interference we can shut off the faucet," John Maraganore, chief executive of Massachusetts-based Alnylam Pharmaceuticals Inc., said in a telephone interview.

Alnylam is working with Merck and Co., Medtronic Inc., Novartis, Biogen Idec and the U.S. government to develop RNAi to treat high cholesterol, respiratory syncytial virus, which can endanger infants, H5N1 avian influenza, the Ebola virus and some types of pain.

At least 23 different companies are focusing on RNA interference, either for therapy or research. Dublin, Ireland-based Research and Markets estimated the total value of the RNAi industry at $1 billion in 2004.

San Francisco-based Sirnais working with Allergan Inc. to test RNAi in people with age-related macular degeneration, a leading cause of blindness which is caused by a proliferation of blood vessels in the eye.

Sirna is working with GlaxoSmithKline to develop RNAi to fight respiratory diseases.

A German company called Cenix BioScience has teamed up with Merck to develop RNAi treatments and Maryland-based biotech company Intradigm, a small spinoff from Novartis, found a way to use RNAi to treat SARS in monkeys.

One problem faced by researchers is how to get the interfering RNA molecules into the body effectively, and different companies are taking different approaches.