We recently downgraded
Isis Pharmaceuticals
(
ISIS
) to Neutral from an Outperform recommendation. Isis Pharma is a
drug discovery and development company that focuses on the
development of products using ribonucleic acid (RNA)-based
technologies, such as antisense. The company discovers new drugs
and out-licenses them to partners for license fees, milestone
payments, and royalties.
Isis Pharma's lead pipeline candidate, Kynamro (mipomersen), is
being developed for the treatment of familial hypercholesterolemia
(FH). Isis Pharma has a collaboration agreement with Genzyme, a
subsidiary of
Sanofi-Aventis
(
SNY
) for Kynamro.
While the companies filed for EU approval of Kynamro in July,
the US filing is scheduled to take place later this month.
Acceptance of the US filing will trigger a $25 million milestone
payment from Sanofi, most likely in early 2012. Isis Pharma and
Sanofi are expecting to launch Kynamro in 2012.
We are also positive on Isis Pharma's deal with
GlaxoSmithKline
(
GSK
), under which the company's antisense drug discovery platform is
being used for the development of new treatments for rare and
serious diseases, including infectious and ocular diseases. In
addition to receiving an upfront payment of $35 million, Isis
Pharma also stands to receive milestone payments under the
agreement.
We believe these positive developments are already reflected in
the current stock price and have, therefore, moved back to a
Neutral recommendation
Moreover, we are concerned about Isis Pharma's dependence on
Kynamro for future growth. With all eyes focused on the successful
development and commercialization of this candidate, any
development or regulatory hurdle would be a major setback for the
company.
A delay in gaining approval would weigh heavily on the stock. In
fact, although Isis Pharma has consistently presented encouraging
results on Kynamro, concerns regarding the candidate's safety
profile remain with the company reporting elevations in liver
transaminases, which is a sign of possible liver damage. We remain
worried that concerns regarding the safety profile of the drug
could limit its commercial potential once it is launched.
GLAXOSMITHKLINE (
GSK
): Free Stock Analysis Report
ISIS PHARMACEUT (
ISIS
): Free Stock Analysis Report
SANOFI-AVENTIS (
SNY
): Free Stock Analysis Report
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