Isis Pharmaceuticals Inc.
) reported a net loss of 1 cent per share in the second quarter of
2012, well below the year-ago loss of 18 cents and the Zacks
Consensus loss Estimate of 7 cents. Revenues increased 90.7% to
$47.3 million, above the Zacks Consensus Estimate of $44 million.
Results were driven by a $25 million milestone payment received
) subsidiary, Genzyme, related to the acceptance of the new drug
application (NDA) for Kynamro (mipomersen).
Quarter in Detail
Revenues include license fees, milestone-related payments and
other payments. In addition to the $25 million milestone payment
from Genzyme, second quarter 2012 revenues included the
amortization of the $29 million upfront fee received from
) earlier this year. From the third quarter onwards, revenues will
include the amortization of a $12 million upfront payment under a
new collaboration agreement with Biogen, signed in June 2012.
Operating expenses increased 12.2% during the quarter to $43.6
million mainly due to the advancement of Isis Pharma's pipeline.
While research and development expenses increased 12.3% to $40.4
million, general and administrative expenses increased 11.7% to
With Isis Pharma completing its $125 million funding obligation
for Kynamro, Kynamro development expenses will be shared equally
with Genzyme from 2012 until the product becomes profitable. As a
result, Isis Pharma's share of Kynamro-related expenses are
Update on Kynamro
Isis Pharma and partner Genzyme filed for European approval of
Isis Pharma's lead pipeline candidate, Kynamro, in July 2011. The
companies are seeking approval for patients with homozygous
familial hypercholesterolemia (FH) and severe heterozygous FH. Isis
Pharma said that European review is progressing - the company
expects approval this year. The company's manufacturing facility
for Kynamro has been approved by the European Medicines Agency
The US application was submitted in March 2012. The companies
are seeking FDA approval for the use of Kynamro for the treatment
of patients with homozygous familial hypercholesterolemia (HoFH).
Kynamro will be reviewed by an FDA advisory panel on October 18. A
response from the FDA should be out by January 2013. Approval would
trigger another $25 million milestone payment from Genzyme.
Meanwhile, Isis Pharma and Genzyme are conducting a 12-month
study (FOCUS FH - saFety and atherOgeniC lipoprotein redUction of
mipomerSen in FH) with Kynamro. The study is being conducted to
support the expansion of the initial label and support an
alternative dosing regimen (three times a week). The study is being
conducted under the FDA's Special Protocol Assessment (SPA)
Neutral on Isis Pharma
We currently have a Neutral recommendation on Isis Pharma, which
carries a Zacks #3 Rank (short-term 'Hold' rating). We believe that
antisense technology (the main area of focus at Isis Pharma)
represents an exciting and potentially revolutionary platform for
developing therapeutic candidates to treat a wide margin of
diseases. We are also positive on Isis Pharma's agreements with
) and Biogen which not only validate its antisense technology but
also provide Isis Pharma with funds in the form of upfront,
milestone and other payments.
With Kynamro currently under regulatory review, we expect
investor focus to remain on the outcome of the FDA advisory panel
meeting. 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
believe this will be one of the issues that will be discussed by
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