Isis hooks another partner as big pharma looks for sense in antisense

Analysis

In signing its latest deal Isis Pharmaceuticals is not only adding to its already sizable cash reserves, it is also building on a strategy that has seen the antisense company spread the risk of developing drugs in what is still a relatively untested field.

As part of its latest $392m collaboration - to discover treatments for Huntington’s disease with Roche - Isis will be pocketing $30m up front, adding to the $975m the group has already amassed through up-front payments, licensing fees, equity investments and milestone and research funding since 2007.

Indeed, Isis's prolific deal-making means that all of its collaborations have the potential to earn it $5.1bn in future milestones, a sum it is highly unlikely to collect in full. Current partners include Sanofi, Glaxo, Pfizer, AstraZeneca and Teva, working in disease areas ranging from cancer to cardiovascular.

What this clearly shows is the continued interest big pharma has in antisense technology despite the fact that the space has promised much and delivered little. Isis is the only company that can currently boast approval of a systemic antisense drug.

Tighter purse strings

Lack of progress with the technology is one of the main reasons why more recent deals the group has struck are nowhere near as generous as the 2008 agreement Isis signed with Genzyme.

Back then Genzyme paid $175m up front for global rights to Kynamro, a homozygous familial cholesterolemia drug, and put a further $150m on the table for a stake in Isis. But Kynamro is highly unlikely to live up to the blockbuster status analysts had previously forecast (Isis needs to follow Kynamro with bigger and better pipeline wins, January 30, 2013).

In comparison, Monday’s $30m up front looks like a much more sensible deal. But even with the reduced up-front element it still should be borne in mind that the projects in question have yet to reach the lab, so Roche is retaining some appetite for risk when it comes to antisense.

As part of the slimmer deal Isis will be pairing its antisense oligonucleotide (ASO) know-how with Roche’s "brain shuttle" technology in the hope of getting more active drug into the brains of Huntington’s patients. Initial research will focus on Isis’s as yet unnamed preclinical candidate to treat all Huntington’s patients; further treatments could look at subsets of sufferers.

If Roche does decide to exercise its option to develop any of the projects from the tie-up it can do so at the end of phase I, leaving it to shoulder most of the development risk.

More needed

It is perhaps Isis’s ability to sign deals with big pharma and spread the risk of development that accounts for some of its $1.8bn market capitalisation. But the group does look overvalued considering it only has one marketed product, whose sales are expected to hit only $310m by 2018. And despite having another two projects in phase III and 15 in phase II analysts have only ascribed $32m to the whole pipeline, according to EvaluatePharma.

While Isis can be applauded for snaring another high-profile partner, the group will at some point have to deliver on the pipeline. It needs to deliver big if it is to maintain its very lofty-looking market cap.

To contact the writer of this story email Lisa Urquhart in London at lisau@epvantage.com or follow @LisaEPVantage on Twitter

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