Last week, shares of ISIS Pharmaceuticals came off multi-year highs of $23/share to close to $18/share when the $2B market
cap company raised $170M in a public secondary offering. The poor reaction to the stock offering is in
stark contrast to other fund raisings in the industry lately and includes the impressive $170M
offering by Alnylam in January, a $125M offering by Sarepta in December, and most
recently the $36M offering by Arrowhead Research. In all these cases, the offerings hardly
registered on the stock chart and if, it was to the upside.
What happened? Given
that ISIS Pharmaceuticals is regarded as a bellwether of the industry, has the
frenzy surrounding RNA Therapeutics and orphan drug development died down?
I don’t believe so (and expect the stock to bounce back in
the coming days and weeks for the same reasons that it had tripled in the few months
before). The more likely explanation is
that the management of ISIS Pharmaceuticals has never understood the
money-making aspect of drug development and the sensitivities of the financial
markets.
The business strategy of seeking to out-license all its
drugs before commercialization (supposedly, the new money is to hold onto drug candidates longer), may betray nothing more than its lack of
confidence in the safety and efficacy of its own compounds. We will likely see evidence of the cleverness
behind this and the deal with Genzyme/Sanofi, when sales of recently approved
mipomersen, once heralded by the CEO as a replacement of statins, but now relegated to the
ultra-orphan homozygous FH population in the US only, will be made public.
And at one point, the low-hanging targets
will have been licensed and new technologies such as RNAi Therapeutics firmly replaced RNase H. At that point, the company could have repeated the strategic
mistake of PDL Biopharma in the monoclonal antibody space which has now degenerated into
an IP management and royalty company.
The fallacy of that business model is also supported by
the fact that cash flow break-even from licensing revenues alone was supposed to be just around the corner forever it seems.
Instead, we recently had a debt offering and this secondary.
I was recently asked on Twitter why I am always so negative
on ISIS Pharmaceuticals. In addition to
my fundamental bias towards RNAi as the far more compelling mechanism for gene
knockdown compared to brute-force RNaseH antisense with the phosphorothioate
backbone, it comes down to credibility.
I have no doubt that the scientists at ISIS Pharmaceuticals
are leading in many aspects of oligonucleotide chemistry, but it makes me
wonder whether vasculitis is really only a peculiarity of non-human primates,
gross morphological changes of proximal tubule cells really of no functional
significance, injection site reactions and flu-like symptoms just ‘nuisance’
side effects as Dr. Crook recently called them (even better is the 'vanity' comment in explaining why the homoFH teenagers discontinued on the trial), and low-level inflammation in
multiple tissues due to the persistent high concentrations of innate
immunostimulatory oligonucleotides really not predisposing to diseases such as
liver, lung, and kidney fibrosis.
But fortunately for the ISIS executives, the fact that their personal
financial management skills are better than their investor relations savvy will help them sleep despite of these concerns. According to Yahoo! Finance, Dr. Crooke and
his team cashed in several million dollars through option exercises and stock
sales in the month before the offering, and a few more since the beginning of
the year:
Apr 30, 2013
|
29,945
|
Direct
|
Automatic Sale at
$22.26 per share.
|
666,575
|
|
Apr 30, 2013
|
29,945
|
Direct
|
Option Exercise at
$6.81 - $11.12 per share.
|
N/A
|
|
Apr 29, 2013
|
30,000
|
Direct
|
Option Exercise at
$11.12 per share.
|
333,600
|
|
Apr 29, 2013
|
30,000
|
Direct
|
Automatic Sale at
$22.51 per share.
|
675,300
|
|
Apr 24, 2013
|
25,854
|
Direct
|
Option Exercise at
$6.81 - $11.12 per share.
|
N/A
|
|
Apr 24, 2013
|
25,854
|
Direct
|
Automatic Sale at
$22.50 per share.
|
581,715
|
|
Apr 23, 2013
|
30,000
|
Direct
|
Automatic Sale at
$22.12 per share.
|
663,600
|
|
Apr 23, 2013
|
10,417
|
Direct
|
Option Exercise at
$15.38 per share.
|
160,213
|
|
Apr 23, 2013
|
10,000
|
Indirect
|
Automatic Sale at
$22.12 per share.
|
221,200
|
|
Apr 23, 2013
|
10,417
|
Direct
|
Automatic Sale at
$22.38 per share.
|
233,132
|
|
Apr 23, 2013
|
30,000
|
Direct
|
Option Exercise at
$11.12 per share.
|
333,600
|
|
Apr 22, 2013
|
20,000
|
Indirect
|
Option Exercise at
$6.81 per share.
|
136,200
|
|
Apr 22, 2013
|
10,000
|
Direct
|
Option Exercise at
$11.12 per share.
|
111,200
|
|
Apr 22, 2013
|
27,320
|
Direct
|
Automatic Sale at
$22.13 per share.
|
604,591
|
|
Apr 22, 2013
|
27,320
|
Direct
|
Option Exercise at $8
- $15.38 per share.
|
N/A
|
|
Apr 22, 2013
|
10,000
|
Direct
|
Sale at $22.10 per
share.
|
221,000
|
|
Apr 22, 2013
|
20,000
|
Indirect
|
Sale at $22.10 per
share.
|
442,000
|
|
Apr 22, 2013
|
30,000
|
Indirect
|
Sale at $22.10 per
share.
|
663,000
|
|
Apr 21, 2013
|
20,000
|
Direct
|
Option Exercise at
$7.26 per share.
|
145,200
|
|
Apr 21, 2013
|
17,656
|
Direct
|
Automatic Sale at
$21.40 - $21.49 per share.
|
379,0002
|
|
Apr 21, 2013
|
10,000
|
Indirect
|
Automatic Sale at
$20.99 per share.
|
209,900
|
|
Apr 21, 2013
|
20,000
|
Direct
|
Automatic Sale at
$20.99 per share.
|
419,800
|
|
Apr 21, 2013
|
17,000
|
Direct
|
Option Exercise at
$11.12 per share.
|
189,040
|
|
Apr 21, 2013
|
17,000
|
Direct
|
Automatic Sale at
$21.26 per share.
|
361,420
|
|
Apr 21, 2013
|
30,000
|
Direct
|
Option Exercise at
$11.12 per share.
|
333,600
|
|
Apr 21, 2013
|
30,000
|
Direct
|
Automatic Sale at
$20.99 per share.
|
629,700
|
|
Apr 21, 2013
|
17,656
|
Direct
|
Option Exercise at $14.47
- $15.38 per share.
|
264,0002
|
|
Apr 18, 2013
|
2,042
|
Direct
|
Option Exercise at
$11.12 per share.
|
22,707
|
|
Apr 18, 2013
|
2,500
|
Direct
|
Automatic Sale at
$21.25 per share.
|
53,125
|
|
Apr 18, 2013
|
30,000
|
Direct
|
Option Exercise at
$7.26 per share.
|
217,800
|
|
Apr 18, 2013
|
30,000
|
Direct
|
Option Exercise at
$7.26 per share.
|
217,800
|
|
Apr 18, 2013
|
2,500
|
Direct
|
Option Exercise at
$11.12 per share.
|
27,800
|
|
Apr 18, 2013
|
30,000
|
Direct
|
Automatic Sale at
$20.01 per share.
|
600,300
|
|
Apr 18, 2013
|
2,042
|
Direct
|
Automatic Sale at
$20.80 per share.
|
42,473
|
|
Apr 18, 2013
|
30,000
|
Direct
|
Automatic Sale at
$20.01 per share.
|
600,300
|
|
Apr 18, 2013
|
15,000
|
Direct
|
Option Exercise at
$14.18 - $15.38 per share.
|
222,0002
|
|
Apr 18, 2013
|
15,000
|
Direct
|
Automatic Sale at
$19.60 - $21.01 per share.
|
305,0002
|
|
Apr 11, 2013
|
5,460
|
Direct
|
Automatic Sale at
$19.60 - $19.62 per share.
|
107,0002
|
|
Apr 11, 2013
|
5,460
|
Direct
|
Option Exercise at
$14.18 - $14.47 per share.
|
78,0002
|
|
Apr 10, 2013
|
7,000
|
Direct
|
Automatic Sale at
$19.52 per share.
|
136,640
|
|
Apr 10, 2013
|
7,000
|
Direct
|
Option Exercise at
$11.12 per share.
|
77,840
|
|
Mar 20, 2013
|
9,000
|
Direct
|
Option Exercise at
$14.18 per share.
|
127,620
|
|
Mar 20, 2013
|
1,000
|
Direct
|
Automatic Sale at
$19.50 per share.
|
19,500
|
|
Mar 20, 2013
|
1,000
|
Direct
|
Option Exercise at
$11.12 per share.
|
11,120
|
|
Mar 20, 2013
|
9,000
|
Direct
|
Automatic Sale at
$19.26 per share.
|
173,340
|
|
Mar 19, 2013
|
3,924
|
Indirect
|
Automatic Sale at $18
per share.
|
70,632
|
|
Mar 19, 2013
|
14,376
|
Direct
|
Option Exercise at
$11.12 per share.
|
159,861
|
|
Mar 19, 2013
|
3,924
|
Indirect
|
Option Exercise at
$5.93 - $16.32 per share.
|
N/A
|
|
Mar 19, 2013
|
14,376
|
Direct
|
Automatic Sale at
$18.13 per share.
|
260,636
|
|
Mar 19, 2013
|
31,597
|
Indirect
|
Automatic Sale at $18
per share.
|
568,746
|
|
Mar 19, 2013
|
31,597
|
Indirect
|
Option Exercise at
$5.93 - $16.32 per share.
|
N/A
|
|
Mar 18, 2013
|
11,179
|
Indirect
|
Automatic Sale at $18
per share.
|
201,222
|
|
Mar 18, 2013
|
11,179
|
Indirect
|
Option Exercise at
$5.93 per share.
|
66,291
|
|
Mar 12, 2013
|
20,800
|
Indirect
|
Automatic Sale at
$18.01 per share.
|
374,608
|
|
Mar 12, 2013
|
20,800
|
Indirect
|
Option Exercise at
$5.17 - $5.93 per share.
|
115,0002
|
|
Mar 4, 2013
|
18,240
|
Direct
|
Option Exercise at $6.81
per share.
|
124,214
|
|
Mar 4, 2013
|
18,240
|
Direct
|
Automatic Sale at
$16.86 per share.
|
307,526
|
|
Mar 4, 2013
|
5,040
|
Direct
|
Automatic Sale at
$16.86 per share.
|
84,974
|
|
Mar 4, 2013
|
5,040
|
Direct
|
Option Exercise at
$6.81 per share.
|
34,322
|
|
Mar 3, 2013
|
11,700
|
Direct
|
Option Exercise at
$11.12 - $11.27 per share.
|
131,0002
|
|
Mar 3, 2013
|
11,700
|
Direct
|
Automatic Sale at
$15.82 per share.
|
185,094
|
|
Feb 20, 2013
|
10,000
|
Direct
|
Option Exercise at
$5.17 per share.
|
51,700
|
|
Feb 18, 2013
|
1,600
|
Direct
|
Automatic Sale at
$14.80 per share.
|
23,680
|
|
Feb 18, 2013
|
1,600
|
Direct
|
Option Exercise at
$10.29 per share.
|
16,464
|
|
Feb 14, 2013
|
350
|
Direct
|
Automatic Sale at
$14.80 - $14.82 per share.
|
5,1832
|
|
Feb 14, 2013
|
350
|
Direct
|
Option Exercise at
$10.29 per share.
|
3,601
|
|
Feb 12, 2013
|
6,100
|
Direct
|
Option Exercise at
$7.25 - $8 per share.
|
47,0002
|
|
Feb 12, 2013
|
6,239
|
Direct
|
Automatic Sale at $14.17
per share.
|
88,406
|
|
Jan 29, 2013
|
2,000
|
Direct
|
Automatic Sale at
$14.82 per share.
|
29,640
|
|
Jan 29, 2013
|
2,000
|
Direct
|
Option Exercise at
$10.29 per share.
|
20,580
|
|
Jan 28, 2013
|
300
|
Direct
|
Automatic Sale at
$13.40 per share.
|
4,020
|
|
Jan 16, 2013
|
242
|
Direct
|
Sale at $14.16 per
share.
|
3,426
|
|
Jan 15, 2013
|
309
|
Direct
|
Sale at $14 per share.
|
4,326
|
|
Jan 15, 2013
|
330
|
Direct
|
Sale at $14 per share.
|
4,620
|
|
Jan 15, 2013
|
345
|
Direct
|
Sale at $14 per share.
|
4,830
|
|
Jan 15, 2013
|
143
|
Indirect
|
Sale at $14 per share.
|
2,002
|
|
Jan 15, 2013
|
759
|
Direct
|
Sale at $14 per share.
|
10,626
|
|
Jan 15, 2013
|
242
|
Direct
|
Sale at $14 per share.
|
3,388
|
|
Jan 15, 2013
|
1,317
|
Direct
|
Sale at $14 per share.
|
18,438
|
|
Jan 14, 2013
|
695
|
Direct
|
Option Exercise at $0
per share.
|
N/A
|
|
Jan 14, 2013
|
542
|
Direct
|
Option Exercise at $0
per share.
|
N/A
|
|
Jan 14, 2013
|
1,715
|
Direct
|
Option Exercise at $0
per share.
|
N/A
|
|
Jan 14, 2013
|
317
|
Indirect
|
Option Exercise at $0
per share.
|
N/A
|
|
Jan 14, 2013
|
776
|
Direct
|
Option Exercise at $0
per share.
|
N/A
|
|
Jan 14, 2013
|
737
|
Direct
|
Option Exercise at $0
per share.
|
N/A
|
|
Jan 14, 2013
|
542
|
Direct
|
Option Exercise at $0
per share.
|
N/A
|
|
Jan 14, 2013
|
2,978
|
Direct
|
Option Exercise at $0
per share.
|
N/A
|
|
Jan 3, 2013
|
1,296
|
Direct
|
Automatic Sale at
$10.76 per share.
|
13,944
|
|
Jan 2, 2013
|
265
|
Direct
|
Automatic Sale at
$10.84 per share.
|
2,872
|
|
Jan 2, 2013
|
311
|
Direct
|
Automatic Sale at
$10.84 per share.
|
3,371
|
|
Dec 31, 2012
|
447
|
Direct
|
Acquisition (Non Open
Market) at $8.87 per share.
|
3,964
|
|
Dec 31, 2012
|
431
|
Direct
|
Acquisition (Non Open
Market) at $8.87 per share.
|
3,822
|
|
Dec 31, 2012
|
2,328
|
Direct
|
Statement of Ownership
|
N/A
|
|
Dec 31, 2012
|
898
|
Direct
|
Acquisition (Non Open
Market) at $8.87 per share.
|
7,965
|
|
Dec 31, 2012
|
215
|
Direct
|
Acquisition (Non Open
Market) at $8.87 per share.
|
1,907
|
|
Dec 31, 2012
|
N/A
|
Direct
|
Statement of Ownership
|
N/A
|
|
Dec 12, 2012
|
6,000
|
Direct
|
Automatic Sale at
$9.63 per share.
|
57,780
|
|
Dec 12, 2012
|
6,000
|
Direct
|
Option Exercise at
$5.25 per share.
|
31,500
|
3 comments:
And yet, ISIS is back well above $20, now, while your pet stocks of TKMR and ARWR languish. Just curious - does self-doubt ever enter your mind, or are you that convinced you're that much smarter than everyone else?
If you had read my post carefully, I stated that I expected the stock to move back up on the back of the bullish biotech market.
Why do you keep saying that Stan Crooke claimed mipomersen (then called ISIS301012) would be a replacement for statins? Stan has never said that. I was an employee at Isis at the time that ISIS301012 first entered clinical development. In employee meetings Stan always said that the drug would never replace statins, but rather would be useful for patients who are unable to tolerate statins or cannot get to target levels of cholesterol. I was there at Isis before ISIS301012 and well into the mipomersen days after the Genezyme days. Stan was consistent all of that time in saying that it would never replace statins.
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