The new gene therapy start-ups are learning to live with the technology’s limitations--and even to exploit them. While systemic treatments have generally failed, largely because doctors couldn’t deliver high-enough and frequent-enough doses to overcome the relatively low transfection rates and short-term expression, new companies are targeting localized diseases, in vascular medicine, wound care and certain neurological conditions, in which treatment doesn’t require long-term expression and where direct delivery of genes maximizes the effective dose.

Millennium's recent blockbuster deal with Monsanto isn't in healthcare--it's in agriculture. Now other drug-oriented biotechs are considering whether they too can leverage their discovery assets this way. Some firms believe their technologies are directly translatable; others say ag companies can't afford to pay for the methods. The big question: whether to do exclusive deals.