Monday, January 7, 2008

More Breaking News: ISIS and Genzyme in Heart Attack Biotech Deal

Dwarfing Tacere’s Pfizer collaboration announced earlier today, ISIS disclosed after the close of the markets Genzyme to be their long-expected partner for mipomersen, an antisense compound targeting ApoB100 for lowering bad cholesterol. Mipomersen is currently in phase III clinical development for the small, but high-risk group of people with familial hypercholesterolemia. Similar studies are planned to apply mipomersen for the statin-refractory general population. Pre-clinical data so far have shown the drug to be safe and surprisingly well tolerated.

The blockbuster deal, including a $175M upfront license payment plus $150M at a 103% premium to today’s closing price and more significant milestone and profit-sharing opportunities downstream, is another validation of how highly innovative RNA-targeting therapies are being valued. Genzyme appears to be the ideal partner for ISIS in that it has demonstrated an amazing ability to target relatively small patient populations for genetic disorders, such as familial hypercholesterolemia, yet be extraordinarily profitable. ISIS on the other hand is opting for an IP licensing model whereby it develops a series of antisense compounds to certain value inflection points to then partner them, in addition to receiving significant royalties on licensed IP from a wide range of RNA technology companies, including Alnylam. More antisense drugs for liver indications are in development, including a phase I HCV drug licensed by Merck [note corrigendum below].

Today’s announcement will focus the attention to the entire field of RNA-based therapeutics, including RNAi. The markets are likely to react very positively to the news, and Alnylam’s plans of two more significant platform licensing deals will sound a lot more real with this new development.

PS: It seems odd that today's announcement was preceded by a dramatic, over 15% drop in ISIS shares at the opening of the session. It is likely that "shorts" familiar with the matter pushed the stock down to create panic selling to create volume for covering their positions. Unfortunately, this may have achieved its purpose and some honest investors will have been stopped out by this action.

Corrigendum (15 January, 2008): A reader correctly noted that the Merck HCV drug mentioned in this blog is a nucleoside polymerase inhibitor, not an antisense compound which I assumed based on its origin in a Merck-ISIS collaboration. This, however, further illustrates ISIS' considerable leverage in nucleotide-based drug development.


Anonymous said...

Thanks for the updates again.

Yes, the ISIS trading was odd and I agree with your view that it was pushed down by someone in the know. I've emailed both ISIS and the SEC to suggest that they look into it.

Anonymous said...

The Merck HCV drug is not an antisense drug. It is a nucleoside analog.

Dirk said...

Thanks, for correcting me on my assumption. I was aware that ISIS and Merck were collaborating on an HCV treatment and incorrectly assumed it would be an antisense compound:

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